AfDB grants $148 million to CIB Egypt to boost SMEs and trade

Ahram Online , Sunday 3 Dec 2023

The African Development Bank (AfDB) announced a financial package of $148 million to support the Commercial International Bank of Egypt (CIB) in its endeavors to strengthen small and medium enterprises (SMEs) and facilitate trade.

CIB branch.
CIB branch.


The package comprises a $10 million line of credit with a tenor of 10 years and a $90 million subordinated loan with the same tenor, according to the AfDB statement.

Additionally, the package encompasses a $32 million trade finance line of credit with a tenor of 3.5 years, along with a $16 million trade finance line of credit sourced from the Africa Growing Together Fund (AGTF) for the same duration.

Given the challenging economic environment in Egypt marked by a shortage of foreign currency, this financial support is aimed at helping CIB meet the foreign currency requirements of its clients across diverse sectors, the statement added.

The primary objective of this substantial funding is to equip CIB with long-term resources to lend to businesses, bolster the bank's capital position, and meet the trade finance needs of its clients.

The primary beneficiaries are anticipated to be small and medium-sized enterprises (SMEs) and corporations operating in key sectors of the Egyptian economy.

The AfDB expects this financial support to have a positive impact by mobilizing substantial resources for crucial economic sectors in Egypt, thereby enhancing productive capacity and stimulating growth.

Ultimately, the goal is to augment economic output, improve competitiveness, generate fiscal and export revenues, and create employment opportunities, with particular attention given to empowering women, as per the statement.

In recent months, S&P Global and Fitch Solutions downgraded the credit rating of the CIB, as well as major state-owned Egyptian banks, from B to B-.

To cushion against economic risks, the CIB secured a $150 million loan from the European Bank for Reconstruction and Development (EBRD) in November.

Similarly, in July, the CIB received $250 million in long-term loans from the International Finance Corporation (IFC) to support its capital and fund green projects.

Established in 1975, CIB is Egypt's largest private sector bank, offering a comprehensive range of financial products and services to enterprises of all sizes, institutions, households, and high-net-worth individuals.

The bank's total assets reached EGP 635.83 billion (around $20.6 billion) in 2022, up from EGP 498.23 billion in 2021.

Last week, the AfDB approved a $131 million loan to Egypt to bolster the government's efforts in stimulating the private sector and diversifying its green development amidst the challenges posed by the COVID-19 pandemic and the Russia-Ukraine conflict.

Egypt has set its sights on securing $300 million from the AfDB through FY2023/24, aligning with the country's objective of obtaining $3 billion in financing by the end of 2023, as it seeks to bridge an estimated $17 billion gap over the next four years.

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