Two projects from KfW in Egypt towards the financial inclusion of innovative MSMEs

30.11.2022
Undefined

Egyptian Banks are restrictive in their lending to SMEs. The conservative lending is illustrated in a low loan-to-deposit ratio, which attained approx. 45% in December 2019. Hence, a vast number of businesses in Egypt operate in different modes of informality.

AFC has been contracted to elaborate a feasibility study for a KfW credit line for microfinance activities in the Arab Republic of Egypt, while the beneficiary and executing agency is the Micro Small Medium Enterprise Development Agency (MSME-DA).

Our team of experts will analyse the viability and suggest a project design for two thematic financing windows under the credit line with a focus on a) female entrepreneurs/ borrowers, and b) green microfinance-projects or projects with positive effects on the climate, energy and resource efficiency. Hereby, we especially target MSMEs in remote and structurally disadvantaged regions, in rural locations or operating as informal businesses.

More specifically, AFC will perform the following tasks:

  1. Conduct a market analysis: We will collect and evaluate data on the microfinance market and the customer stratification in Egypt.
  2. We identify champions among microfinance institution-NGOs and microfinance companies with a strong potential for environmentally sustainable financing activities and the promotion for gender equality within the microfinance sector. The latter with a focus on access, specialized products, credit rating technologies and business advisory services.
  3. We take into account the champions’ capacities with regard to environmental and social management system (ESMS) and gender mainstreaming.
  4. We will design potential project approaches aiming at the enhanced financial access and financial inclusion of micro and small enterprises.

Previously, in March of this year, in the scope of another project, KfW and MSME-DA had tasked AFC to support the promotion of MSMEs in Egypt with a special focus on a) innovation and start-ups as well as on b) microfinance.

For the purpose of this assignment, we support MSME-DA in elaborating proper policy and credit-line documents and procedures, especially in the field of ESMS, and give advice on the individual loan applications where required.

We are looking forward to our successful cooperation with MSME-DA and KfW towards the promotion of MSME sector in Egypt.

 

 

For further information please contact: vladislav.nimerenco [at] afci.de ()