Minister of Trade and Industry Tarek Kabil and Ashraf El-Sharkawy, chairperson of Misr Iran Development Bank (MIDB), witnessed the signing of a protocol of cooperation with the Small and Medium Enterprises Development Agency (SMEDA) for the bank to provide funding to micro, small, and medium enterprises (MSMEs).
The agreement was signed by Nevine Gamea, CEO of the SMEDA, and Amr Tantawy, MIDB’s managing director.
For his part, Kabil stressed the keenness of his ministry to strengthen cooperation frameworks with all funding agencies operating in Egypt in order to provide the necessary financing for the development of the SME sector as one of the main axes of the ministry’s strategy to promote industrial development and foreign trade through 2020.
He pointed out that the protocol comes within the framework of initiatives adopted by the state to support and develop the SME sector, including the Central Bank of Egypt (CBE)’s initiative, which unlocked EGP 200bn in financing, with 5% interest, for small projects.
Kabil explained that the agreement reflects the permanent cooperation between the ministry, the banking system, and financing bodies in Egypt, which contributes to diversifying the financial services provided to the SMEDA’s customers. They will be redirected to the bank’s branches to be financed in accordance with its funding packages and regulations.
He added that this service is one of the new services provided by the SMEDA to its SME customers, as well as to intermediary partners such as MIDB.
According to Kabil, the agreement, which is for one year, aims to finance various industrial fields, service areas, and commercial activities in the central Delta region, Upper Egypt, new industrial cities, the Suez Canal Economic Zone (SCZone), and free zones, adding that the minimum funding is EGP 500,000 and us capped at EGP 10m.
For his part, El-Sharkawy, MIDB chairperson, said that the protocol is a new form of cooperation between his bank and the SMEDA to serve the small and medium enterprise sector. He noted that the bank has already dealt with the SMEDA before through a contract to develop small projects in 2012 worth EGP 4.5m.
According to Gamea, SMEDA CEO, the protocol is the first of its kind, as it directs customers who own SMEs to the branches of the bank in the target governorates in order to receive credit facilitations for their projects. They are also provided with a statement of all the documents required by the bank in that regard.
She pointed out that the SMEDA also offers non-financial services to clients, including aid in issuing official documents for the projects, as well as offering cooperation on marketing products through participating in internal and external fairs, in addition to contributing to building skills through providing training opportunities in the field of entrepreneurship.
She explained that the agreement targets funding the automotive and transportation sector feeding industries, as well as the feeding industries of the electricity and contracting sectors, in addition to renewable energy projects, handcrafts, textiles, food industries, packaging, agricultural products, breeding cattle, developing fisheries, livestock, wood furniture, aluminium, and glass. It further targets the fields of exporting agricultural products, agro-industries, and commercial activities.
According to Tantawy, MIDB managing director, the bank will determine the terms and conditions required for clients who own SMEs so that they can receive credit facilitations. The bank will also study and examine the projects applying for the funding and make decisions regarding them under the umbrella of the bank’s funding services and initiatives. MIDB also submits a monthly report to the SMEDA on the implemented credit facilitations under the framework of the agreement.
He added that the protocol requires clients to have proper experience and requires the availability of some guarantees from a credit risk company and having the required documents while applying the controls and conditions based on the bank’s credit policy within the rules and instructions issued by the CBE along with other relevant controls.