European Bank for Reconstruction and Development (EBRD) (Reuters)
The European Bank for Reconstruction and Development (EBRD) is supporting the real economy in Egypt with a $200 million financing package to Banque Misr for trade and for on-lending to small and medium-sized enterprises (SMEs) and private businesses impacted by the COVID-19 crisis, the EBRD announced on Wednesday.
Under this facility, the bank will provide a $100 million loan to enable Banque Misr to provide short-term financing to private SMEs facing liquidity strains due to a decrease in their activities and turnover caused by Covid-19 crunch, according to the EBRD.
Meanwhile, the Bank has increased the existing trade finance limit to Banque Misr by $100 million under the EBRD’s Trade Facilitation Programme (TFP), in order to meet the increased demand for import and export transactions.
The bank said that this financing package is under the EBRD’s coronavirus Solidarity Package, established to meet immediate short-term financing needs to private businesses through existing EBRD partner banks.
The EBRD expects to dedicate the entirety of its activities to combating the economic impact of the crisis and stands ready to provide support worth €21 billion over the 2020-2021 period, in order to help the 38 emerging economies where it invests.
In July, President Abdel-Fattah El-Sisi ratified Law 152/2020 for the micro, small, and medium-sized enterprises (MSMEs), which aims to boost the sector amid the COVID-19 crisis through new incentives.
Under the stand-by program agreement that Egypt signed with the International Monetary Fund (IMF) in June, Egypt is required to support the private sector and engage it in the country's development process, in addition to working hand-in-hand with the public sector in ongoing and future investments in the country.
Egypt's Minister of International Cooperation Rania Al-Mashat said that the EBRD's facility is in line with the ministry's strategy focusing on the international developmental partnerships.
Banque Misr was established in 1920 and is the second-largest bank in Egypt with total assets of €54.1 billion, as of December 2019. It has been a partner of the EBRD since 2017, when a first small business loan was signed followed by a trade finance facility in 2018.
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the EBRD has invested close to €7 billion in 120 projects in the country, according to the bank.