Egypt’s biggest lender, the state-owned National Bank of Egypt has signed a €50 million ($60.3 million) loan agreement with German KfW Development Bank to finance small and medium enterprises (SMEs) in the North African country.
The new agreement comes as part of the Egyptian bank’s strategy to diversify its funding sources including the SME projects, Amwal Al Ghad cited a source familiar with the matter as saying on Tuesday.
KfW Development Bank plans to finance a series of projects in the Egyptian market over the next five years by injecting more than €300 million, in several areas, including drinking water, sanitation, irrigation, solid waste, new and renewable energy, as well as the creation of jobs through vocational training and microfinance.
The Egyptian bank is in talks with several foreign financial institutions to sign agreements that may exceed $1 billion, the source added.
The bank is negotiating a $750 million loan from the European Investment Bank directed to small-sized enterprises and trade operations. The two parties are expected to sign the loan deal by the middle of the current year.
The National Bank of Egypt’s plan aims to increase the volume of SMEs portfolio, to register 42 billion Egyptian pounds by the end of June 2018 compared 40 million pounds including the direct and indirect funds, Vice chairperson of the National Bank of Egypt (NBE), Yehia Aboul Fotouh, said to Amwal Al Ghad.
He also noted that the bank has secured 15 billion Egyptian pounds to 15,000 clients within the small and medium sized enterprises initiative.