Egypt is fighting to overcome the economic crisis issue by decreasing unemployment rates and increasing growth and development rates, according to Prime Minister Ibrahim Mehleb.
On Wednesday, during a regional conference to subsidise funding opportunities for small and medium-sized enterprises (SMEs) in Arab countries, Mehleb said the role of supervisory authorities is to fund small and medium-sized industries.
He added that SMEs represent 95% of the private sector, and 80% of employees work in these companies. They also make up to 80% of the gross national product (GNP) and 75% of exports.
Mehleb also said the government sent the documents for SMEs to the Ministry of Trade and Industry, and issued a law to organise funding, affirming the government’s interest in developing small companies.
The conference was held in the presence of representatives from the Arab Monetary Fund (AMF), The World Bank, several bank governors in Arab states, and representatives from Arab sovereign funds.
Mehleb added that the government is working hard to combine both formal and informal economies, and the social fund was affiliated to the Ministry of Trade and Industry to unify working with small projects. The government is now working on the evaluation of all obstacles facing entrepreneurship.
Governor of the Central Bank of Egypt (CBE) Hisham Ramez announced that small projects create economic movement, because of the positive growth rate and social stability they encourage. Ramez added that SMEs provide 80% of the job opportunities in a country.
He pointed out that to get funding is the biggest challenge for small industries because of their informal work.
Ramez said the CBE is planning to implement major changes for the subsidy of SMEs growth and facilitating their fund. He added that they lowered the rate of bank reserves in return for their loan wallet directed towards small projects.
He declared that the CBE ordered the establishment of small bank branches in Upper Egypt and the Nile Delta with incentives to subsidise SMEs. The bank is currently working to implement financial inclusion through offering all financial services to all banks.
Ramez also added that banks are giving thorough training to employees working in SME funding.
The International Finance Corporation’s Regional Director of MENA, Mouayed Makhlouf, announced that the SME fund is still limited and needs more effort. Banks and financial institutions have to subsidise entrepreneurs financially and technically in order that they will be ready to receive bank funds, he said.
He carried on saying that the lack of information on the SME sector in banks is one of the biggest challenges to gain funding and help achieve growth. The International Finance Corporation is helping Egypt to overcome these obstacles.
The Director General Chairman of the Board of AMF, Abdulrahman Bin Abdullah, said the conference is an opportunity to solve obstacles standing against the growth of SMEs. He added that it was also a chance for them to be part of the growth of Arab economies.
Abdullah said that Arab economies are facing increasing youth unemployment rates, which stand in the way of economic policy makers to facilitate procedures of funding for SMEs.