File Photo: People walk in front of Banque Misr in Cairo, Egypt (Photo: Reuters)
The European Investment Bank (EIB) has provided Egypt’s Banque Misr with a €425 million credit line to support local private small and medium-sized enterprises (SMEs) that have been affected by the COVID-19 pandemic, EIB stated on Thursday.
The new facility aims at boosting the SMEs' ability to lead Egypt’s economic growth. It is also is expected to finance investment projects, and working capital needs, in productive and service sectors, thus sustaining growth and employment while helping to mitigate the economic and social impact of the COVID-19 crisis, according to EIB.
Banque Misr is the second largest bank in Egypt with a clear focus on SME lending and a large retail presence across Egypt.
In 2019, Banque Misr served more than 123,000 SMEs across the country, which makes it one of the largest supporters of the SME sector in the country.
Since 2015, the EIB has provided €3.9 billion in support of Egyptian SMEs and mid-caps through 15 operations, accounting for about a third of the bank’s portfolio in Egypt, according to the EIB.
The EIB said the facility is part of its contribution to the Team Europe response to the COVID-19 crisis in European Union (EU) partner countries. The facility is consistent with the objectives of the External Lending Mandate (2014-2020) and the EU cooperation with Egypt as set out in the EU Single Support Framework for Egypt for 2017-2020, as well as the EU-Egypt Partnership Priorities. It is meant to support private sector development with a focus on SMEs, increased competiveness, job creation, and financial inclusion.
”We are reinforcing our partnership with Banque Misr to support the bank’s strategy to expand in SME financing. Our new credit line comes at a time when SMEs need strong support to overcome the challenges created by the COVID-19 pandemic. SMEs are most vulnerable to the impact of this global crisis. We are proud of our partnership with Banque Misr and the tangible impact that our project will have on people’s lives in Egypt,” said Flavia Palanza, EIB director for neighbouring countries.
She noted that SMEs create job opportunities and add value and innovation while delivering products and services that people need. Businesses need access to finance and affordable credit from banks, she added.
"A number of EU programmes where EU grants are pooled with loans provided by European Financial Institutions (EFIs) are supporting businesses by offering them access to direct concessional loans or guarantee schemes with local partner banks," Palanza quoted Christian Berger, ambassador of the EU to Egypt, as saying.
In April, the EU together with its member states and EFIs launched the Team Europe package to help partner countries to cope with the consequences posed by the pandemic, including its socioeconomic impact.
Akef El-Maghraby, vice chairman of Banque Misr, said the agreement seeks to assist national companies – mainly SMEs – in performing various activities, especially in light of the implications of the COVID-19 crisis.
He added that Banque Misr is one of the most pioneering financial institutions in supporting and financing SMEs -- a vital sector -- which contribute 20 percent of the total financing portfolio.
This comes in line with the directives of the Central Bank of Egypt and the state's efforts to advance the sector and improve economic indicators, drive rates of economic development, promote local products, and reduce the import bill, according to El-Maghraby.
He added that Banque Misr is interested in providing financial support to the SMEs sector via its network of more than 700 branches across Egypt, coupled with the bank's endeavours to provide distinctive financing mechanisms that meet the financing needs of projects in all sectors of economic and service activities that advance the national economy.
Moreover, Banque Misr launched the “Express” loan for small projects, which is the first integrated digital product, allowing Banque Misr’s small project customers to submit a financing application online via its website. The small project financing loan can be obtained within five days of the date of submission, said El-Maghraby.