Back to the complete issue
Wednesday, 24 March 2021

Life is about to get easier for small businesses that want to go legit

SMART POLICY- Life is about to get easier for small businesses that want to go legit: The Central Bank of Egypt is pushing through procedures that will make it easier for micro-businesses and self-employed folks to open business accounts at the nation’s banks. The changes involve reducing the number and complexity of know your customer (KYC) documents banks have to ask for before they open an account, the CBE said today in a statement (pdf).

What do the guidelines say? The only hard requirements for unbanked micro-businesses, freelancers, and craftsmen are a national ID and a new account application declaring their venture’s line of work. In case the occupation stated on the business or venture owner’s ID doesn’t match the application, the bank would ask for supporting documents including syndicate membership cards, occupational licenses, tax or social security registration, or a letter from the Labour Bureau. Micro-enterprises lacking a commercial registration will also be allowed to submit property ownership or rental contracts for their base of operations, while freelancers and craftsmen would be asked to hand over utility payment receipts to document their place of residence.

State-owned National Bank of Egypt will start opening accounts under the new rules as early as next month, the bank’s head of products and financial inclusion, told Masrawy earlier this week. The bank will impose an EGP 100k monthly limit on accounts set up by self-employed individuals, and an EGP 200k ceiling on micro-enterprise accounts that provide formal documentation.

BACKGROUND: The move comes under new KYC regulations introduced by the CBE last October allowing small businesses and self-employed individuals to open bank accounts by declaring their occupation — a bid to encourage more individuals to join the formal economy, boost financial inclusion, and boost enterprise growth through access to credit.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.