(MENAFN- Daily News Egypt) The International Finance Corporation (IFC) announced on Monday a partnership with Al Baraka bank Egypt to increase access to finance for micro-, small- and medium-sized enterprises (MSMEs) in Egypt, including women-owned businesses, helping catalyze economic activity and job creation in the country.
MSMEs play a vital role in Egypt's economic development, but they face many challenges in obtaining finance, as the lending gap is estimated at $71bn. This hampers the growth of the sector and limits its potential.
IFC provided $50m Murabaha finance to Al Baraka Bank Egypt to enable the bank to provide financing to thousands of small and medium businesses in Egypt in various sectors, such as tech, transport, communications, health, and others. At least 25% of the financing will be earmarked for women-owned SMEs, which often struggle to access finance.
Hazem Hegazy, Al Baraka Bank Egypt's CEO and Deputy Chairperson, said:“We are committed to supporting our customers to address environmental and social issues, in line with international best practices. This program is in line with Al Baraka Bank Egypt's board direction to develop and implement environmental and social management systems (ESMS) through Sharia-compliant financing solutions. We are proud to partner with IFC for the second time this year, following the signing of the Global Trade Finance Program to support Al Baraka Bank Egypt's customers export trade finance business.”
Cheick-Oumar Sylla, IFC's Regional Director for North Africa and the Horn of Africa, said:“With increased access to finance, MSMEs can grow their businesses, create more and better jobs, and build stronger communities. By supporting women-owned small businesses, we are not only empowering entrepreneurs and their families, but we are also investing in the future of Egypt's economy.”
As part of the project, IFC will also provide support to help Al Baraka Bank Egypt develop and implement an environmental and social (E&S) management system, enabling it to apply E&S requirements to its portfolio. This includes screening transactions against environmental and other legal and social regulations.
The project aligns with the World Bank Group's Country Partnership Framework for Egypt, which seeks to support more and better private sector jobs in the country, among other objectives.
IFC has an investment portfolio in Egypt amounting to nearly $1 and an active advisory portfolio of $32m. IFC supports Egypt's private sector in key areas such as access to finance, fintech, climate finance, manufacturing, infrastructure and renewable energy, healthcare, and gender inclusion.
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