The European Bank for Reconstruction and Development (EBRD) allocated €1bn to finance SMEs in Egypt’s automotive sector, according to Philip ter Woort, EBRD Egypt President.
At the first forum on “Supporting SME’s in the Automotive Sector” on Monday, Ter Woort said the bank has experience in funding such sector with investments in cars manufacturing in the Mediterranean Sea region and Middle East, which amounts to €600m.
Ter Woort added that EBRD started to focus its business in Morocco, Tunisia, and Egypt since 2012. The bank invested more than €1bn in those countries, pointing out that the bank was established in 1991 and started business in Egypt in 2012.
“The automotive industry sector in Egypt faces many challenges, one of them is the lack of funding resources which is one of the bank’s priorities in this period,” ter Woort said.
Head of the feeder industries division at the Federation of Egyptian Industries (FEI) Tamer El-Shafie, said there is decrease in rates of production and competence.
El-Shafie said the lack of clarity in economic visions is one of the challenges the sector faces and the many initiatives to develop automotive industry should be sustainable.
“Factories and company owners in the automotive and feeder industries are seeking to develop the industry, as the automotive sector ranks third place in attractive growth in global reports. In addition, it is one of the growing industries that supports job creation,” El-Shafie said. “Bureaucracy is the first challenge many industries and institutions face”.
Vice Chairman of FEI Tarek Tawfik said that support of SMEs is considered key for the growth of the economy in the upcoming period.
Tawfik added said Egypt can have a strong automotive industry with a diversified economy without depending on one source for economic growth.
He said Egypt exports $25bn worth of oil therefore exports occupy a major position in the economy. FEI would use the parliament, which will take office by the end of 2015, to contribute to reform the economy in collaboration with civil society organisations (CSOs), especially since there won’t be “one party” control.