The National Bank of Egypt’s (NBE) total loan portfolio of small- and medium-sized enterprises (SMEs) and micro-enterprises reached more than EGP 27bn and 51,000 projects by the end of October.
Chairperson of NBE Hisham Okasha stated that in June 2011, the bank’s portfolio had reached only EGP 6bn, and EGP 18bn in June 2015.
Okasha revealed that the bank aims to expand the portfolio to EGP 72bn within the next four years.
“During the first four months of fiscal year (FY) 2016/2017, NBE managed to achieve a leap in the field of lending SMEs, as it injected financing worth EGP 2.7bn into these projects with a 30% increase compared to the same period in FY 2015/2016,” Okasha said.
He explained that about 6,000 projects benefitted from the financing, with a monthly average of 1,500 clients and 33% of total projects financed in FY 2015/2016.
“The industrial sector’s share increased to 19% by the end of October out of the bank’s total SMEs portfolio, while it used to be 15%. The share of the industrial, agricultural, services, and contracting sectors reached 60% of the portfolio,” Okasha added.
Regarding the bank’s role in the implementation of the initiative launched by the Central Bank of Egypt (CBE), Okasha said that the NBE continues to implement its expansion plan, whether in terms of the number of projects financed, or the facilitations provided to them.
He explained that the total number of projects financed over the first nine months since the initiative’s launch is 7,000, with a monthly average of 780 clients, whereas the value of facilities provided to them reached EGP 5.2bn, with a monthly average of EGP 600m.
These projects are given payment terms of seven years, which can be extended to 10 years for industrial activities, with a decreasing return of 5%.
“77% of the number of projects benefitting from the initiative have obtained loans with the goal of expanding their existing activities, with loans representing 85% out of the total number of loans provided, compared to 23% to newly established projects,” Okasha explained.
He went on to explain that the number of clients benefitting from the initiative in the industrial, agricultural, and services fields reached 28% of the total number of customers, acquiring 41% of the value of financing. He noted that the bank has attracted large transactions from new customers, which means that it succeeded in achieving financial inclusion through attracting new segments that have never dealt with banks before.
According to Okasha, governorates of Upper Egypt have obtained the lion’s share in terms of the number of clients benefitting from the initiative and the finances provided, where the share reached 39% of the total number of customers, and 26% of the value of financing. Lower Egypt followed Upper Egypt with 26% out of the total number of clients, and 28% of the value of financing, followed by the canal governorates by 14% and 12% in number and value respectively.
Okasha noted that the NBE is implementing a modern methodology to simplify the procedures of financing these projects, depending on a professional staff.