Most Egyptian firms are financially excluded in Egypt, one of the largest unbanked economy where 94% of financial transactions are done in cash and only 35% of 82 million Egyptians have a bank account.

But the more CEOs are educated and experienced, the more likely it is that their firm is going to be financially included, according to a new STAREBEI research carried out by Farshad Ravasan (Paris School of Economics) and two EIB economists. The General Authority for Investment, a one-stop-shop programme put in place by the Egyptian government is also positively associated with financial inclusion.

Operating on a semi-formal basis allows unbanked firms to escape taxes and regulations but deprives them of the benefits from access to the judiciary and financial system. Informal firms also tend to be small and unproductive. Firms are generally informal in countries where the intermediation capacity of the banking system is low and opportunity costs in the form of lost growth is low.

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STAREBEI (STAges de REcherche BEI-EIB research internships) is a programme that provides grants to universities in order to finance junior researchers carrying out research projects proposed by the EIB Group (EIB and EIF) under the joint supervision of a university tutor and an EIB co-tutor.

To date, 43 young researchers from 33 universities in 12 European countries have benefited from the STAREBEI programme.