The Micro, Small, and Medium Enterprises Development Agency (MSMEDA) has provided financing worth EGP 1bn for innovative projects, through a loan agreement with the World Bank, signed in 2020 worth $200m, of which the agency obtained $50m, according to Tarek Shash, Vice Executive Director of MSMEDA.
Shash’s remarks came on the sidelines of a symposium held by the Egyptian-Lebanese Association for Businessmen, under the title “Entrepreneurship, Industry, and Youth – The Future Trilogy of the New Republic”, on Monday.
He said that MSMEDA contributed EGP 250m through its resources, bringing the total funding to EGP 1bn, which is the amount allocated by the Agency as a kind of contribution to funds working in financing innovative projects, in which the fund contributes to those projects for a period of 7 or 8 years and then exits after those projects become successful and then reaps the fruits of that financing and investment.
He added that the agency invests in these projects through those specialized funds, which we call venture capital funds, which work on evaluating the risks of these projects and aim to finance innovative companies that rarely find funding for them through traditional financing channels because they have no previous reference on which to base them on loans.
He pointed out that these types of funds do not have many resources, so they need someone to finance them, and we also aim to support them through these funds as well as with technical support.
Shash emphasized that in order to support innovative companies, it is necessary to enter this field by financing specialized funds, by studying the fund and evaluating its experience and the investments in which it intends to participate.
He explained that we have discovered a demand for such a product, as more than 20 funds have been submitted to us and we have so far approved 9 of them, and we have allocated EGP 500m to 6 funds through which they finance about 250 to 300 companies within 3 years in different sectors, including information technology, health, education, agriculture, and others.
He explained that we are heading towards pumping about EGP 5.5bn into MSMEs using them to finance 150,000 projects by the end of this year. So far, we have provided financing to nearly 90,000 companies, at a value of about EGP 3.5bn.