Abu Dhabi Islamic Bank (ADIB) Egypt is planning to expand its financing of SMEs.
In efforts to realizing this goal, it has allocated EGP 200 million to finance these projects throughout 2013, reaching EGP 400 million by the end of 2014, according to a media statement.
Following ADIB’s launch of SME products at the end of 2012, the bank has extended financing to facilities worth EGP 150 million with utilization rate exceeding 50 per cent.
Nevine Loutfy, Managing Director and CEO of ADIB-Egypt has said in a statement, that the bank’s decision to expand its financing of SMEs followed thorough studies and monitoring of the Egyptian market and its needs. The bank recognizes the growing role of this vital sector in boosting economic development and its role as a major player in job creation, accounting for more than 50% of GDP.
Ashraf Abdel Fattah, Head of SMEs at ADIB-Egypt, stated, “The bank was committed to gain a deeper understanding of the financing needs of SMEs, therefore we are now starting adopting a new financing approach for both the short and long term, which meets the needs of project owners, using the best and fastest innovative approaches.”
ADIB’s financing of SMEs comes after numerous studies that confirmed that SMEs represent 98 per cent of Egyptian companies, according to the statement.
The SME sector face two major obstacles: lack of access to financing and the long duration required to grant financing. Geographically, SMEs are distributed as follows, Greater Cairo 65 per cent, Delta and Alexandria 28 per cent and Upper Egypt, Red Sea and Sinai 7 per cent.