Nasser Social Bank: Boosting profits or helping the poor?
Nasser Social Bank was meant to be a lifeline for Egypt’s poor. Today, as inflation bites and commercial lenders impose punishing interest rates, the state-backed institution still offers something rare: interest-free loans.
Founded in 1971 under Anwar Sadat, the bank is a holdover from the era of Gamal Abdel Nasser, his socialist predecessor. Though Sadat pivoted Egypt toward economic liberalization, the bank clung to its original mandate, providing microloans and welfare financing. Decades later, it stands as an anomaly—a state-backed redistributive tool in an economy that has otherwise embraced capitalism.
Yet its impact is narrower than its ambitions. Despite one-third of Egyptians living below the line poverty, the bank receives scant state funding to scale its operations. To stay afloat, it has leaned into commercial and investment activities.
While commercial loans, such as car financing, have boosted the bank’s profits, they also mark a departure from its core role of offering affordable credit to those in need.
How does the bank make a profit?
The latest financial reports from the Nasser Social Bank Authority, which oversees the institution, reveal steady growth in profits. Between the 2022 and 2024 fiscal years, profits rose by 400 million Egyptian pounds to reach 1.8 billion (about $35.3 million), with expectations of hitting 2.5 billion (around $49 million) this year.
Of the bank’s 50 billion pounds ($980 million) retail loan portfolio—which includes non-productive loans—about 40% is currently directed towards commercial activities (such as car loans), according to a senior bank official who spoke to Al Manassa on condition of anonymity.
The source explained that “the total retail portfolio is split between 20 billion pounds ($392 million) in commercial financing and 30 billion pounds ($588 million) in social lending.”
In addition to commercial loans, the bank has recently expanded into financial investments. In 2023, it launched the AZ-Nasser investment fund, which focuses on monetary instruments and offers a daily compounded return to investors.
“The bank holds an investment portfolio of 7.6 billion pounds ($149 million) in funds and government debt instruments,” the source said. “Part of this portfolio is managed by specialized asset management firms to ensure performance and balance between returns and risks.”
The bank also holds stakes in profitable companies such as Abu Qir Fertilizers and Sidi Kerir Petrochemicals, reflecting a broader investment approach.
However, banking expert Hany Abou El-Fotouh does not believe this commercial shift undermines the bank’s social role. “Nasser Bank is showing a growing interest in investment products like high-yield deposits and investment certificates. Still, it remains committed to its social function through cash and in-kind aid to poor families and support for small enterprises,” Abou El-Fotouh said.
Wither the social role?
“Pensions for widows of street vendors” was the bank’s first offering to the public when it launched in the 1970s, signaling its commitment to marginalized Egyptians who had no access to traditional banking.
That role continues today, according to the same bank source, who emphasized that “Nasser Bank is still fulfilling its founding mission by supporting the financially vulnerable. The bank’s commercial expansion doesn’t mean it has abandoned them.”
“Personal loans for pensioners and salary earners make up the largest share of retail lending,” the source told Al Manassa, noting that nearly 3.5 million people benefited from the bank’s social solidarity programs last fiscal year. These included subsidies and aid, interest-free loans, ownership of productive assets, and charitable distributions.
The bank also provides interest-free loans backed by pensions and supports micro-enterprise efforts such as the Mastoora Initiative, which offers zero-interest financing to Egyptian women.
Despite serving millions through its social solidarity programs, beneficiaries account for just 10% of Egypt’s poor, based on the latest poverty statistics from the Central Agency for Public Mobilization and Statistics/CAPMAS.
A need for greater support
Although the bank is a government-affiliated institution, the state budget includes no indication of any funding allocation. “Still, the bank does get financial assistance from the state earmarked for the most vulnerable groups, such as widows and divorced women,” according to the official. “It also occasionally allocates funds from its own resources to support poor families as part of its social responsibility.”
Another crucial revenue stream is charitable donations in the form of zakat, one of the founding principles of the bank. The official described it as “an extremely important source,” contributing 1.548 billion pounds ($30 million) in the 2023–2024 fiscal year.
But even these resources fall short. The bank faces difficult trade-offs between expanding its support for low-income Egyptians facing current economic stress and curtailing its role due to insufficient funding.
Soaring inflation presents a tough challenge since it reduces the real value of aid and expands the number of people in need. “Rising inflation has made it harder for the bank to deliver its services effectively,” the official said. “Living costs have surged, increasing the demand for both cash and in-kind support. Though the bank continues its programs, these efforts may no longer meet growing needs.”
The inflation rate may have dropped to 27.9% in 2024, down from 35.4% in 2023, but it remained well above 10% through the first four months of 2025.
According to the source, inflationary pressures over recent years have forced the bank to raise the value of aid it disburses from 65.4 million pounds ($1.3 million) during 2019–2021 to 232 million pounds ($4.5 million) by the end of 2023–2024.
Who oversees the bank?
Nasser Bank has tried to modernize its operations and expand into consumer lending. Still, its status remains discomforting to the Central Bank of Egypt/CBE, which may pose a future risk to its social mission.
A dispute has arisen over regulatory oversight. The CBE insists that Nasser Bank should be subject to standard banking regulations because it accepts deposits and issues loans. However, the senior official explained that “the Central Bank has repeatedly asked us to come under its jurisdiction. We even received a formal letter about this. But it’s difficult, since NSB receives government and zakat funds, which would violate the Central Bank’s laws and guidelines.”
In December 2020, former Vice President of the bank Mohamed Ashmawy announced plans to place the bank under CBE supervision by the 2021–2022 fiscal year. That would have included revising operational procedures, setting aside appropriate reserves, and raising capital. But the move never materialized.
The senior official insists the bank is “completely unfit for CBE regulation due to its social identity, which doesn’t align with the profit-oriented compliance rules in the banking law.”
Banking expert Hany Abou El-Fotouh agrees that NSB’s social character is distinct from commercial banks and is in conflict with some conventional banking provisions. Its mission prioritizes humanitarian and social goals over profit, and so should not be fully subject to the regulatory system around interest.