Cairo, November 11, 2004
–The International Finance Corporation, the private sector arm of the World Bank, today signed an advisory services mandate to assist the Export Development Bank of Egypt in developing its small business finance operations. The signing was under the patronage of H.E. the Minister of Foreign Trade and Industry, Mr. Rashid Mohamed Rashid.
The mandate will be implemented by an IFC technical assistance program known as the Private Enterprise Partnership for the Middle East and North Africa (PEP-MENA). PEP-MENA’s mandate, expected to start in December 2004 for a period of about 11 months, is to assist the Export Development Bank of Egypt in developing and implementing relevant strategy, organization, systems, and products that will help the bank reach its objectives in terms of growth and the quality of its small and medium enterprise operations. After completion of this project, the bank will be able to develop new financial packages and serve the financial needs of Egyptian small businesses using state-of-the-art credit and account management techniques and improved processes.
At the signing H.E. Mr. Rashid said,“I am very pleased with the signing of this agreement that shall provide support to the Export Development Bank in undertaking its role in developing exports, the contribution to the overall growth of the Egyptian Economy and the development of the small business sector.”
Mr. Sherif Sharaf, Chairman of the Export Development Bank of Egypt, noted: “This cooperation with IFC is in line with EDBE strategy. As a specialized commercial bank we will not only diversify our product portfolio and sources of profit but will apply international best practices in extending finance to small businesses in Egypt.”
Mr. Jesper Kjaer, General Manager of PEP-MENA, added: “In Egypt, large companies have relatively easy access to banks, but small businesses still struggle to get access to financial services. By helping banks profitably target this segment, we will help these enterprises finance their growth and become more competitive.”
Egyptian banks are increasingly realizing the opportunities available from tapping into this underserved market, since only about 6 percent of their activities are currently directed to small businesses. PEP-MENA aims at supporting this effort by advising Egyptian financial institutions on the best techniques and approaches to target this market segment.
The Export Development Bank of Egypt is a joint stock company established in 1983 with an issued capital of EGP 600 million (US$ 97.24 million), of which 24.8 percent is private, the remaining being held by leading public sector financial institutions. The bank provides full-fledged banking services with a particular focus on export promotion.
PEP-MENA is a $100 million multi donor technical assistance facility managed and co funded by IFC to support private sector development in the region, stretching from Morocco in the west as far as Pakistan in the east.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
