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Egypt - Second Line of Credit to the Principal Bank for Development and Agricultural Credit (PBDAC) - Project Completion Report


The dominance which the agriculture sector once enjoyed in the Egyptian economy has declined in recent years. However, agriculture is still considered to be a very important sector in the Egyptian economy providing basic raw materials for most of the industrial development within the country. Formal and informal credit are both features of the Egyptian agriculture. Informal credit is difficult to quantify though it is the dominant form of credit in Egypt and is normally provided by relatives or wealthy individuals who have established themselves as trustworthy. Institutional credit is the second most important form of agricultural lending. However, the main constraint facing the agricultural credit sector is the lack of adequate financial resources to fund the increasing demand for credit resulting mainly from the increase of the cost of farm inputs and equipment on the one hand, and the development of new lands, on the other. Another constraint is that commercial banks have traditionally resorted to lending preferably to big businesses. This has restricted the supply of credit in the country.

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