Basil Rahmi, CEO of the Micro, Small and Medium Enterprises Development Agency (MSMEDA), said that the Egyptian government will continue its efforts to develop financing and technical services for small projects, and provide and facilitate various aspects of support. This step would come within the framework of implementing a comprehensive national strategy to advance economic growth rates and provide decent and sustainable job opportunities, as well as increase the volume of exports to international markets.
Rahmi mentioned this during the participation of the CEO of MSMEDA in Al Baraka Forum for Islamic Economy held in Saudi Arabia.
Rahmi explained that small enterprises in Egypt contribute about 43% to the country’s gross domestic product (GDP). They account for over 75% of the total employment in the Egyptian market, according to the latest approved statistics. He stressed that Egypt has taken great strides to provide and facilitate support for small enterprises and financing through soft mechanisms. It is also providing technical and marketing support services, to help them maintain stability, growth and expansion.
He pointed out that at the top of the steps Egypt took is the issuance of the Enterprise Development Law No. 152 of 2020. It aims to create a proper environment and legislation suitable for the growth of the small enterprise sector in Egypt. It also included many incentives and facilitations, such as the simplified tax treatment, as well as encouraging informal projects to join the formal sector.
According to the CEO of MSMEDA, many national initiatives have been launched in Egypt to support the small enterprise sector, in which all concerned parties including ministries, banks and civil institutions participated. He highlighted the coordination role played by the agency to ensure the cooperation of all competent authorities in supporting this sector.
Rahmi explained that the agency supports small enterprises of an innovative nature or that depend on modern technology to activate the role of these projects, to be an effective element in economic development and digital transformation.
He added that Egypt ranked first in the Arab countries in 2022 in the number of investment deals that took place in startups and innovative projects. The agency provides support to these companies, through the investment mechanism in the risk capital system, while launching the first government program in this framework to provide the capital required for startups amounted to $50m, funded by the World Bank, through which investments were made in 15 investment funds.
Rahmi said that the agency began applying financing with the Islamic Murabaha system, starting in 2014, until the current volume of financing reached about EGP 1.2bn from the portfolio, indicating that the agency contracted with many intermediaries specialized in financing in Islamic formulas.
Moreover, the agency completed a restricted speculation with the Islamic Development Bank in Jeddah to finance the Misr El-Kheir Foundation, with financing amounting to EGP 860m, which is a successful experience for Islamic finance in Egypt.