SME Financing In Egypt

Although the lending activity in Egypt has been growing, Egyptian banks continue to enjoy 'large financial flexibility as the credit facilities to deposits ratio remains low at a mere 42%'¹. This figure is partially due to the fact that a minor portion of retail and corporate bases 'actually have a creditor/debtor bank account'².

Recently, according to the ongoing reforms undertaken by President Abdelfattah Al-Sisi, aiming to boost economic activity and raise financial inclusion, the Central Bank of Egypt is working closely with banks, in particular state-owned (such as Bank of Cairo, El Ahli Bank, Bank of Suez Canal, Bank Misr) to increase SMEs credit keeping in mind that this segment represents 'the backbone of the domestic economy'³. In alignment with the program, the CBE obliged Egyptian banks to 'give out 20% of their total loans portfolio to SMEs'⁴. This is expected to provide 350,000 SMEs with EGP 200 billion within the upcoming four years at an interest rate