IFC & Al Baraka Bank Egypt to Boost MSMEs & Women Owned Businesses

The International Finance Corporation (IFC) announced a partnership with Al Baraka Bank Egypt on December 4, 2023, to increase access to finance for Egypt's micro, small, and medium-sized enterprises (MSMEs), including women-owned businesses, thereby catalyzing economic activity and job creation.

MSMEs are critical to Egypt's economic development, but they face several problems in accessing financing, with a $71 billion credit shortfall predicted. This stifles the sector's growth and restricts its possibilities.

IFC granted $50 million in Murabaha financing to Al Baraka Bank Egypt, allowing the bank to provide funding to thousands of small and medium-sized enterprises in Egypt across a variety of industries, including technology, transportation, communications, health, and others. At least 25% of the funding will go to women-owned SMEs, who generally struggle to get financing.

"We are committed to assisting our customers in addressing environmental and social issues in accordance with international best practices," stated Hazem Hegazy, CEO and Deputy Chairperson of Al Baraka Bank Egypt. This initiative is in line with the board of directors' directive to create and execute environmental and social management systems (ESMS) using Sharia-compliant finance solutions at Al Baraka Bank Egypt. We are pleased to announce our second partnership with IFC this year, after the signing of the Global Trade financing Program to help Al Baraka Bank Egypt's clients' export trade financing operations."

"With increased access to finance, MSMEs can grow their businesses, create more and better jobs, and build stronger communities," said Cheick-Oumar Sylla, IFC's Regional Director for North Africa and the Horn of Africa. We are not only empowering entrepreneurs and their families, but we are also investing in Egypt's future economy by helping women-owned small enterprises."

As part of the project, IFC will also assist Al Baraka Bank Egypt in developing and implementing an environmental and social (E&S) management system that would allow it to apply E&S regulations to its portfolio. This involves evaluating transactions for compliance with environmental, legal, and social standards.

The initiative is consistent with the World Bank Group's nation Partnership Framework for Egypt, which aims to promote more and better private-sector jobs in the nation, among other goals.

IFC has an approximately $1.7 billion investment portfolio in Egypt, as well as a $32 million active advising portfolio. The IFC assists Egypt's private sector in critical sectors such as banking, fintech, climate financing, manufacturing, infrastructure and renewable energy, healthcare, and gender inclusion.