AIBK to increase SMEs financing portfolio to EGP 5.5bn by end of 2017

Hossam Mounir
4 Min Read
Hany Seif El-Nasr, chairperson of the Arab Investment Bank (AIBK).

“The bank is considering 2017 to be the year of small- and medium-sized enterprises (SMEs),” said Hany Seif El-Nasr, chairperson of the Arab Investment Bank (AIBK).

He added that the bank has allocated EGP 2bn to finance SMEs in 2017 which would boost the size of the sector’s portfolio from EGP 3.5bn to EGP 5.5bn by the end of the year; noting that the bank’s strategy aims to increase the size of the portfolio to reach 45% of the bank’s total loans portfolio. In the same context, Seif El-Nasr mentioned that the bank’s total loans portfolio amounts to EGP 9bn, and the bank expects to raise it to EGP 12bn by the end of the year.

He also pointed out that the bank’s strategy aims to allocate 25% of this year’s finances in favour of women’s SMEs, coinciding with Egypt’s strategy of declaring 2017 the year of the woman.

He explained that the AIBK is considered an ideal destination for small enterprises as its strategy is a perfect fit for the nature of these projects; taking into consideration the size, capabilities, and infrastructure of the bank that will enable its expansion by financing them.

Seif El-Nasr noted that the initiative posed by the Central Bank of Egypt (CBE), which encourages banks to expand in financing SMEs, will push banks towards investing in this direction. In light of the specific controls to focus credit on the largest 50 customers, this will urge banks to adjust their strategies towards horizontal expansion of the number of customers and not to increase the amount of loans. This will eventually increase funding for small- and medium-sized projects. It will also generate more jobs, increase domestic production to replace imported products, and increase exports of SMEs.

Seif El-Nasr added that the bank has launched the “Shorakaa” project which represents the bank’s partnership with small business owners. This will be processed either by financing these new projects or partnering with them. He pointed out that the AIBK will be focusing on new projects that other organisations might fear for their high risk, with the goal of creating new job opportunities for young people and increasing domestic production.

Seif El-Nasr continued that as part of the AIBK’s interest in financing SMEs, it adopted a geographical expansion strategy. He highlighted that the number of branches has increased from 12 to 20 by the end of 2016. He added that five more branches will open next week, located in Al Khalifa Al-Maamoun St. in Heliopolis, City Stars Mall, Zamalek, Galleria area of ​​Sheikh Zayed at 6th of October City, and in the city of Suez to serve the whole Suez region. This brings the total number of branches to 25. Seif El-Nasr emphasised that the focus of the new branches will be financing SMEs.

He clarified that the AIBK’s business has increased by 100% in regards to customer size, amount of deposits, loan portfolio, and preliminary results of net profit. He credited the jump in business to team work, clearly identified strategic goals, and to the major development of the bank’s information system according to the latest information technology in the global banking industry. The latter was achieved with the help of one of the most reputable companies specialised in this field. Seif El-Nasr is confident that by implementing this new system and by focusing on the employees’ professional development, there will be an enormous leap in the bank’s performance and in the quality and speed of its customer services.

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