2nd AfDB Line of Credit to the National Bank of Egypt
Tunis, 12 October 2005 – The Board of Directors of the African Development Bank (ADB) approved in Tunis on Tuesday a loan of 200 million dollars to the National Bank of Egypt (NBE) to finance the Small and Medium Enterprises Support Project. The project comprises a line of credit of US$ 200 million and a grant of 300,000 Units of account* (US$ 435,000).
The project will support the government’s efforts of promoting economic growth and poverty alleviation in Egypt through the development of SMEs, which represent more than 97% of the country’s private establishments in the non-agricultural sector and contribute two thirds to the labour force.
More than 200 SMEs in manufacturing, tourism, construction and services sectors are expected to benefit from the project, contributing to the economy’s objectives of increased output, new jobs creation and increased foreign exchange earnings. Secondary beneficiaries will be new employees to be recruited by the primary beneficiaries, the participants in the local economies where the enterprises are located, as well as other firms providing inputs and services to the primary beneficiaries.
The US$ 435,000 grant will provide institutional strengthening benefits to NBE. Apart from the development of a new comprehensive SME Credit Policy and an automated credit scoring system for SME loans, up to 500 staff of NBE are expected to benefit from the specialized SME training courses that will be provided under the program.
NBE will be authorized to finance sub-loans up to US$ 2 million without seeking prior approval from the ADB, while sub-loans above this threshold will be financed after prior ADB authorization. Up to 50% of the loan amount would be available for utilization under the free limit.
The Bank Group’s operations in Egypt started in 1974. To date, the Group has committed a total of US$ 1.8 billion Euro on 52 operations in the country.
- Estimated start-up date and duration: December 2005 for a period of four years
- Executing Agency: National Bank of Egypt (NBE), 1187 Corniche El Nil, P.O. Box 11611, Cairo, Tel: 202 5749101, Fax: 202 5762672, E-mail: email@example.com
- Project Components: a Line of Credit of US$ 200 million for on lending to viable SME projects; a Technical Assistance component for UA 300,000
*UA 1 = US$ 1.44946 as at 01/10/2005