The European Bank for Reconstruction and Development (EBRD) announced Monday it is partnering with Egypt’s fourth largest commercial bank QNB AlAhli to step up its support for small businesses in Egypt with a US$100 million credit.
Access to finance for SMEs remains a key issue in Egypt and has become a top priority for the Egyptian authorities.
According to a statement from the EBRD released Monday, the proceeds of the credit will be on-lent to small and medium-sized enterprises (SMEs), helping to address the problem of insufficient access to finance for this important sector of the Egyptian market.
“We are very pleased to team up with QNB AlAhli in helping to increase the levels of SME finance in the Egyptian economy,” said Philip ter Woort, Director for Egypt at the EBRD. “The EBRD is keen to support QNB AlAhli to continue increasing its activities in the SME area with ambitious growth targets.”
“It gives us a great pleasure to cooperate with the EBRD and achieve this remarkable transaction that goes in line with our ambitions and objectives in supporting Egypt’s business community and its economic development with particular emphasis on SMEs segment development and Egypt’s international trade activities,” said Mohamed El Dib, Chairman and Managing Director of QNB AlAhli. “We are looking forward to further strengthening this partnership to meet our mutual objectives and for the benefit of the Egyptian economy.”
The EBRD will continue to place high priority on financing and improving conditions for investment in the private sector, with particular emphasis on increasing the access to finance for SMEs, energy efficiency projects and renewables.
SMEs have strong potential to provide jobs in a country where youth unemployment remains both an economic and a social problem.
In addition, the Bank is supporting the expansion of international trade in Egypt by providing a US$ 40 million trade facility to QNB AlAhli under the EBRD’s Trade Facilitation Programme (TFP).
Under this facility the EBRD will issue guarantees in favour of QNB AlAhli, covering political and commercial payment risks for transactions made by QNB AlAhli and provide cash loans to fund trade-related advances to local companies exclusively for pre-export, post-import and local distribution of imported goods.
Launched in 1999, the TFP aims to promote foreign trade to, from and among the EBRD’s countries of operations. Under the programme, the EBRD not only provides guarantees to international confirming banks but also grants short-term loans to select banks and factoring companies for on-lending to local exporters, importers and distributors.
The TFP currently includes over 100 partner banks in 23 countries where the Bank invests, with limits exceeding €1.5 billion in total, and more than 800 confirming banks worldwide.
The EBRD has invested in Egypt since the start of its activities at the end of 2012 in excess of €900 million through 27 projects (including regional) in a wide range of sectors including the financial sector, agribusiness, manufacturing and services as well as infrastructure projects such as power, municipal water and wastewater and contributed to the upgrade of transport services.
