IFC and EF-MSME signs funding agreement
The International Finance Corporation (IFC) and the Egyptian Federation for Medium, Small and Micro Enterprise Finance are partnering to improve access to finance for 41 microfinance institutions in Egypt.
The new programme launched on 5 April 2022 in Cairo and called “Institutional Upgrading Programme”, supported by the Egyptian Financial Regulatory Authority (FRA) and sponsored by the Central Bank of Egypt (CBE), aims to increase access to finance for microenterprises and thus contribute to poverty reduction – IFC.
Indeed, the International Finance Corporation and the Egyptian Federation for Medium, Small and Microenterprise Finance want, through this partnership, to promote financial inclusion in Egypt, in line with their commitment to SDG 10 “to eliminate inequalities within countries”.
“Microfinance has become an essential aspect of credit markets and an effective tool for poverty reduction and socio-economic development.” Dr Hala H. El Hadidi, Associate Professor of Economics, Department of Business Administration, British University of Egypt.
This partnership is timely because, although SMEs are a key pillar of Egypt’s economic growth, Egyptian micro, small and medium-sized enterprises suffer from a lack of easy access to the finance needed for SME start-ups – World Bank. As suggested by the African Development Bank and the World Bank, this challenge is mainly attributed to the lack of financial intermediaries that MSMEs can turn to for assistance and financing, as well as products tailored specifically to the needs of local businesses.
IFC is filling this gap to some extent and has indicated that the assistance offered by this partnership takes the form of coaching, training and mentoring of these 41 microfinance institutions in corporate governance, risk management, credit methodology, internal audits, strategic business planning and digital financial services.
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