Egypt

The European Bank for Reconstruction and Development (EBRD) has stepped up its support for the economic development of Egypt, with the opening of an office in Alexandria today which will have a major focus on the promotion of small and medium-sized enterprises (SMEs).

The Alexandria team will be working primarily on support for small businesses, building on the success of the EBRD’s European Union (EU)-funded Advice for Small Business Programme, which has already delivered over 600 advisory projects for Egyptian firms.

Randa Al-Zoghbi, Center for International Private Enterprise’s Program Director in Egypt, discussed the release of their new app, Tamweely, in partnership with the World Bank. The app is designed to connect financiers to small businesses and entrepreneurs in Egypt seeking start-up funding. It will also provide business education tools and information about the institutional and legal environment for entrepreneurs and startups. She shares where she sees the app’s future. Al-Zoghbi also discusses the economic situation in Egypt and the many challenges facing the business community there.

To what extent have efforts to increase cashless transactions in Egypt been successful?

ASHRAF SABRY: The measures have so far been successful, but it still takes time to become a completely cashless society. The country has advanced a lot in expanding what we call “silent business”, the ratio of people carrying cards in their wallets. But this is not enough. You can only become a truly cashless society if cards are being used for everyday business.

The main challenge facing small- and medium-sized enterprises (SME) in Egypt is obtaining required financing, according to banking experts at the first session of the SME Banking Conference for 2016 held on Monday. SMEs represent a fundamental pillar of the Egyptian economy, according to Hala El-Saeed, dean of the Faculty of Economics and Political Science. All sectors should be supported to push economic development, she said.

Egypt’s central bank has opened 2016 with two moves that could mean a lot to tech startups - or nothing at all.
In December 2015 the Central Bank of Egypt (CBE) changed its definition of SMEs and in early January this year it changed the rules around bank lending - stipulating that at least 20 percent of any bank’s loan book had to be to SMEs by the end of 2020 - as a stimulus package for 350,000 small and medium businesses.

“Entrepreneurs do not operate in a vacuum; they operate in an environment and what we’ve learned over the years is that enterprises can’t truly grow until the environment around them is supportive,” Sam Parker, Director of Shell Foundation, told Daily News Egypt.

“Policy can really help small and medium enterprises (SMEs) flourish; they don’t necessarily need the direct government funding, as in some cases owners can invest through private capital if they operate in a conducive environment which  allows easy access to licenses and facilitates operations for them,” he added.

The European Bank for Reconstruction & Development (EBRD) has lent $ 140 million to Egypt’s QNB Al Ahli to support small businesses and trade activities in the most populous country in the Arab world.

Access to finance for small & medium-sized enterprises (SMEs) is very important for the Egyptian market and economy affected by the political and social tensions rocking the North African country.