The Small and Medium Enterprises (SME) unit was established in 2009 in collaboration with the Business Development Services Support Project (BDSSP/CIDA) in accordance with the Central Bank of Egypt to enhance and boost SMEs financing environment through providing training and technical assistance, as well as various supportive knowledge management solution activities.
The SME unit serves Egypt’s banking sector as well as small and medium business owners with an ultimate goal of bridging the gap between them. It provides a cluster of international and local training programs, researches and technical assistance services to enhance the capacity of the entire banks as well as raising the awareness of SMEs towards banking requirements and good governance. The SME Unit offers a comprehensive range of training programs for bankers and small and medium business owners through training manuals and modules, following international best practices that include simulation games and role playing.
SME Unit Strategic Objectives
- Enhance the contribution of women into access to finance
- Support the banking sector in order to establish qualified and specialized units to provide SME banking products
- Conduct various SME applied researches to acknowledge the recommending trends of new financing programs
- Exchange experiences and gain success stories of SME different models in developed and developing countries
- Provide the financial sector with the required mechanism and essential tools that enables better financing environment
- Identify the training needs of stakeholders with respect to the future prospects of the SME role in the Egyptian economy
- Establish a strong SME database to provide the required data and information to policy makers, planners, banking sector and SME entrepreneurs
- Design the required training events that include the application of international best practices of MSMEs as a major axis for sustainable development
SME Unit Activities
The SME unit provides assistance to banks in the field of SME Banking to help them set up SME banking within their operations with the necessary infrastructure and tools to facilitate the process of extending good quality lending to the SME sector.
Banks are at various stages – and in different circumstances – concerning SME banking. Some are well advanced and have access to SME banking expertise via parent banks and international networks and others are less advanced and have little support. Technical advisory services are provided either through short term or long term interventions. Short term interventions address specific problems within existing SME banking units operations while long term interventions assist banks in establishing SME banking units.
The SME Unit has presented in two Egyptian banks two models for the introduction of SME Banking: ‘Up scaling’ and ‘Down scaling’. The Down scaling model is to change from only focusing on corporate to dealing with small enterprises whereas the ‘Up scaling’ model is to graduate from micro lending to very small and small businesses lending. The models were presented by international experts in the field of SME banking through two phases: the diagnostic and implementation phase. The diagnostic phase is where the mission’s main objective is to explore the viability and requirements of establishing SME lending/ banking pilots within the bank, to better serve small and medium enterprise owners in Egypt. In this phase also, a decision is to be taken on whether the bank should follow an ‘Up scaling’ or ‘Down scaling’ model and restructure its activities according to the consultants’ recommendations and plan. The diagnostic phase is then followed by the implementation phase of the determined model.
EBI initiated a national SME census under the supervision of the Central Bank of Egypt. This is a collaborative project with the Central Agency for Public Mobilization and Statistics (CAPMAS), and the Centre of Surveys and Statistical Applications (CSSA) at the Faculty of Economics and Political Science, Cairo University. The data base was launched in February 2012 to be used by all banks in order to enhance the visibility and effectiveness of the SME sector.
The SME Web Portal has been developed to avail information on SME Banking, training programs, studies and researches as well as the data of the SME census to support banks’ planners and decision makers as well as all stakeholders of SME promising sector. You can access the portal through: http://sme.ebi.gov.eg
The SME unit delivers a diversified number of events that features international experts who share their global expertise on topics of particular relevance to the Egyptian agenda of the banking sector.
Regular meetings are conducted between banks’ SMEs unit heads, where international best practices and up-to-date issues related to SME Banking are presented. Also, among the objectives of the forum is to asses banks training needs in SME banking to set our training plan accordingly.
Regular meetings are conducted between banks’ SMEs unit heads to create an open dialogue between bankers working in the SME units in the Egyptian banking sector.
Studies: The SME Unit conducts various studies and applied researches that reflect international best practices, success stories and current status of SMEs in Egypt.
- Access to Finance: Forms of Financing for SMEs in Egypt
- Issued in 2010, the objective of this study was to further investigate the difficulties that SMEs claim having in accessing finance from banks. The research provided a preliminary insight into the supply and demand side processes related to SME bank financing in Egypt. The study was conducted in cooperation with the Egyptian German Private Sector Development Program (GTZ) and PlaNet Finance.
- The Future of SME Banking in Egypt
- Issued in 2011, the objective of this study was to assess the progress in the development of SME banking in Egypt and the debate of its contribution to moving SME banking forward. The study proposed a new approach to policy makers, outlined the policy’s main components and demonstrated how banks view SME banking in Egypt.
Applied Researches: The SME Unit publishes a series of publications by gathering information on the different successful experiences and best practices applied in various disciplines within the field of SMEs worldwide. These include:
- SMEs Experience in Malaysia
- In Malaysia, SMEs account for about 99% of total business establishments that provide employment for about 56% of the total labor force. Accordingly, it is important to shed lights on the Malaysian experience as a success story for the government’s efforts in the enhancement of such an important sector by developing a competitive, productive and resilient SME sector in order to achieve balanced economic development with higher standards.
- Financing Small and Medium Enterprises “The Indian Experience”
- The SME sector has emerged as a dynamic and vibrant sector of the Indian economy as it contributes around 40% to the entire output of India, occupies 90% of the industry and 35% of the industrial exports. The Indian economy now has a GDP growth rate about 7.2% that makes it the third-biggest economy after the United States and China. Accordingly, it is a worthy opportunity to grasp lessons learned from the Indian experience; especially that Egypt and India are considered developing countries.
The SME’s unit study tour aims at sharing and exchanging experiences of SME financing policies and procedures to support banks’ SMEs units. The study tour shares success stories and international best practices, observes the application of SME banking services and learns relevant knowledge that will reinforce participants’ capabilities within their banks. Several study tours in SME banking have been organized in developed countries such as South Africa, India, Germany, Italy, Turkey, United Kingdom and Kenya.