Egypt’s central bank studying plan to hedge against bank investments in SMEs
CBE studying plan to hedge against bank investments in SMEs: The Central Bank of Egypt (CBE) and its newly established Credit Guarantee Company are planning a program to help banks hedge against risks incurred by holding stakes in private equity companies and funds that invest in SMEs, CBE Sub Governor Nermine El Tahry said, according to Al Mal. The program comes after the CBE issued regulations last year allowing banks to fulfil their mandatory quota of loans to SMEs by purchasing stakes in SME-oriented investment funds. Banks are required under a CBE initiative first launched in 2015 to dedicate a portion of their loan portfolios to lend SMEs at a subsidized 5% interest rate.
A previous version of this article incorrectly cited the CBE’s Export Credit Guarantee Company.