Context
Despite their substantial economic value, Egypt’s SMEs face many challenges, including legal and regulatory issues, slow technology adoption, an insufficiently skilled workforce and poor financing options. The lack of access to suitable financial products is hindering SME growth and expansion. Only about half of all SMEs have a banking relationship and only one in five has access to credit. Securing formal financing often requires SMEs to undergo long and tedious procedures.
Despite their considerable potential, SMEs have virtually no interaction with non-bank financial institutions (NBFIs) that offer services such as leasing, factoring, equity finance or insurance.
Following the global financial crisis and the sharp decline in conventional lending that went with it, many governments around the world now recognise the opportunities for innovation and growth afforded by financial services outside the traditional spectrum. Building on this, PAFSME focuses on promoting non-bank financial institutions and their services for SMEs in Egypt.
In collaboration with the Central bank of Egypt, a strategy to improve banking supervision and regulation as well as financial stability and inclusion is being developed.
Objective
SMEs in Egypt are benefiting from the improved access to services by non-bank financial institutions (NBFIs) that promote financial inclusion and improve stability.
