“Don't wait on a public-sector job, and don't blame the government if you can't be employed. Take a loan and choose the project that suits you and start working,” said Amr Abbas, 31, advising Egyptian young people to chase their dream jobs. After failing for years to land a government job, Abbas bought a small shop to sell staple Egyptian foods like fuul and falafel. But this was not enough. He also applied for a loan from the Micro, Small and Medium-Sized Enterprise Development Agency (MSMEDA) to make his project bigger. “I received a LE50,000 loan from the MSMEDA and opened the first branch of my stores selling authentic Egyptian food. I worked around the clock, and I have put my all into the project. Now, after two years of hard work I am about to open a second branch, and I will not stop fighting until I fulfil my dream,” he said. The MSMEDA was known as the Social Fund for Development until 2017. It was established in 1990 with the purpose of becoming a social and economic safety net to contribute to decreasing unemployment, alleviating poverty, raising living standards and accelerating comprehensive social and economic development. The agency has improved the financial services available to young people to encourage them to set up their own projects, since the small-enterprise sector is a catalyst for economic growth. In Egypt, small and medium-sized enterprises represent around 80 per cent of the economy, with most of them operating informally. A bill has recently been drafted to help integrate the informal sector into the larger economy. The Small and Medium-Sized Enterprises (SMEs) law aims to encourage SMEs to operate formally by giving them new incentives. In the first four months of 2019, the MSMEDA pumped LE3 billion into 126,000 micro and small-sized enterprises. Since its inception, the agency has poured LE48.5 billion into funding three million micro and small-sized projects that have generated half a million jobs. The MSMEDA's funds can reach a maximum of LE2 million for a single project. Its loans can be acquired either from the agency's branches across the country, according to the regular funding system or in compliance with Islamic Sharia Law, or from banks contracted by the MSMEDA, or from non-banking financial institutions. One of the conditions to apply for a MSMEDA loan is for the applicant to be from the same governorate where he is applying. The project, however, may be set up in a neighbouring city. The applicant has to have all the documents for the project when he applies for the funding, and he can enrol in a 48-hour training course on “how to come up with an idea for a project” if he lacks experience. Mohamed Magdi, 38, has been a glass manufacturer for 23 years, with the trade running in his family across generations. “My work was affected by the 25 January Revolution. Liquidity became a problem. I applied for a LE10,000 loan from the MSMEDA to give my business a boost,” he said. Magdi found LE1,000 a month to pay off the loan. “Now I exhibit my works at bazaars and exhibitions in Sharm El-Sheikh and Hurghada.” For Soad Hussein, setting up a project after receiving MSMEDA funding was not an easy ride. Hussein wanted to establish a business after her husband died in order to send her children to school. At first, she joined the agency's training course that also taught her how to conduct a feasibility study. Then she enrolled in a furniture-making workshop in the Marioutiya district in Giza, received a LE15,000 loan from the MSMEDA, and bought three machines. Hussein's problems at the beginning of her project were the expensive prices of the fabrics she needed and the fact that her sales were minimal because the market was not familiar with her products. When she became unable to pay the installments on the loan, MSMEDA officials paid her project a visit to pinpoint the problem, conduct another study, and offer new alternatives. A short time later, Hussein developed her potential, manufacturing pullovers that matched the quality of those sold at stores at a lesser cost. In no time, Hussein's products were selling like hot cakes. When those taking out the loans are unable to pay the installments, the MSMEDA studies each case individually and may extend the installments period, thereby decreasing the monthly amount paid. The MSMEDA said legal measures were taken if borrowers are found to have not been paying their monthly installments and allocating them to purposes other than their stated projects. The loan installments of small enterprises are paid monthly, while those of bigger projects are paid every three months. The conditions to receive a MSMEDA loan include being literate and over 21 years of age, having a military service certificate and a police-clearance certificate that demonstrates the applicant's good conduct, being devoted to managing the project, and having no more than 50 insured project workers. *A version of this article appears in print in the 7 November, 2019 edition of Al-Ahram Weekly.
