Value Chain Finance Expert for the Consulting Services for the Private Sector Development and Innovation (PSI) in Egypt

Background:

Small and medium-sized enterprises (SMEs) are the backbone of a strong economy and create jobs for millions of people. Their capacity for innovation and their ability to adapt to an ever-changing business environment makes them a vital building block for economic growth and prosperity. SMEs are of particular importance in Egypt, which has long been the largest SME hub in the MENA region (Middle East and Northern Africa). Many entrepreneurs lack the management and technological experience to lead businesses in the growth process and increasing number of employees and to position them in national and international competition. Business activities of women entrepreneurs are particularly limited because they have even more limited access to financial services or lack experience in dealing with finances in general (financial illiteracy) due to socio-traditional norms and limited mobility outside the household.

Despite their substantial economic value, the situation of Egypt’s SMEs is hampered by the lack of access to formal financing instruments; the financing gap is still estimated at around EUR 1.3 billion annually. There is a lack of close cooperation of the supply and demand sides to ensure needs-based business financing for the private sector in innovative, job-creating sectors and value chains. The lack of access to suitable financial products is hindering the growth and expansion of SMEs. Only about half of all SMEs have a banking relationship and only one in five has access to credit. Securing formal financing often requires SMEs to undergo long and tedious procedures, causing many to resort to informal funding channels – i.e., borrowing from relatives or friends.

Objectives:

The main goal of this assignment: Under the project Private Sector Development and Innovation (PSI) access to finance for SMEs shall be improved through an integrated demand-supply side approach.

On the demand side, the PSI project engages with lead companies from different sectors with a focus on food processing, mechanical and electrical engineering, chemical manufacturing and processing, printing, and packaging industries. PSI not only engages with lead companies but aims to improve the value chains around lead companies and puts a focus on developing suppliers, distributors, and business development service (BDS) providers/platforms. On the supply side (financial sector), the PSI project aims to improve the sectorial knowledge of the financial sector in Egypt about Value Chain Financing and aims to offer Technical Assistance programs for financial institutions.

Tasks to be performed:

The consultant will be asked to deliver these specific work packages:

This is a hybrid assignment with parts of the assignment carried out remotely and other parts in Egypt (international travel depending on the Covid-19 situation). WP 3 is digital only – all other WP are hybrid.

Tasks of the Value Chain Expert:  

• Responsible for the implementation of WP1 & WP 2 (Value Chain Finance Consulting Facility & Financial Services Consulting Facility): coordinate missions of experts for the WP, analyze potential lead companies, suppliers, and business development service (BDS) providers/platforms to receive support, carry out field activities for respective companies.
• Draft and design tailor-made support modules for lead companies, suppliers, business development service (BDS) providers/platforms according to demand.
• Draft a training program on basic financial services and products for non-financial BDS advisors.
• Support the efforts in WP 3,4 and 5 to raise awareness among financial institutions with regards to the financing needs of lead companies/suppliers/distributors.
• Taking cross-cutting themes into consideration (such as gender equality, digital solutions)