Treasury & FX in Egypt
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For some of the peers, sourcing USD and getting cash out of Egypt has been a challenge revolving around access to dollar allocations. One peer was able to employ a combination of intercompany loans and dividends
- The cost of borrowing in Egypt is exceptionally high (9- 10%)
- One peer has increased dollar borrowing to offset USD exposure
- Employees in Egypt are entitled to receive 10% of any local dividends issued which is on top of any employee benefit plans in place. One solution was to offer new employees the option of choosing the dividend or another employee benefit plan. Legal advice was divided on the legitimacy of the company’s actions
- Cash and to a lesser extent, cheque payments still play a large role in the Egyptian market. Efforts to reduce cash and cheques are stymied by the market culture
- The use of purchase cards for local expense payments is not widely accepted
- Mobile money solutions have an individual transaction cap that is smaller than the average transaction
- There is a distinct disparity between global and local banks regarding connectivity, controls, and platform capabilities
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