The global rating agency Moody's stated Monday that the Egyptian banks have recently been receiving larger amounts from multilateral development banks to increase their lending to small businesses, which are the economy's largest employer. The banks will overall benefit, despite the higher risk associated with the small and medium-sized enterprises (SME) lending, as this new lending will help to diversify over time their concentrated balance sheets and revenue sources, added Moody's, according to Mubasher website. Private-sector loans account for a low 30% of GDP in Egypt, where SME loans are estimated to make up around 5% -10% of the total, noted Moody's. Among Moody's rated banks, National Bank of Egypt (B3 stable, caa1) has the largest SME exposure, said Moody's. Although the authorities have taken several steps to facilitate SMEs' access to finance and additional planned initiatives are under way, the banks are cautious in their expansion as risk remains high, pointed out Moody's.
