Business growth in the MENA region hampered by lack of access to credit

Aug 19, 2016

A new report highlights the concentration of bank loans.

Political instability, corruption, poor electricity supply and lack of access to credit is impeding business development in the Middle East and North Africa (MENA), according to a new report

The study, led by the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the World Bank, is based on a survey of 6,000 companies in the technology and services sector.

It shows that political instability caused by the Arab Spring, unresolved social tensions and conflicts in the region stand out as the main concerns for managers and business leaders, newspaper African Manager reports.

The financial sector of the economies covered by the study is relatively large, with loans / GDP ratios higher than comparable economies.

However, bank lending is highly concentrated, since loans are granted to a limited number of large firms, while the majority of companies have little or no access to credit.

Private equity plays an insignificant role in the region, while other sources of funding, including microfinance, are important in Tunisia, the West Bank and Gaza.ADNFCR-2976-ID-801823838-ADNFCR