The European Bank for Reconstruction and Development (EBRD) is providing AlexBank, a member of Italian bank Intesa Sanpaolo, a $100 million financing package to support the development of small businesses and trade activities in Egypt.
A $50 million credit line will be used for on-lending to local small and medium-sized enterprises (SMEs), which are the backbone of Egypt’s economy.
Although SMEs account for over 90 percent of all firms in Egypt and provide the majority of jobs, their access to finance remains limited, according to EBRD’s statement.
Addressing this issue is crucial for the growth of Egypt’s economy. It is also a joint priority for the EBRD and AlexBank, which can offer wider, qualified access to credit and banking support for this vital sector of the economy, the statement showed.
The EBRD has also extended a further $50 million to AlexBank under its Trade Facilitation Programme (TFP). AlexBank will benefit from trade facilities and guarantee issuance in favour of international counterparties to cover payment risks. In addition, the TFP line will be available to fund trade-related financing for local companies for pre-export, post-import of goods.
A technical assistance package amounting to €550,000 will support AlexBank in enhancing the skillsets and competitiveness of Egyptian enterprises by providing them with dedicated training, workshops, as well as forums. Technical assistance will also focus on improving existing processes, products, customer experience and technical expertise at AlexBank.
“We are pleased to partner with AlexBank to strengthen small businesses and trade in Egypt. Developing SMEs is key for the country as the sector provides much-needed job opportunities and is a crucial driver of Egypt’s overall economic growth.” Hildegard Gacek, EBRD Managing Director for the Southern and Eastern Mediterranean, said.
Dante Campioni, managing director and chief executive of AlexBank added: “The enhanced cooperation between AlexBank and the EBRD will support our strong objective to sustain the development of Egyptian SMEs, providing them with the financial resources to expand their operations and access training initiatives aimed at helping them to improve their overall operations. In this way, they will strengthen their productivity and gain opportunities to access international markets.”
The EBRD has invested close to €2 billion in Egypt through 36 projects since the start of its activities in the country at the end of 2012, the statement further showed.
The EBRD’s areas of investment there include the financial sector, agribusiness, manufacturing, and services, as well as infrastructure projects such as power, municipal water, and wastewater services and contributions to the upgrade of transport services.