A council headed by the prime minister has been formed between the Central Bank of Egypt (CBE) and the Ministry of Finance to legalise the informal sector with the aim of achieving financial inclusion, said the CBE’s Deputy Governor Mai Abol-Naga.
In a speech during the SMEs conference on Monday, Abol-Naga said that 90% of small- and medium-sized enterprises (SMEs) are not registered.
She noted that there are many challenges facing the sector, aside from the funding problems, including the lack of experience and training and confusion when dealing with banks.
She explained that a large number of customers worry about dealing with the banks, for fear of high interest rates and excessive amounts of paperwork.
Abol-Nega added that a number of banks are still unaware that the SMEs sector is very profitable.
In a related context, Abol-Naga said the CBE is about to issue bylaws for the agricultural small enterprises (SEs) initiative, which will provide an interest of 7%, within days.
She noted that the CBE allocated EGP 5bn for the initiative, pointing out that it will follow the same system as the CBE’s EGP 10bn worth mortgage financing initiative.
The CBE is in the process of launching a fourth initiative to support the sector by facilitating dealing with Credit Guarantee companies, according to Abol-Naga.