The Central Bank of Egypt (CBE) plans to present a periodical report to the small- and medium-sized enterprises (SME) committee in parliament about the progress of President Abdel Fattah Al-Sisi’s SME financing initiative over the past three months.
The initiative aims to provide EGP 200bn for the youth demographic over a five-year period, at a sliding interest rate of 5% per year.
Hala Abu El-Saad, deputy of the SME committee, said they objected to the SME financing initiative as it does not include micro-projects. The major target of the initiative should be the youth demographic in poor areas especially as they cannot obtain EGP 20,000 or EGP 10,000 loans.
She added that the vice governor of the CBE, Gamal Negm, said during their meeting on Monday that the initiative does not include micro-projects, as it will support SMEs and large projects.
Loans of less than EGP 1m will be offered to projects that employ fewer than 10 individuals, with a capital of EGP 50,000, Abu El-Saad said. Loans of EGP 1m to less than EGP 10m will be offered to enterprises employing fewer than 200 people. The initiative will also offer loans of less than EGP 10m up to EGP 20m and others of EGP 20m up to EGP 100m.
Negm told the committee that the micro-projects are affiliated with the Egyptian Financial Supervisory Authority (EFSA), but the current initiative targets only SMEs, she said.
The committee asked Negm to provide the numbers of people who have benefited so far from this initiative and the total loans that were granted to the beneficiaries, so the parliament can assist them.
Abu El-Saad said that the meeting was not helpful enough as they did not obtain expected information about SMEs and lending rates as well as the number of beneficiaries.
Mohamed Saad Badrawi, deputy of the industrial committee, said that the announced volume of provided loans did not exceed EGP 1.3bn which is very low compared to the EGP 50bn annual loans allocated by Al-Sisi’s initiative, which amounts to EGP 200bn.
The provision of loans to support SMEs will boost the growth of the industrial sector and increase the dollar reserves in Egypt, he said. The figures announced in newspapers are different than the real numbers on the ground, as we are in the middle of the year and only EGP 1.3bn loans were provided, Saad Badrawi said.