The World Bank has approved the allocation of $200 million to support SMEs in Egypt. The fund will focus on expanding the amount and access to credit for small and medium enterprises, which have proven to be a major source of growth and job creation.
Dubbed ‘Catalyzing Entrepreneurship for Job Creation’ the fund is designed to address the major obstacles that young people and women face when launching new businesses. In an economy where the financial system is dominated by banks lending primarily to mature businesses, the project will channel US$145 million mainly through non-bank financial institutions offering loans to small businesses. This project component will have established lending targets for women and youth-led businesses, first-time borrowers, and small business in less developed regions across Egypt. The project will also fund coaching opportunities for new businesses through the entrepreneurial lifecycle to build the necessary skills and capacity for success.
‘’ Entrepreneurs – and especially women- are a cornerstone for strong and stable economies.’’ said Dr. Sahar Nasr, Egypt’s Minister of Investment and International Cooperation and Egypt’s Representative on the World Bank’s Board of Governors. ‘’ Our partnership with the Word Bank Group aims to empower Egyptian women and youth to become successful entrepreneurs. This is an investment that offers many opportunities to improve the livelihoods of Egyptians through job creation and contributing a solid foundation for the country’s economy.’’
The project also aims to increase the supply of seed, early-stage, and venture capital going to riskier and innovative start-ups and young small and medium enterprises with high potential for growth and job creation. To build up the early-stage investment ecosystem in Egypt, the project will invest US$50 million in privately managed risk capital intermediaries, such as angel funds, accelerators, VC funds, and investment companies. A call for proposals will be issued, with international players encouraged to apply, and the funds distributed through a transparent and competitive selection process. The aim is to leverage the technical capacity and know-how of the private sector in investing these funds.
‘’ Egypt has shown strong commitment to reforming its economy.’’ Said Marina Wes, World Bank country Director for Egypt, Yemen and Djibouti. ‘’ While the reforms are beginning to bear fruit, enabling the private sector to create jobs is integral for achieving sustainable and inclusive growth. We are proud to be supporting Egypt’s entrepreneurs across the country, especially the women and young people who remain Egypt’s valuable yet most untapped potential.’’
The new program builds on the success of the ongoing ‘’Promoting Innovation for Inclusive Financial Access’’ project which provides small and medium businesses with access to finance and promotes private sector job creation across Egypt. To date this project has created about 300,000 jobs, benefitting approximately 70,000 women and 56,000 youths.
The World Bank has a diverse package of support to Egypt focused on expanding social protection and social inclusion to all citizens, improving competitiveness and infrastructure in less developed parts of Egypt, developing a digital development strategy for the jobs of tomorrow, leveraging private sector investments for infrastructure, and reforms in the education and health sector to help build human capital. The World Bank currently has a portfolio of 16 projects in Egypt with a total commitment of US$6.69 billion.