Egypt’s bank financing to small enterprises reaches $5.8 billion

Tarek El-Kholy, Deputy Governor of the Central Bank of Egypt (CBE), said bank financing to small enterprises has reached around $5.8 billion, while combined bank and non-bank financing for microenterprises has exceeded $2.1 billion.

Of the microenterprise financing total, around $634 million comes directly from banks, while approximately $1.3 billion is provided indirectly through banks to entities, associations and companies that extend financing to microenterprises.

El-Kholy described micro, small and medium-sized enterprises (MSMEs) as a key pillar of Egypt’s economy and a major source of employment.

Egypt has around 3.858 million MSMEs, representing 99.3% of all enterprises and providing approximately 12.5 million jobs, or 82% of total employment, he said.

El-Kholy made the remarks in a speech at the CERISE+SPTF Global Meeting 2026, hosted by the Egyptian Federation for MSME Finance from September 29 to October 1, with participation from the CBE, the Financial Regulatory Authority (FRA), and international and local institutions.

Microenterprises account for around 80% of Egypt’s MSMEs, compared with 19% for small enterprises and 0.7% for medium-sized businesses, according to the 2022/2023 economic census issued by CAPMAS.

El-Kholy said the sector’s growing role in employment has coincided with a decline in Egypt’s unemployment rate from around 9% to 6%, highlighting the importance of supporting businesses as they grow and create jobs.

The MSME financing portfolio grew by around 409% between 2015 and June 2026, while the microfinance portfolio, including bank and non-bank financing, increased by more than 1,570% between 2016 and June 2026.

The microfinance portfolio now exceeds $2.1 billion and serves more than 3.9 million clients, El-Kholy said.

The CBE required banks in 2016 to allocate 20% of their credit portfolios to MSMEs. The requirement was raised to 25% in 2021, including a 10% allocation for small enterprises.

El-Kholy said banks were given time to adjust their portfolios before penalties were applied to institutions that failed to meet the requirements.

Women-owned or women-managed businesses account for around 24% of MSMEs receiving bank financing, while women represent approximately 53% of clients served by non-bank microfinance providers.

El-Kholy also pointed to low default rates among women-managed enterprises, saying rates approached zero in some cases.

The CBE’s NilePreneurs initiative provides financial and non-financial support through 140 business development centers across 25 governorates.

The centers have delivered around 1.3 million advisory and non-financial services to approximately 589,000 beneficiaries, 41% of whom are women, while helping facilitate nearly $461 million in financing.

The CBE’s strategy also aims to help informal businesses gradually enter the formal economy and access financial institutions.

El-Kholy said the central bank has developed mechanisms that allow businesses without approved budgets or financial statements to access financing based on their activity, business behaviour and repayment capacity.

These mechanisms can help businesses develop financial statements, maintain proper accounts and build financial and credit histories, allowing them to access a wider range of services and incentives available to formal businesses.

El-Kholy said cooperation between the CBE, the FRA and the Egyptian Federation for MSME Finance has supported the development of the sector.

He said 36 associations were upgraded from Category C to Category B through a CBE-sponsored institutional upgrading program between 2021 and 2026.

Drawing on nearly a decade of experience in the sector, El-Kholy said microfinance default rates were significantly lower than those recorded in several other financing activities, contributing to growing interest from banks.

He added that financial inclusion and financial stability should be pursued together, with wider access to finance accompanied by customer protection, better service quality and support for the growth and sustainability of smaller businesses.