The National Bank of Egypt (NBE), the country’s largest public lender, plans to extend its portfolio of financing local small and medium-sized enterprises to 30 billion Egyptian pounds ($3.8 billion) by the end of financial year 2016/17.
The bank targets a 30 percent growth in its SME financing portfolio through FY2016/17, a senior source in NBE familiar with the matter told Amwal Al Ghad on Monday.
NBE’s current SME portfolio is estimated at 23 billion, the source said.
Earlier this year, Egypt’s central bank called on banks to increase financing of SMEs nationwide. The central bank said it would require lenders to apportion 20 percent of their total loaning portfolio for SMEs, with interest rates below 5 percent imposed on firms generating between 1 and 20 million pounds a year in revenue.
The banks participating in the four-year programme will be able to deduct the loans from their required reserves at the central bank, according to the central bank statement.
The SME financing programme is part of an ambitious plan by President Abdel Fattah al-Sisi to assist smaller businesses.
During the first half of FY2015/16, NBE announced that its SME portfolio surged 16 percent to 19.2 billion pounds, including 2.7 billion pounds in form of loans to micro-sized projects.