The Central Bank of Egypt's (CBE) "initiative to promote supporting microenterprises" will allocate EGP 20 billion through banks to fund eight million new enterprises in the upcoming three years, the CBE governor announced.

During the launching of the initiative on Tuesday, central bank governor Tarek Amer said that the CBE initiative aims to include banks as sources of funding for microenterprises, state news agency MENA reported. 

“Since there is a huge funding gap for the needs of microenterprises, which is estimated at EGP 30 billion… the bank launched this initiative so organisations would be able to provide the funding needed for micro-sized businesses,” Amer said.

Microenterprises in Egypt are funded by the Social Fund for Development, the Ministry of Social Solidarity and the Local Development Fund, though banks have not traditionally provided funding for micro-sized ventures. 

There is a total of 2.4 million small and micro-sized enterprises across Egypt with 6.3 million workers, according to a CAPMAS study titled 'The Reality of Small and Medium Enterprises (SMEs) 2009 - 2015' released in September.

Women have contributed up to 50 percent to microenterprises across Egypt supported by the Social Fund for Development (SFD) from 2009 to 2015, CAPMAS revealed.

In January 2016, Egypt’s central bank announced the launching of a four-year programme to increase financing of SMEs nationwide, as these businesses are key contributors to the state’s investment and production sectors. 

With the country's ailing economy and unemployment at 12.5 percent in the second quarter of 2016, it is believed that SMEs constitute a great opportunity to boost the economy and create jobs.

“Providing funding to small, medium and microenterprises would contribute to increasing the GDP and supporting the economy,” Amer said.