The Micro, Small, and Medium Enterprises Development Agency (MSMEDA) and Banque du Caire have signed two contracts worth a combined EGP 620m that will be refinanced on soft terms to micro-projects.
Nevine Gamea, Minister of Trade and Industry and MSMEDA CEO, said the first contract is worth EGP 500m and will be directed to the Initiative for Microfinance. She said that this financing was provided through a World Bank agreement to stimulate entrepreneurship, with 70% of the financing’s total value to be directed to youth and women projects.
She added that the second contract, worth EGP 120m, will be directed to the Supporting Women for Microfinance project. This financing was provided through a French Development Agency agreement, with the priority given to the poorest provinces.
Gamea said the micro-project loans range from between EGP 5,000 to EGP 50,000, and are expected to benefit 40,000 projects.
The two contracts come as part of directives from President Abdel Fattah Al-Sisi providing a range of support mechanisms for youth and women’s projects, especially micro-projects. These have been affected by the economic fallout from the coronavirus (COVID-19) pandemic, and work to provide these projects with the necessary funding.
This ensures they continue to provide their services to customers and a decent life for their owners, especially in Upper Egypt.
Recommendations by Prime Minister Mostafa Madbouly highlighted the need for rapid funding to help the micro-enterprise sector during the ongoing health crisis, and increase the portfolio dedicated to financing these projects.
There will also be focus on women and youth, as these projects provide job opportunities, and work to increase production and income, reflected in improved quality of life for those involved in these projects.
Tarek Fayed, Chairperson and CEO of Banque du Caire, emphasised the importance of the agreement, as it contributes to effective financing of micro-projects whilst increasing financing resources through soft loans.
Fayed pointed out that the bank’s visions and policies aim to support state plans to support these projects for their importance in sustainable development. It taps into the bank’s 19-year experience in the sector that has created 1.3m jobs, and created 500,000 customers in the last three years.
He added that the bank’s has the benefit of a decent geographical spread, especially in Upper Egypt, which account for 53% of clients. A total of 35% of accounts with the bank are held by women, and 40% held by youth.
Banque du Caire and the MSMEDA have partnered on several contracts since 2012, which amount to a total value of about EGP 2.7bn. These have been used as revolving loans, through which about 570,000 micro-projects were financed with EGP 7.7bn.