The United Bank (UB) allocated a portfolio of EGP 900m to finance small- and medium-sized enterprises (SMEs), along with training the bank’s employees to serve these projects.
Chairperson of the bank Ashraf El-Kady told Daily News Egypt that UB is specialised in financing these projects and has considerable experience in this regard. This comes as a result of the bank’s specialised administration in the field, which was launched back in 2010.
According to El-Kady, SME-projects represent about 12% of the bank’s credit portfolio, and he aims to increase that number to more than 20% before the end of 2019.
He noted that the bank signed two new contracts worth EGP 150m with the Social Fund for Development (SFD) two months ago, of which EGP 100m will finance new and existing small projects. The remaining EGP 50m will finance small projects according to various funding formulas, in accordance with Sharia law.
During the last three years, the bank has signed five financing contracts with the SFD for small enterprises on traditional systems and formulas compliant with Sharia law, totalling EGP 275m.
Those contracts financed 1,000 small projects, which provided about 5,400 permanent and temporary jobs.
The bank also offered a new financing formula for the management of SMEs that adheres to Sharia law. This service provides the project owner with the required financial and managerial support. Once the bank trusts the sustainability and success of the project, it gradually pulls out, according to El-Kady.
He added that the UB was also keen to put forward funding programmes for the development of intermediary services and the industrial sectors. These programmes include financing of carrier, distributor, supplier, environmental projects, and trademarks.
In response to a question about the role of the bank in financing micro-enterprises, El-Kady said that the UB is funding these projects directly and indirectly through financing the associations and organisations which support these projects in return.