Egypt: Key Financial/Business Needs
Key financial/business needs for small and medium enterprises in Egypt include access to credit services and export support.
Access to Credit Services
- Access to credit is one of the key financial needs of small and medium enterprises in Egypt. Expert at the 20th annual Euromoney Conference in Egypt identified access to finance as a major obstacle to Egyptian enterprises' growth. This suggests a need for reorientation of lending strategies to make credit services accessible to SMEs in Egypt.
- According to the Middle East Institute, a "lack of access to finance has long been recognized as a key obstacle" for small and medium enterprises. This is despite the actions taken by the government and lenders which have been ineffective.
- According to Oxford Business Group, the financing gap for small and medium enterprises in developing countries such as Egypt is partly due to the difficulties that banks face in assessing the creditworthiness of these enterprises, "which can discourage lending to these firms".
- According to a 2019 Euro-Mediterranean Network for Economic Studies (EMNES) survey, found only "3.4% of businesses started out with a business loan".
- According to AFC, lending to small and medium enterprises is "underrepresented in total banking assets accounting for not more than 6% of all lending".
- The World Bank Enterprise Survey shows that Egypt's value of collateral for small and medium enterprises stands at "296-317% of the value of the loan compared to 203% MENA's regional indicator".
- According to the Journal of Islamic Financial Studies, small and medium enterprises in Egypt are "under performing when it comes to exporting".
- SMEs in Egypt, Jordan, and Bahrain represent over 95% of these countries' total private enterprises while the export share is less than 20%.
- According to Oxford Business Group, small and medium enterprises "lack the infrastructure and support mechanisms to engage in international trade". This limits their growth potential.
- An experiment done by a group of researchers in partnership with Aid to Artisan (ATA) showed an increase in profits from 16% to 26% among random Egypt "SMEs offered the opportunity to export".
- A 2018 OECD report shows that only 10-25% of industrial SMEs export their goods relative to 90% of large corporations in global trade.
- The 2016 World Trade Organization's report shows that domestic exports account for 7.6 percent of the overall revenue of small and medium enterprises in the manufacturing sector in developing countries.