Egypt unveils new programme to finance 350,000 SMEs
The objective is to provide EG£200 billion (€23.6 billion) of financing.The Central Bank of Egypt (CBE) has announced a plan to support the development of small and medium-sized enterprises (SMEs) over the next four years.
The objective is to provide EG£200 billion (€23.6 billion) of financing to 350,000 SMEs, with banks required to increase the percentage of loans allocated to this sector to 20 per cent of their total loans portfolio.
To encourage them to do so, banks will receive a declining interest rate of five per cent annually, applied on the loans offered to companies with annual revenues ranging between EG£1m to EG£ 20 million, The CBE said in a press release.
It added that will also launch a mechanism to minimise the risks faced by banks while financing SMEs, and has already launched consultations to restructure a credit guarantor in order to provide banks with guarantees.
The CBE said the plan is expected to contribute to boost production, exports, income levels and job creation.
Experts from the central bank forecast that supporting 350,000 SMEs will create approximately four million jobs over the next four years.
The CBE highlighted the importance of providing information to venture capitalists and investors, and facilitating their access to banks, in addition to providing the needed training for small businesses in order to increase their chances of success.