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Egypt's microfinance portfolio reached EGP 47bn by 2020 end: CBE Sub-Governor Small enterprises play inherent role in Egyptian economy to achieve development, create jobs, says Minister Al-Mashat
Initiatives launched by the Central Bank of Egypt (CBE) have raised the country's microfinance portfolio to about EGP 47bn in December 2020, according to CBE Sub-Governor May Abulnaga. The unprecedented boom in Egypt's microfinance ecosystem has been directed to 4 million customers, with EGP 27.8bn coming in the form of direct and indirect financing from banks. It compares to the EGP 6.4bn recorded in December 2016 directed to 2 million customers. Abulnaga added that the CBE is aware of the importance of the microfinance ecosystem, its role in creating jobs, and in reducing poverty and inequality. She added that the CBE is working alongside the Financial Regulatory Authority (FRA) and the Egyptian Microfinance Federation (EMFF) to address the challenges facing the microfinance sector through various initiatives and by promoting financial inclusion. This comes as the CBE puts micro, small, and medium enterprises (MSMEs) at the forefront of its priorities. Abulnaga also showcased the initiatives launched by the CBE over the past few years to encourage and boost Egypt's microfinance sector. The initiatives included allocating 25% of the credit bank portfolios to finance MSMEs, in addition to an initiative aimed at increasing the efficiency and capabilities of Category C microfinance entities. This initiative has trained 1,128 employees across 11 governorates, and enhanced the capabilities of 41 institutions operating in the sector. Abulnaga's remarks came during at Multi-Stakeholder Platform (MSP) on microfinance, titled "MSMEs: The Power of Small", held by Minster of International Cooperation Rania Al-Mashat. The event presented the latest developments in enhancing Egypt's microfinance business environment through the EMFF programme for Institutional Rehabilitation. This includes various categories of associations and institutions operating in the sector, in accordance with FRA, CBE, and the Egyptian Credit Bureau, I-Score. The MSP included the participation of: EMFF Chairperson Mona Zulficar; May Abulnaga Sub-Governor at the CBE; Islam Azzam, Deputy Chairperson of the FRA; and Mohamed Kafafy, Chairperson of I-Score. This is alongside development partners including the United Nations (UN) and the World Bank. Minister Al-Mashat stressed that small enterprises play an inherent role in the Egyptian economy in achieving development, by creating job opportunities and promoting a culture of self-employment. In 2020, the Ministry of International Cooperation secured development financing worth $3.2bn via multilateral and bilateral cooperation, through direct financing to private sector companies. It also received this financing through credit lines to commercial banks for the financing of small- and medium-sized enterprises (SMEs). In light of its paramount importance, more work needs to be done in this sector, as SMEs represent about 99% of the total private sector projects in Egypt. They also employ about 75% of the total workforce, as per UN Development Programme (UNDP) data. The minister explained that through MSPs, new horizons of cooperation between government entities, the private sector, and multilateral and bilateral development partners arise across various fields. Such meetings open the door to discussing available opportunities, setting priorities, and overcoming challenges. These would take place in a way that enhances the Egyptian Government's vision, and is in line with the UN Sustainable Development Goals (SDGs). "In light of the Egyptian Government's endeavour to move forward with reforms, push development efforts in various fields, and initiate structural reform programmes, MSMEs are an essential element to achieve sustainable development," said Minister Al-Mashat. For his part, Azzam stressed the importance of bringing all stakeholders together to cooperate and help push the microfinance sector forward, especially during the novel coronavirus (COVID-19) pandemic and the challenges it caused. He said that the FRA seeks to provide full support for microfinance projects by focusing on digitisation, digital inclusion, and in supporting companies to create more job opportunities, and empower women and entrepreneurs.
