MSMEDA expects $200m, €107m funds to be reinjected into micro, small projects

Hossam Mounir
9 Min Read

The Micro, Small, and Medium Enterprise Development Agency (MSMEDA) is anticipating $200m and €107m worth deals to enter into force within the next few days, to be reinjected into micro and small projects, with the support of the Ministry of Investment and International Cooperation, according to Nevine Gamea, the executive director of the agency.

Those funding deals include a $200m deal signed with the World Bank previously. This deal is pending the president’s approval to enter into force, Gamea told the Daily News Egypt.

There is also a €50m deal with the Agence Française de Développement (AFD), which was signed during the French President Emmanuel Macron’s latest visit to Egypt, she added, noting that it will be fully allocated to fund women-owned projects. Additionally, a deal of €30 was signed with the German development bank KfW to fund small projects.

MSMEDA will also cooperate with the European Union (EU) to fund youth projects in 11 governorates in order to eliminate illegal migration phenomenon, besides another deal with the International Organization for Migration (IOM) to execute local development initiatives as part of Egypt’s efforts to achieve the sustainable development by 2030.

The agency decided to direct the first batch of international funds to small projects in Assiut governorate, being one of the neediest governorates in Egypt from which comes the highest share of illegal migrants.

MSMEDA will collaborate with local municipalities to determine the needs of every area and suggest new projects to be funded by the agency.

In the same context, the agency injected EGP 5.3bn to fund 247,000 micro and small enterprises that secured 395,000 jobs in 2018, Gamea said, adding that it also allocated EGP 2.27bn to fund 16,900 small enterprises, which provided 49,100 jobs, while EGP 3bn worth funds were directed to finance 229,700 micro enterprises that secured 346,100 jobs.

The agency also offered EGP 1.3bn for 12,900 small enterprises through intermediaries, while it directly funded 4,041 projects with EGP 970m. 

“Upper Egypt accounted for 50% of micro and small enterprises funding in 2018, while the Nile Delta area received 33%, with 12% for the urban areas and 5% for border cities,” Gamea told Daily News Egypt. She pointed out that 58% of funding was directed to the trade sector, while the service sector and livestock industries received 16% each, 8% for industrial sector, and 2% for the self-employment sector.

Women-owned micro and small enterprises accounted for 49% of the agency’s funds in 2018. Women also represent 40% of the participants of fairs held by MSMEDA, according to Gamea. She added that 23% of the agency’s services provided by its single-window system nationwide benefited women. As for the women’s shares in marketing services and different training programmes provided by the agency, they reached 32% and 65% respectively.

She pointed out that the agency deals with about 450 civil organisations across the country, in addition to 18 banks, in order to ensure that it reaches out its target segments, most prominently youth, women, and the neediest citizens. 

Gamea revealed that an agreement with QNB Al Ahli will be signed within a few days. The agreement is worth EGP 100m provided by the agency to the bank to re-inject them into small projects. The agency has also approved to provide a financial leasing company a loan worth EGP 15m. 

She also revealed that the agency plans to establish several companies specialised in the sectors of micro funding, financial leasing, and insurance.

Gamea expects the agency to achieve a growth of over 15% in 2019, supported by entering some initiatives, such as converting cars to run on natural gas and industrial complexes, in cooperation with the Industrial Development Authority (IDA), in addition to funding workshops at the Damietta furniture city.

Earlier, the agency signed two contracts worth EGP 20m with Car Gas and Gastec with the aim of converting 4,000 cars to run on natural gas.

According to Gamea, these contracts come within the framework of the initiative “Towards Natural Gas” which was launched by the agency and the Ministry of Petroleum, contributing to the national project to convert cars to run on dual fuel and implementing the state’s strategy to rationalise the energy consumption.

Over the past few years, Gastec and Car Gas have been funding the fuel conversion project in cooperation with MSMEDA through providing facilitated loans for car owners with the least interest and longest repayment period. Cars are converted at stations of both companies using the latest technologies in the field.

The initiative aims to convert 10,000 cars to run on natural gas and open 50 motor oil outlets with a total funding of EGP 100m, which would provide many jobs across the country.

Gamea added that MSMEDA has funded converting 30,500 cars to run on natural gas, including 25,500 taxis and 5,000 private cars, with EGP 152m.

Egypt’s prime minister issued in November 2018 a decision to transfer the affiliation of MSMEDA to the cabinet rather than the Ministry of Trade and Industry, as well as restructuring the agency’s board of directors.

According to Gamea, the first meeting of the agency’s new board of directors was held on 7 February 2019, as several agreements signed by the agency were passed. Additionally, a new work strategy for the agency was discussed.

Gamea pointed out that a committee was formed to study the work strategy of the agency, in a way that suits the state’s 2030 Vision. This committee would include the Minister of Planning, Hala El Saeed, and two experienced experts. Gamea pointed out that the committee’s meeting will be held within a few days.

In a related context, Gamea revealed that the cabinet will soon announce approving the micro and SME law and will refer it to the parliament for discussion and approval.

She explained that the agency has completed preparing this law nearly a year ago. It was discussed by the legislative committee of the Ministry of Justice and then forwarded to the cabinet.

She pointed out that the law issuance took a long time due to the change of the agency’s affiliation, which required amending some articles in the draft law.

According to Gamea, the draft law includes a wide range of incentives that would facilitate the required measures for individuals who want to establish projects and encourage existing project owners in the informal sector to enter the formal sector.

This includes some tax incentives, in addition to other incentives related to technical training and facilitating institutional measures, in addition to incentives that ensure that those who want to establish projects have high success chances for their projects.

The new draft law would also allow the agency to fund medium enterprises, as the old law No. 141 for 2004 did not include medium enterprises and limit the work of agency to funding micro and small enterprises.


MSMEDA injected EGP 5.3bn to fund 247,000 micro-small enterprises in 2018, of which 49% owned by women

We target achieving a 15% growth in 2019, through initiatives, such as converting cars to run on natural gas, funding industrial zones, and Damietta for Furniture

We intend to establish investment arms in the sectors of microfinance, finance leasing, and insurance

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