The National Bank of Egypt (NBE) and Banque Misr have injected EGP 10bn worth of loans into small- and medium-sized enterprises (SMEs) in January, as part of the initiative posed by the Central Bank of Egypt (CBE) to finance SMEs with an interest rate of 5%.
Hazem Hegazy, NBE CEO for retail banking and SMEs, said that the bank provided loans worth EGP 7bn to 8,000 clients in different sectors in the first month of 2017.
Hegazy added that defaulting rates in SMEs remain below noticeable levels, especially as the clients of the sector are new to the banking sector, noting that it would take at least six months to assess their credit scores. He pointed out that the NBE takes all measures to ensure clients stay away from defaulting, particularly by offering them low interest rates.
The NBE grants approvals for SMEs financing through 72 specialised centres in Greater Cairo and Alexandria to ensure providing fast and high-quality service.
Hegazy said that the NBE aims to boost its SMEs financing portfolio to EGP 33bn by the end of the current fiscal year, up from EGP 28bn at the end of December 2016.
He added that by 2020, the portfolio is expected to hit EGP 72bn worth of loans to SMEs.
Meanwhile, Alaa Ayoub, chairperson of the SMEs department in Banque Misr, said that the bank’s SMEs portfolio in January increased by EGP 3bn to about 20,000 companies in different sectors.
He noted that more loans of about EGP 1bn are being studied and will be decided upon very soon.
The total size of the portfolio of SME loans at Banque Misr had registered EGP 2.4bn at the end of 2016, while the bank aims to boost it to EGP 7bn, according to Ayoub.
He agreed with Hegazy noting that defaulting clients are below 1% of the total size of loans, which is roughly EGP 4-5m.