EBRD and EU support MSMEs in Egypt

By Nibal Zgheib

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  • EBRD provides US$ 50 million financial package to NBK Egypt for on-lending
  • Funds to help MSMEs in Egypt grow
  • European Union (EU) to provide up to US$ 1 million in the form of first-loss risk recovery for businesses led or majority owned by Youth plus a generous cash incentive of up to 12 per cent for eligible sub-borrowers

The European Bank for Reconstruction and Development (EBRD) is providing a financial package of up to US$ 50 million to the National Bank of Kuwait Egypt SAE (NBK Egypt), to support micro, small and medium-sized enterprises (MSMEs) in Egypt.

The package comprises a loan of US$ 40 million that NBK Egypt will on-lend to local private MSMEs and a US$ 10 million loan under the EBRD Youth in Business programme, co-financed with EU funds under the Egypt Micro and Small Financial Inclusion programme, to be on-lent by NBK Egypt to local private MSMEs that are led or majority owned by entrepreneurs under the age of 35.

The EBRD’s Youth in Business loan component will be complemented by up to US$ 1 million in the form of first-loss risk cover provided by the European Union (EU) under its Egypt Micro and Small Financial Inclusion programme.

A comprehensive technical cooperation package, focusing on staff training and skills development, will accompany both loans. It will assist NBK Egypt with programme implementation, marketing and general awareness raising, in-person and digital training, mentoring and product development, as well as advisory services, with the aim of strengthening entrepreneurial skills and mindset.

The EBRD will also support NBK Egypt in improving gender equality practices and in better understanding the role of women clients and the barriers they face. As part of the Youth in Business loan, supported by EU and other donor funds, NBK Egypt employees will attend gender-responsive training (where they will establish and track the gender breakdown of the sub-loan portfolio) and participate in policy dialogue.

NBK Egypt is an Egyptian joint-stock company and a subsidiary of the NBK group. It has been a partner of the EBRD since 2015, when the Bank provided an SME loan and a trade finance facility, followed in 2016 by an energy-efficiency loan under the Egypt Green Economy Financing Facility.

The EBRD’s Youth in Business programme enables young entrepreneurs to access critically needed financing and technical assistance to grow their small businesses via dedicated credit lines on-lent by banks and microfinance institutions. The credit lines are complemented by technical assistance for partner banks to strengthen their lending capacity.

The loans were signed as part of an EBRD youth forum titled “Boosting Next Generation Businesses”, which provided an update on the activities of the Youth in Business programme. The event was attended by several banking and non-banking financial institutions, in addition to representatives from the Central Bank of Egypt.

Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested more than €10.3 billion in over 155 projects across the country.

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