By Ayat Al-Batawi
In December 2013, the board of directors of the Social Fund for Development (SFD) approved a budget of EGP 3bn for 2014 to finance development programmes of small enterprises and labour-intensive projects. Since the beginning of 2014, the Social Fund for Development has given a special attention to Egyptian youth, spending EGP 1.3bn by the end of August from its total 2014 allocation of 2bn.
The Daily News Egypt sat down with SDF Secretary General Hana El Halaly to discuss the fund’s plans in Egypt, its new financing schemes and follow up on the projects’ progress.
What is the volume of funds the Social Fund for Development plans to allocate to finance projects by the end of the year?
The Social Fund for Development eyes to allocate EGP 2bn to fund projects by the end of this year. The fund’s total financing amounted to EGP 3bn by end of last June.
Meanwhile, the fund’s loan portfolio reached EGP 3.6bn until March 2014.
In the first half of the current fiscal year, the fund has also signed 12 financing contracts with the banking sector worth EGP 1.081bn. The funds are directed at small and medium-sized enterprises.
The fund is also planning to sign new contracts whose value has not yet been settled with seven banks, including the National Bank of Egypt, Banque Misr, Housing and Development Bank, Al-Baraka Islamic Bank, United Bank, Alex Bank, and Banque du Caire.
Does the fund plan to finance small- and medium-sized enterprises?
The fund holds negotiations with foreign lenders, including Khalifa Fund, Saudi Fund for Development, and Kuwait Fund for Arab Economic Development to get $450m loans for small- and medium-sized enterprises. There are also talks with the European Union to give grants worth €30m to non-financial services and social development agencies.
The SFD also works to carry out ambitious plans to promote products of its financed small enterprises by taking part in major exhibitions to help those businesses know the market needs whether direct sales products or complementary products to major projects.
The SFD announced several new financing schemes. What are they?
The SFD plans to release new financing schemes in the second half of the current fiscal year, including cost-plus financing (Murabaha) in addition to the finance of renewable energy projects, factoring, leasing and obtaining stocks in venture capital companies.
In recent weeks, the fund has given Al-Sharqeya Association for Businessmen a loan worth EGP 2.5m and a grant of EGP 150,000. The loan is aimed at supporting women breadwinners socially and economically.
Poor and middle-income households, especially the disabled and women breadwinners, constitute a huge hurdle against social development.
These households are centralised in the country’s poorest communities with high rates of illiteracy and unemployment and low incomes. The SFD has allocated funds for associations that work with the physically challenged and female breadwinners who have a disabled husband or child.
What is the volume of Islamic cost-plus financing the fund has recently implemented?
We started to implement Islamic cost-plus financing in June 2013. The volume of the new scheme was estimated at EGP 586m by the end of the first half of the current fiscal year.