Regional member banks gather at Visa International bank summit in Beirut

Held on 15-16 June and themed 'Moving into Credit', it was jointly hosted by two Visa International regions - the Middle East and North Africa. The forum provided banks and industry authorities with an informal opportunity to discuss ways of maximising credit opportunities and minimising risk.

Speaking at the meeting, Anne L. Cobb, President, Visa International CEMEA (Central Europe Middle East and Africa), said that credit presents banks with huge opportunities. 'At the moment, CEMEA is still a region where debit cards outnumber credit cards. However, credit is set to grow rapidly in this market. As a result it is important that we promote a better understanding of consumer debt and prepare for the challenges that accompany it,' she said.

Cobb identified ways of ensuring that credit is issued responsibly - thereby minimising the potential for unmanageable consumer debt. 'Credit bureaux are key to ensuring that credit is issued safely and responsibly,' she said. 'By ensuring that lending institutions have the right data about potential clients' creditworthiness we can help to ensure that credit is granted only to those who can afford it.'

Visa CEMEA has been at the forefront of regional moves to establish effective credit bureaux. Earlier this year, 120 senior Middle Eastern bankers, regulators and politicians heard how the world's leading payment company can facilitate their credit bureaux initiatives through technical support.

Kamran Siddiqi, General Manager Middle East, Visa International CEMEA, pointed out that credit can be a powerful tool for protecting the rights of the consumer and ensuring choice. 'The growth of electronic payments has resulted in a wide range of customised products. Electronic systems are able to provide a higher level of choice because the underlying system is capable of producing multiple offerings using the same operational capital,' he said.

Siddiqi spoke of the achievements already accomplished by the region's banks in terms of the range and the quality of credit products on offer. 'We have seen excellent innovation on the part of our regional banks in terms of bringing new products to market such as Islamic credit cards. We are also witnessing a range of innovative additional benefits to the cardholders such as purchase protection and travel insurance.'

Siddiqi attributed the 24 per cent increase in card issuance in North Africa and the Middle East as at the end of March 2004 to these initiatives, noting that retail sales volume (RSV) for both regions has risen by 40 per cent for the same period to a total of US$9 billion. 'Our success equates to the collective success of our members - we are only successful by association,' he said.

Tony Brogna, General Manager North Africa, Visa International CEMEA, noted that while credit cards in some of the region's countries are only a small proportion of all Visa cards issued, their importance to the banking industry is set to grow significantly. 'Regional banks all have a segment of consumers ready to be issued credit cards, and consumer demand for those cards is certainly there. Indeed, consumer loans are set to be a key driver for bank growth across these markets,' he said. 'Well-managed credit card programs are good for consumers and good for banks.'

Cobb pointed out that the value of card payments goes beyond card numbers and RSV. 'Our own research shows clearly that there is a direct link between electronic payments and national economies - there is a direct knock on effect to GDP.' She explained that electronic payments bring money into the banking system where it can be used for productive purposes and to stimulate growth.

'Getting cash out of the system also reduces the cost of cash management, allowing for greater transparency and helping governments to control grey economies. Cashless payments also ensure that fair taxes are paid, thereby raising money for socially and economically beneficial public activities,' Mrs Cobb said.

Sub-regional meetings are held annually and serve to provide an informal forum for competing banks to unite in a cooperative atmosphere and to discuss how best to expand their card business. The event is attended by Visa member banks, Visa representatives and industry experts on payment platforms.