Between September 2011 and September 2016, the FSVC executed over 70 projects through a U.S. Department of State Middle East Partnership Initiative (MEPI) grant to improve SME access to finance in Egypt. The program achieved this target through three complimentary objectives, namely improving the technical capacity of banks and non-bank financial institutions (NBFIs) to finance MSMEs, designing of MSME financial and business skills curricula and training of local trainers and strengthening policy dialogue on SME access to finance.
The MEPI-funded program worked towards facilitating SME access to finance through extension of technical assistance at the supply and demand levels – financial institutions and MSMEs as recipients of finance – as well as efforts to improve the macro financial ecosystem within which MSMEs operate. At the supply level, FSVC delivered consultations and training programs to the SME lending staff of banks, NBFIs and micro finance institutions (MFIs) to build their capacities on SME appraisal and risk management techniques and to streamline SME credit approval processes. At the demand level, FSVC worked towards designing MSME financial skills curricula and training of local trainers to deliver the relevant content – with the aim of improving MSME’s readiness to successfully approach financial institutions for both conventional and alternative finance sources. At the macro level, FSVC supported financial institutions and SME business associations in addressing bottlenecks in the SME lending ecosystem through the organization of roundtables to develop policy papers aimed at streamlining the legal and regulatory aspects of the SME financial ecosystem. The FSVC also worked with the Central Bank of Egypt (CBE) to enhance policy parameters and banking supervision practices in a manner that promotes access to finance for SMEs.
Program Impact
- FSVC delivered training and capacity building programs based on international best practices and standards to a total of 429 bankers, private equity and VC practitioners, and the staff of local organizations that provide financial and technical support to SMEs. The training program topics covered a variety of SME lending best practices and risk management techniques with regard to debt finance, equity finance and leasing.
- FSVC supported the Egyptian Social Fund for Development in establishing a Gender Unit specialized in supporting women-owned businesses and entrepreneurs. The Gender Unit disbursed US$33 million in funds to over 2,500 women-owned small enterprises, and over US$43 million to over 75,000 women-owned micro-enterprises in the year following FSVC’s technical assistance.
- FSVC helped build the capacity of Egyptian leasing professionals on how to train MSMEs in soliciting and repaying operating lease finance. An estimate of 248 MSMEs succeeded in gaining access to lease finance as a result of FSVC’s capacity-building assistance.
- FSVC developed financial skills curricula to help business associations and NGOs to train their MSME members on international best practices in operating their businesses efficiently from a financial and operational perspective. A total of 28 modules were developed covering a variety of financial literacy topics, e-marketing and lease finance. FSVC delivered train-the-trainers programs to build select counterparts’ capacities to deliver business management skills curricula to local MSME owners and staff. This resulted in the dissemination of FSVC-devised curriculum content to over 300 MSMEs in the year following FSVC’s technical assistance.
- FSVC’s technical assistance supported the Central Bank of Egypt’s (CBE) Banking Supervision Unit in the modification of the examination tools it uses to assess the compliance of banks with Corporate Governance regulations. In terms of improving the enabling environment for MSME access to alternative finance, FSVC supported the implementation of simpler regulations for listing on NILEX, the SME stock exchange, resulting in the listing of 8 new SMEs in the year following FSVC’s technical assistance. Additionally, FSVC promoted dialogue and cooperation between banks and PE firms to encourage joint promotion of SMEs’ access to finance through organizing a public-private roundtable with the Egyptian Banking Institute, Egyptian Private Equity Association and Egyptian Credit and Risk Association. FSVC also organized a roundtable to facilitate public-private dialogue on SME access to finance, by helping PE and VC firms devise a plan and working paper to advocate the government for a more favorable equity finance ecosystem for SMEs.