Small and medium-sized enterprises (SMEs) represent 15% of the total loans portfolio in the United Bank, according to Ashraf El Kady, the chairperson of the bank.
El Kady stressed that the bank aims to increase this percentage to 20% by the end of 2018, which is before the period specified by the Central Bank of Egypt (CBE) for its initiative to support these projects.
According to Nevine Kashmiri, deputy managing director of the bank’s business sectors, said the bank has been able to achieve this growth in SME funding for several reasons, most important of which is the spreading of the banks 52 branches across the country. She pointed out that the existence of the branches in strategic areas has greatly contributed to increasing the number of clients benefitting from the funding allocated to these projects.
She stressed that the bank is not only limited to providing funding based on the rules approved by the CBE, but it also offers specialised technical advice to guarantee clients understand the best ways of investment of their money and developing their projects.
Kashmiri pointed out that her bank has taken serious steps that enabled it to achieve major growth in its credit portfolio, which is allocated to funding SMEs. This came on the back of the bank’s adoption of a clear vision and an integrated programme that aims to serve the sector professionally and develop it all while focusing on the industrial and service sectors and complementary industries.
Kashmiri said that the bank’s plan was made to support these projects based on five main aspects. The first is the careful studying of the market and the nature of clients as well as understanding their needs and prioritising them. She noted that the nature of these projects and their activities differ across the different governorates of the country, so there must be a plan to provide all services to meet the need of the bank’s new and existing clients.
She added that the second aspect is the preparation of an elite of individuals that are able to manage the SMEs and micro-enterprise sector professionally. The third aspect includes the application information technology systems that provide the maximum degree of safety as well as accuracy of the data to serve clients.
The fourth aspect is to qualify individuals to deal with and prepare data to obtain the credit “how to be a bankable”, in cooperation with the Egyptian Banking Institute (EBI), under the supervision of the CBE.
She added that the fifth aspect in the United Bank’s plan to support SMEs is represented in holding financing partnership agreements with a group of granting parties. El Kashmiri pointed out that the bank has signed several agreements of this kind, including one with the SMEs Development Authority (SMEDA).
“The United Bank grants these funds in accordance with the rules of grants and funding of the CBE, whether in traditional ways or those in accordance with Sharia rulings. They are allocated for supporting a broad sector of young people and women in the country,” El Kashmiri said.
She added that the bank has put forward specialised work programmes for funding SMEs to serve a broad segment of clients with their different activities. These activities were divided into five specialised fields. They are for the environment, supplies, distributors, projects, and transporters.
Kashmiri stressed that the bank aims to increase the number of benefitters of the funding programmes for the sector of SMEs and micro enterprises in order to achieve financial inclusion, which is based on including Egyptians in financial and banking services.
She pointed out that developing SMEs has become Egypt’s hope and a real demand in order to serve several economic issues. She pointed out that the efforts made by the CBE and the concerned authorities to put forward specific mechanisms on the managerial, economic and legal levels help achieve the desired target, which is to improve citizens’ living conditions.
Kashmiri said that the national awareness and dissemination of the culture of self-employment, especially in young people, is a pillar for the growth of the sector and a means of maximizing its performance in the national economy.
The United Bank has recently received a high-level delegation from Thailand to review the experience of the bank in financing the SME sector, which was recommended by SMEDA.
According to El Kady, Thailand has many practical and theoretical experience in the field of developing and supporting SMEs, which helped it in occupying a distinguished place in the world.
El Kady stressed the importance of utilising international experiences and expertise in supporting SMEs, noting that Thailand is country with great experience in training all segments of society to turn them into qualified labourers with international certificates in different fields, whether technical, marketing, service, or accounting.