Central Bank of Egypt approves soft loans to small farms under SME initiative
CBE approves soft loans to small farms under SME initiative: The Central Bank of Egypt (CBE) has greenlit a request from the agriculture minister to allow small-scale growers and livestock breeders access to the SMEs lending initiative, cabinet said in a statement. The approval allows commercial banks to receive loan applications from small farms, who are now eligible to receive loans at a subsidized 5% interest rate. Banks are required under a CBE initiative first launched in 2015 to dedicate a portion of their loan portfolios to extend soft loans to SMEs.
This is different from a larger-scale industry stimulus initiative the CBE launched last year. The separate EGP 100 bn package first targeted factories with annual sales of less than EGP 1 bn. The package was later extended to cover companies of all sizes — including agriculture and agricultural production, fish, poultry, and livestock companies — who can access soft loans carrying interest rates between 5-8%.
In related SME news: The Trade Ministry’s Industrial Development Authority (IDA) and state-owned Export Development Bank (EDB) signed an MoU to help small and youth investors acquire pre-licensed workshops being built under an initiative to support SMEs, the IDA said in a statement. Interested entrepreneurs will be eligible for 10-year loans from the EDB at a declining 5% interest rate.
Background: When it first launched the initiative in 2018, the government said it aims to tender workshops and small factories in 22 industrial clusters across 14 governorates by the end of 2020. Those factories are offered to entrepreneurs at their actual construction and fitting cost, with no added margin from the government, the IDA says on its website.