The World Association for Small and Medium Enterprises (WASME) has decided to hold its annual conference in September in Cairo instead of Kenya. The decision was taken due to the association’s interest in the Egyptian market, according to Dr Khaled Nagaty, Vice President – MENA Region at the association.
Nagaty explained, in a special interview with Daily News Egypt, that the conference decided to focus on developing SMEs in Egypt, Sudan, Libya, Iraq, Syria, and Yemen.
What is the story behind the visit of WASME’s President to Egypt last Thursday?
The visit of Babale Girei, President of WASME, to Egypt was prepared several months ago. Babale was keen to meet Mounir Fakhry Abdel Nour, Minister of Trade and Industry and Small and Medium Enterprises, to study ways of cooperation between Egypt and the association in supporting those projects in Egypt. The cooperation would take place through technical and technological support to Egypt by the association, and benefitting from WASME’s experience with some countries, like India and Malaysia. In fact, Babale Girei cares a lot about Egypt, as the gate of the Middle East and North Africa (MENA). He believes that it is necessary to seriously focus on supporting the sector of SMEs in the region in the next period, after the positive changes that Egypt witnessed on the political and economic level in the last period, especially after the Economic Summit took place in March.
Does the association’s interest in the Egyptian market only focus on technical support to develop SMEs?
Of course not. The association is one of the most dynamic organisations in the field of supporting SMEs in different countries worldwide. It has a programme to work with the Egyptian government to bring Egypt back to its regional role in that field. Within this framework, the association is preparing with the Egyptian government to hold its annual conference in Egypt for the first time in the history of the association, which was established in 1980.
The conference will be attended by roughly 1,500 SMEs owners from most of the world’s countries, in order to study the ways of cooperation between them and the owners of similar projects in Egypt. Throughout the conference, B2B meetings would be held in between. Executives from different governmental and international bodies will also attend the conference. The conference will discuss the problems and challenges faced by small- and medium-sized enterprises in the Middle East and North Africa. There will be a special focus on developing these projects in the countries that have witnessed serious political events, particularly Egypt, Sudan, Libya, Iraq, Syria and Yemen.
Is there an actual presence of WASME in Egypt?
Yes, a headquarters was established in Cairo. It is responsible for all the association’s activities in the Middle East and North Africa, not just in Egypt. There are plans to open two more branches in the governorates of Assiut and Alexandria in September, whereas outside Egypt, the association is considering opening a new branch in Dubai and Saudi Arabia. WASME also has a branch in the US and another in South Africa. I took the position of Vice President, as a representative of Egypt, in elections that were held last September at the headquarters in India.
As head of the Egyptian association of small and medium-sized enterprises besides your role in WASME, how do you see the problems of the sector?
Small- and medium-sized enterprises in Egypt are similar to those in many countries, they are facing many problems, most prominently, the absence of a standardised definition of these enterprises that help distinguish them from major projects financially, in addition to the absence of a special mechanism for the evaluation of these projects that is different from all criteria used to evaluate major projects. These enterprises also lack regular accounting records and real financial statements, where it’s known that financial statements and budgets provided to taxes, are different from those provided to banks and other lenders. There are other problems that include the lack of credit, financial and administrative awareness of those managing the enterprises, in addition to the absence of real feasibility studies that lenders can rely on.
Do you believe that banks give the financing of major enterprises more attention than that of small- and medium-sized ones?
Unfortunately, yes, although small- and medium-sized enterprises are considered two of the most important development pillars targeted by Egypt, where this sector represents 80% of the Egyptian economy, and has a direct positive impact on labour force work and the reduction of the unemployment rate. Small- and medium-sized enterprises represent only 8% of loan portfolios in banks, which is a very small rate, as it shouldn’t be less than 30%. For these banks to succeed in supporting these enterprises, they must obtain at least a small portion of these projects, allowing the presence of a delegate from the bank during board of directors meetings in order for them to see the extent of the commitment to the implementation of the plans provided to banks when funding requests are made.