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IFC has signed a partnership with Al Baraka Bank Egypt to increase access to finance for micro-, small- and medium-sized enterprises (MSMEs) in Egypt, including women-owned businesses, helping catalyze economic activity and job creation in the country.
The partnership signing ceremony took place on December 4th, 2023.
Despite the important contribution that MSMEs make to Egypt’s economic development, many face challenges accessing finance in the country, where the lending gap is estimated at $71 billion, hindering the sector’s growth.
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets.
IFC’s USD 50 Million Murabaha Finance to Al Baraka Bank Egypt will allow the bank to increase financing to thousands of small and medium businesses in Egypt across sectors including tech, transport, communications, health, and others, with at least 25 percent of the lending earmarked for women-owned SMEs, which often struggle to access financing.
“We are committed to supporting our customers address environment and social issues, in line with international best practices,” said Hazem Hegazy, Al Baraka Bank Egypt’s Chief Executive Officer and Vice Chairman. “This program is in line with Al Baraka Bank Egypt’s board direction to develop and implement environmental and social management systems (ESMS) through Sharia-compliant financing solutions. We are proud to partner with IFC for the second time this year, following the signing of the Global Trade Finance Program to support Al Baraka Bank Egypt’s customers export trade finance business.”
“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. “By supporting women-owned small businesses, we are not only empowering entrepreneurs and their families, but we are also investing in the future of Egypt’s economy.”
As part of the project, IFC will also provide support to help Al Baraka Bank Egypt develop and implement an environmental and social (E&S) management system, enabling it to apply E&S requirements to its portfolio. This includes screening transactions against environmental and other legal and social regulations.
The project aligns with the World Bank Group’s Country Partnership Framework for Egypt, which seeks to support more and better private sector jobs in the country, among other objectives.
IFC has an investment portfolio in Egypt amounting to nearly $1.7 billion and an active advisory portfolio of $32 million. IFC supports Egypt’s private sector in key areas such as access to finance, fintech, climate finance, manufacturing, infrastructure and renewable energy, healthcare, and gender inclusion.
Al Baraka Bank is one of the pioneers of Islamic banking in Egypt, offering a wide range of services and financial products to all its clients where they are served by more than 1200 highly qualified and skilled employees to provide the best banking and products to serve more than 160,000 Customers. The bank was awarded as fastest growing Islamic bank and Best Islamic Bank for 2023 by several international business magazines and institutions.
Al Baraka Bank has been operating in Egypt for almost 40 years; and it currently has a network of 35 branches covering Cairo, Alexandria, and Delta, the Bank aims to have a geographical expansion by increasing the number of branches in most governorates of the Republic by the end of 2025.
