2.5 million SMEs in Egypt providing 75% of jobs: official

The number of small- and medium-sized enterprises (SMEs) in Egypt is approximately 2.5 million projects, representing 99 percent of non-agricultural private sector projects. Moreover, these projects provide about 75 percent of jobs, according to the executive manager of the Egyptian Banking Institute (EBI) Mona El-Baradei.

SMEs’ produce accounts for about 80 percent of the GDP and contributes to 75 percent of exports, El-Baradei said during the SME Banking and Finance Egypt 2016 conference that began on Monday.

Small businesses contribute to more than 10 percent of industrial production in Egypt, while medium enterprises provide 40 percent of it, she added.

According to El-Baradei, SMEs in Egypt face many challenges, most notably financing, along with the element of risk and weakness in their research capabilities, thus impeding their expansion.

She added that the EBI plays a major role in supporting this sector, by rehabilitating heads of the SME department at banks, as well as concerned staff. Moreover, the EBI also prepares studies on behalf of SMEs and trains their owners to improve their managerial and marketing skills.

The Egyptian economy is facing many challenges: the high unemployment rate of 13 percent, the declining growth rates of 4 percent, and the domestic investment rates that stand at only 14.4 percent of GDP, next to the limited flow of foreign currency to Egypt.

Ola El-Khawaga, EBI research and awareness director, said: “Collectively, this puts challenges before decision-makers in Egypt in search of a way to achieve growth. Therefore, we must attend to SMEs—they are the engine of growth.”

El-Khawaga added that banks should understand the difference between SMEs and big projects and deal with each accordingly. She called upon bank leaders to put an appropriate classification on these projects, expand their customer bases for them, and pay particular attention to Upper Egypt’s projects, which is a region deprived of banking services.

Source: Daily News Egypt