The Micro, Small, and Medium Enterprise Development Authority (MSMEDA) and the National Bank of Egypt (NBE) signed on Tuesday a 400 million Egyptian pounds contract that will be used to lend new small-sized projects in all governorates.
The contract includes productive and commercial projects in all economic sectors, with a maximum of LE 5 million for projects working in the fields of industry, renewable energy, animal and fish resources and Agriculture processing, in addition to franchise projects.
Other fields could have financing up to 2 million pounds. Head of MSMEDA Nevine Game’ said in a statement that the contract aims at covering the financing needs of small projects and comes in light of the state’s policies towards supporting and developing small-sized projects.
She said that the authority has so far provided 24 billion pounds in financing to micro and small projects, which helped execute 2.8 million projects and create 4.37 million jobs.
It also provided logistical and technical support to these projects to help it grow and succeed, Game’ added.
Deptucy chairman of the NBE Yehia Abou el-Fotouh said that his bank’s small- and medium-sized enterprises (SMEs) loan portfolio stands at 40 billion pounds, serving 59,000 customers.
He added that the bank aims to increase this figure to LE 100 billion by 2020, with a focus on the agriculture and industry sectors.
Game’ said in January that the MSMEDA has pumped LE 4.8 billion to execute many projects in 2017, representing a 25 percent increase compared to 2016.
She said that the MSMEDA has financed 224,000 micro and small projects with some 4.5 billion pounds in 2017, providing around 305,000 jobs. This is in addition to 321 million poundsto finance community services and infrastructure projects, creating 33,000 job opportunities.
MSMEDA was established in April 2017, with the aim of supporting and financing SMEs.
Egypt has been prioritizing SME development to push economic growth.
In 2016, the Central Bank of Egypt (CBE) announced an initiative to finance SMEs.
Under the initiative, 20 per cent of bank loans should be allocated to SMEs within four years.
The banks are to offer around 200 billion pounds to finance 350,000 companies and thus create job opportunities for more than four million people.
Interest rates will be less than the five per cent on loans given to youth initiatives. The banks participating in the four-year program will be able to deduct the loans from their required reserves at the CBE.