Banque du Caire Chairperson and CEO Mounir El-Zahid said his bank aims to inject EGP 2bn into small and medium enterprises (SMEs) during 2016.
El-Zahid explained that the bank has been supporting these projects for more than 10 years, and the loans directed to them constitute 5% of the bank’s loans portfolio.
He added that the bank recently put into place the final structure of the sector in charge of financing these projects, and created a risk unit that began operating at the beginning of 2016.
What is the size of the SMEs loans portfolio at the bank?
SMEs outstanding finance amounts to approximately EGP 1.4bn, while total funds granted by the bank to these projects recorded EGP 7bn in recent years.
Those funds have contributed to providing roughly 700,000 job opportunities.
What is the ratio of SMEs loans out of the bank’s loans portfolio?
The total loans directed to SMEs constitute 5% out of the bank’s loans portfolio.
What is the target for 2016?
The bank aims to inject EGP 2bn as new funds into the SMEs sector in 2016.
How will the bank reach the 20% minimum rate that the Central Bank of Egypt (CBE) obliges banks to grant to SMEs out of the bank’s total loans portfolio in the next four years?
Banque du Caire has been working for more than 10 years to provide financing for SMEs, and the bank is committed to creating specialised products for these projects. The bank hopes to apply an integrated programme to facilitate the availability of financing opportunities for these projects and institutions, aligning with the CBE initiative to support SMEs, which contributes to pushing the wheel of production.
SMEs are a priority for the bank’s expansionist policy, which qualifies SMEs to be at the forefront of the banking sector.
The bank has taken several steps in this regard, based on a study of the needs and requirements of this vital sector, along with selecting qualified human resources and training them in the credit field in accordance with international standards.
How do you view the importance of the unified definition the CBE has created for these projects?
The CBE has created a unified definition of SMEs which provides complete and accurate data about the sector, contributing to increasing the size of the provided funds and facilities to them.
Does the bank have a specialised department to serve this sector?
The bank has established a department to finance SMEs, aligning with the bank’s policy to support financing these projects.
The bank recently put in place the final structure of this department, as well as establishing a SMEs risks unit.
This unit began working at the beginning of 2016, to implement the foundations for funding this sector, which differs from major corporate financing.
The bank has introduced and developed a credit competence evaluation system for the sector’s clients, so that the bank will be able to continue developing the SMEs’ finance portfolio.
Does the bank finance micro-enterprises?
Banque Du Caire has been financing micro-enterprises for more than 13 years. The bank has provided more than 100,000 job opportunities for young people and has created sustainable productivity projects.
Total loans granted to micro-enterprises were about EGP 1.3bn by the end of December 2015, and there was an 18% growth rate and 45% market share in the previous year.
What is your assessment of the initiative launched by the CBE for serving this sector?
The CBE initiative to finance SMEs is a successful step toward integrating the informal sector into a formal one, which supports national economic growth opportunities.
It is expected that the initiative will contribute to achieving financial inclusion by injecting new funds into the economy in an unprecedented manner, thus contributing to an increase in national income and the creation of more job opportunities for young people.
I’d like to point out that the cost of creating a business opportunity in SMEs has reached up to EGP 25,000, compared with EGP 150,000 in large projects. It is also faster to create business opportunities in SMEs than larger projects.
SMEs must be linked to major projects to supply them with goods and intermediate inputs. SMEs can serve as feeder industries for major projects, thus increasing these projects’ exports and raising their competitiveness.