Al Baraka Bank & SFD to Finance Small Enterprises

In a bid to enhance small enterprises, the Social Fund for Development (SFD) and Al Baraka Bank Egypt have signed a LE200 million deal to finance small enterprises. The financing deal is based on the Islamic Musharaka principle.

Ghada Wali, SFD secretary-general, speaking at a press conference said that the agreement aims at diversifying the fund’s services to include Sharia-compliant products to finance small projects which in turn would help create jobs and boost development.

Ashraf El-Ghamrawi, managing director of Al-Baraka Bank, expects the agreement to help in financing 4,400 new projects. Speaking also during the press conference, he pointed out that there is an increasing demand on Sharia-compliant products because “it is different and less complicated than the conventional ones.”

El-Ghamrawi further stated that his bank has spent LE1.2 billion in financing small enterprises until June 2012, adding that the figure would reach LE1.5 billion by the end of 2012.

Wali stated that the agreement came in light of the state’s strategy to support small enterprises. She added that during the past year and a half the SFD has signed LE3.3 billion contracts with small enterprises.

The SFD is also set to receive a $200 million loan from the World Bank which the latter has allocated for Egypt’s small and medium enterprises.

Al Ahram Weekly