News Details

MSMEs will have an Easier Time Getting Bank Finance

23/02/2021

  • Banks are now required to increase micro, small and medium enterprises’ share of their loan portfolios by five percentage points to 25%. The move is expected to translate into an extra EGP 117bn in funding for 120k MSMEs by the end of 2022. Small enterprises alone will be allocated 10% of banks’ lending portfolios — or around EGP 55 bn. Banks will be required to set a plan to achieve these levels of funding distribution, and report their progress on a quarterly basis. The directive is part of the CBE’s financial inclusion strategy, launched in 2019, which outlines SME support as one of its key pillars.
  • MSMEs’ credit scores will also be evaluated and assigned using behavioral scoring models, rather than financial statements, under the CBE’s instructions.  This model can only be used for businesses whose total annual sales are less than EGP 20mn. Loans should also only be provided in EGP. (Enterprise)

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