Egypt’s third biggest bank, state-owned Banque du Caire said Thursday its portfolio of micro, small, and medium-sized business financing has reached 2.6 billion Egyptian pounds ($143.6 million) by the end of October.
The bank expects a 22 percent rise in its MSME financing portfolio by the end of the current year, it added in a statement.
Banque du Caire has attributed the increase to the application of the central bank’s initiative to support the MSME industry in the country.
Earlier, Egyptian President Abdel Fattah al-Sisi announced the SME initiative in January as he said that Egypt’s banks would inject 200 billion Egyptian pounds into supporting businesses over the next four years, in a move to try and create jobs and support its battered economy.
The central bank issued then the guidelines on how it will incentivise banks to participate in a “comprehensive programme” to help finance small- and medium-sized enterprises. It required banks to allocate 20 percent of their total loaning portfolio for SMEs, with interest rates of up to 5 percent imposed on firms generating between 1 million and 20 million pounds a year in revenue.
In February, the central bank announced the allocation of 5 billion pounds for the banks to loan to medium sized enterprises in the industrial and agricultural sectors. The loans will be given to performing clients at a 7 percent reduced interest rate over periods of up to 10 years to finance new machinery, equipment, and production lines.