The National Bank of Egypt (NBE) announced Saturday that it has loaned EGP 19bn to approximately 45,000 small and medium -sized enterprises (SMEs) in the past year.
The bank also provided approximately 1,000 marketers to assist companies’ with their projects.
The NBE reported that it had increased the total value of loans provided to SMEs and micro enterprises by 600% compared to the total provided in 2008 and by 300% compared to 2012.
In January the Central Bank of Egypt (CBE) announced a plan to provide EGP 200bn to 350,000 small and medium enterprises (SME) over the next four years.
The CBE directed banks to increase the percentage of loans allocated to this sector to 20% of their total loan portfolios.
Under the CBE’s January decision, banks were provided with a declining interest rate of 5% annually, applied on loans offered to companies with annual revenues ranging between EGP 1m to EGP 20m.
The NBE developed its financing mechanisms in accordance with the new CBE rules and regulations.
According to the NBE, the bank will finance up to 90% of total project costs with the provision of seven-year payment facilities with a variable interest rate of 5% that decreases over the lifespan of the loan.
The NBE announcement stated that the CBE initiative aims to reduce the cost of financing SME and micro business projects, while increasing their chances of success, help in providing high quality local goods with favourable prices which meet the needs of citizens and significantly reduce dependence on importing consumer goods.