NBE Injected EGP 70 Mln Islamic Finances To SMEs By End Of June 2012

The National Bank of Egypt (NBE) offered a number of sharia-compliant finances worth EGP 70 million to small and medium enterprises (SMEs) out of EGP 3.3 billion, the total value of finances offered by the bank to SMEs by the end of the last fiscal year.

The total value of sharia-compliant deposits at the bank reached EGP one billion and loan-to-deposit ratio rose to 40% at the end of FY 2011/2012, up from 20% at the end of FY 2010/2011, sources said.

NBE has a strategic plan to expand in Islamic banking in the upcoming period as it targets to increase the loan-to-deposits ratio to 80% by the end of the current year, as there is increasing demand on such banking services in the current period. However, the bank does not target to increase its deposits.

The bank studies offering medium-term murabaha finance worth EGP 200 million with a loan-term of 3 to 5 years to a poultry production company to finance the purchasing of raw materials, machines and equipments, sources added.

The bank has two Islamic branches; one in Dokki which acquires 80% of Islamic deposits and another in Azhar which acquires 20% of the Islamic deposits.

It is worth mentioning that NBE signed the first sharia-compliant finance contract worth EGP 150 million with the Social Fund for Development to finance SMEs.