The Arab Investment Bank (AIB) aims to increase the value of loans granted to small- and medium-sized enterprises (SME) to EGP 7bn within four years, according to chairperson of the bank Hani Seif El-Nasr.
Seif El-Nasr told Daily News Egypt that the bank’s SMEs loans portfolio currently stands at EGP 1.5bn, which is 30% of the bank’s total credit portfolio. It plans to increase this by 20% over the next two years.
AIB is focusing on expanding in the SMEs sector and granting it the largest part of its total loans portfolio, Seif El-Nasr added.
To reach this goal, the bank established an independent sector specialised in SMEs in 2012. “This enables the bank to absorb all problems facing these types of projects and facilitate their access to funding,” he said.
According to Seif El Nasr, AIB put together several specialised schemes that fit with all SME client segments. The programme is called Partners and aims to provide easy funding for different SMEs sectors including medical care, drugstores, IT, activity processing, inventory and working capital, and transportation.
The bank injected EGP 600m in funding to the sector in 2015, the chairperson said.
AIB is keen to align with the Central Bank of Egypt’s (CBE) initiative to support SMEs by increasing the size of loans granted to the sector to reach up to 20% of each bank’s total loans portfolio. The initiative aims to support the national economy, raise the GDP, erode unemployment, and create job opportunities for the youth demographic, and merge the informal economy into the formal one.
In pursuit of the CBE’s initiative, the bank has reshuffled its credit facilities plan and penned an ambitious strategy aimed at expanding strongly in SME financing. Moreover, the bank has also prepared the banking infrastructure and amended its Partners programme according to the CBE’s set interest rates to ease the burden off these projects.
The Partners programme is a collection of specialised financing schemes that match the needs of existing and new activities at a low interest rate of 5% for small and micro companies, and 7% for medium companies, with a grace period of up to seven years and easy terms and conditions that fit all segments.
In a different context, Seif El-Nasr said that AIB has been financing development and national projects, including the New Administrative Capital and New El-Alamein. In addition, AIB has shown interest in financing other upcoming government projects in the coming period, whether through direct financing or arranging syndicated loans.
In the framework of the bank’s interest in participating effectively in the field of social responsibility, the AIB’s Board of Directors has approved the establishment of the Arab Investment Bank Foundation for Community Development to contribute to the support and development of society.
According to Seif El-Nasr, the foundation is a non-profit organisation that will collect donations from inside the bank, as well as external donors, to contribute to supporting and developing society in various fields, and achieving social solidarity and sustainable development.