Financing for Micro-, Small and Medium Enterprises (MSME) II

Background:

MSMEs in Egypt suffer from limited access to finance through formal financial institutions, which focus on serving larger established companies. The Government and the Central Bank of Egypt (CBE) are putting pressure on banks to reach more SMEs with credit as well as other financial products. With 6.4 million enterprises (formal and informal sectors), Egypt has by far the largest MSMEs market in the Middle East and North Africa region.

The purpose of the Project is to improve the access of Egyptian MSMEs to need-based financing in order to enable them to increase and safeguard employment and income. This is to contribute to the improvement of the conditions for sustainable economic growth and employment in Egypt. KfW committed to fund technical assistance in addition to 30 mio EUR credit line allocated for Egypt MSMEs, especially focusing on start-ups and innovative enterprises, funded via Egyptian Micro, Small and Medium Enterprises Development Agency (MSME-DA) and selected Partner Financial Institutions.

Objective:

Support MSME-DA in setting-up and implement the 30 mio EUR loan for MSMEs, by supporting the elaboration of the proper policy and credit-line document and procedures, and by giving advice on the individual loan applications where required. Although being only services for the start-up only, the services shall contribute to strengthen further MSME-DA, especially Environmental and Social Management System (ESMS) for such loans and the sphere of Risk Assessment and Management for the target groups and instruments of the loan windows, the latter including as well the finance of innovation.

Results:

• Strengthen the Environmental and Social Management System
• Compile Electronic Archive / Credit Line Handbook
• Forecast of MSMEs Financing needs
• Monitor the approval of sub-credits to PFIs and individual sub-loans
• Support the disbursement process of the Credit line
• General Reporting on the Credit Line and Cooperation