Micro, small, and medium enterprises (MSMEs) are the backbone of Egypt’s economy, playing a pivotal role in driving growth, creating jobs, and fostering innovation. With around 2 million MSMEs operating across various sectors, these enterprises contribute significantly to employment and gross domestic product (GDP).

However, despite their economic role, MSMEs in Egypt face persistent challenges in accessing finance, which hampers their potential for expansion and competitiveness.

In recent years, the Egyptian government, financial institutions, and international organizations have increasingly acknowledged the need to support MSMEs by enhancing access to credit and offering specialized financial services. This Factsheet explores the MSME financing landscape in Egypt during the second quarter (Q2) of 2024.

• In Q2 2024, financing provided to MSMEs by different financial institutionsjumped to EGP 65.2 billion, marking a remarkable 4% year-on-year (YoY) increase. However, the number of beneficiaries from this finance dropped by 2.3% YoY to 3.8 million.
• Around 1.63 million, or 43.2%, of MSMEs beneficiaries were males, receiving EGP 29.9 billion in financing. On the other hand, female beneficiaries accounted for 56.7% of the total, receiving EGP 26.3 billion.
• The commercial sector had the lion’s share of MSME financing in Q2 2024, with 58.2% or EGP 32.7 billion provided for 2.3 million beneficiaries. Around 660,000 MSMEs in the agriculture sector secured EGP 12 billion in financing, while 529,3000 MSMEs in the services sectors received EGP 7.8 billion. Productive and handicraft activities received EGP 3.7 billion for 238,500 businesses.
• The number of financial institutions serving MSMEs in Egypt reached 1,024, with a total of 3,255 branches.
• Financial services providers are classified into four categories:companies, class A non-government organizations (NGOs), class B NGOs, and class C NGOs.
• Companies provided financial facilities worth EGP 36.3 billion to 1.9 million beneficiaries, while class A NGOs provided EGP 18.5 billion to 1.7 million beneficiaries. Class B NGOs served 60,000 beneficiaries withEGP 634 million, while class C NGOs provided EGP 771 million to 152,000 beneficiaries.
• The size of nano-finance sharply declined by 98.4% in Q2 2024 to EGP 130,000, compared to EGP 7.8 million a year earlier.
• As part of its strategic plan for 2024-2030, the Egyptian government targets to direct 25% of credit facilities to MSMEs owned by youth. In addition, the government seeks to promote MSME activities to create around 900,000 job opportunities for youth to maintain a sustainable level of unemployment.

By: Amina Hussein

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