News and more

Keep Updated On The Progress

News and more

Keep Updated On The Progress

Tuesday, 22 December 2020 Sector(s) : SMEs & Entrepreneurship

Ministry of International Cooperation 2020 Annual Report |The Power of ‘Small’: Through COVID-19 & Beyond

Micro, small and medium-sized enterprises (MSMEs) are considered the backbone of local and global businesses. By supporting MSMEs to capitalize on opportunities and overcome challenges, Egypt has become a startup hub in the region.

The Ministry of International Cooperation’s 2020 Annual Report “International Partnerships for Sustainable Development” showcased how the COVID-19 drove SMEs to thinking outside the box in trying times. In light of COVID-19, the private sector globally, including MSMEs and start-ups, suffered due to the measures taken to flatten the health curve through lockdowns and remote-working. This year, supporting SMEs came through with strengthening their resilience, going digital and enabling businesses to become more sustainable and competitive. In 2020, the Ministry of International Cooperation secured a total development financing worth $457 million to MSMEs through the OPEC Fund for International Development, the Arab Fund for Economic & Social Development (AFESD), World Bank, African Development Bank (AfDB) and Germany. With development financing from the aforementioned development partners, support and job opportunities were given to marginalized groups including women, low-income women workers, small farmers, fishermen and small entrepreneurship projects. Due to the challenges that came from COVID-19, the European Bank for Reconstruction and Development (EBRD) provided a swift response within its “Solidarity Package” with the mobilization of substantial loan agreements reaching $850 million with local banks for on-lending to domestic enterprises and to support trade transactions. The funding came as a response to the Multi-Stakeholder Platform that the Ministry of International Cooperation convened in April 2020. Financing for SMEs also came through with commercial banks. The European Investment Bank (EIB) has provided nearly $1.9 billion to local banks in support of SMEs, including $109 million for Banque du Caire, $952 million for the National Bank of Egypt, and $893 million for Banque Misr in addition to contributing to the financing of the Lorax Fund with an amount of $22 million. Many SMEs in Egypt are part of the informal sector. The pandemic revealed from early on the vulnerability of informal sector workers who are neither visible in social protection programs nor protected by formal sector employment. H.E. Dr. Rania A. Al-Mashat, the Minister of International Cooperation, said that Egypt is pushing for structural reforms that include the formalization of the informal sector. The pandemic expedited this reform leading to the social protection and social safety agenda that included a monetary compensation (500 EGP) to informal workers who registered at the database of the Ministry of Manpower was provided. SMEs can often be innovative enough to find solutions for pressing problems. Various SMEs can be involved in the 17 UN SDGs, such as projects that have to do with clean water, energy, sustainable cities, zero poverty, and much more. Most notably is SDG 8: to promote employment and decent work, which is met by allowing SMEs to achieve higher levels of economic productivity through diversification, technological upgrading and innovation. SDG 8: Decent Work and Economic Growth includes 42 projects totaling $1.075 billion with a 4.2% ODA financing. According to the annual report by the Ministry of International Cooperation in 2020, the ministry secured development financing agreements worth $9.8 billion during the year; $6.7 billion for financing sovereign projects, and $3.1 billion in support of the private sector.