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Microfinance in Egypt


In the Darb al-Ahmar area of Cairo, artisanal traders like this furniture maker are partially responsible for the tourists that visit the area and help to increase economic activity.In the Darb al-Ahmar area of Cairo, artisanal traders like this furniture maker are partially responsible for the tourists that visit the area and help to increase economic activity.The First MicroFinance Foundation Egypt
During 2010, the First MicroFinance Foundation Egypt (FMF) sought to maintain steady growth in light of the continued latent impact of the financial crisis, while further strengthening the institution and building staff capacity. The onset of the revolution in early January 2011 caused immediate disruption to FMF’s operations in Cairo and substantial upset of clients’ businesses. In the south, the impact was felt more gradually as tourism revenues declined and the overall economy suffered. As this document went to press, FMF was seeing a gradual return to its historical levels of portfolio quality, though the loan portfolio growth was down significantly from past years.

FMF had 17,680 beneficiaries in 2010, with an outstanding loan portfolio totalling US$ 5.0 million. The proportion of women borrowers has been maintained at 45 percent.

Complementing its loans, FMF also provides non-financial services through its Business Development Services (BDS) Centre established under the Canadian International Development Agency’s Cairo Economic Livelihood Project. The BDS Centre’s goal is to provide non-financial services to microfinance clients. BDS initiatives are designed to stimulate the development and sustainability of micro, small and medium enterprises by providing the necessary knowledge, guidance and business linkages that the enterprise needs to thrive in a competitive business environment. The wide range of business development services and business consulting helps entrepreneurs lay the foundation for building a successful and rewarding business. Since its initiation in 2009, BDS has provided financial education services to 2,878 clients, out of which 56 percent are women.

There are three key activities being carried out by the BDS Centre which started in 2010:


The BDS Centre in Darb al-Ahmar is currently revising the services it offers. The new courses will include bookkeeping, business management, pricing, negotiation skills and selling. The Centre will also be offering coaching programmes, feasibility and business planning services.

One of the services being offered by FMF is a tool to address environmental challenges in Darb al-Ahmar and Manshiat Naser. Through this tool, loan officers will be able to examine the environmental state of businesses during the investigation phase. The tool focuses on creating healthy and environmentally friendly business sites. FMF plans to collaborate in 2011 with an environmental consultant to refine and pilot this tool.

In November 2010, Her Royal Highness Princess Máxima of the Netherlands, the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development, visited FMF’s Business Development Service Centre in Darb al-Ahmar. She visited the FMF operation sites and clients’ workshops and spoke to FMF’s clients about the challenges they face as well as potential strategies to overcome them. Princess Máxima also listened to the clients’ view about the impact of loans and BDS services they had received.

FMF EGYPT
Indicators
2008 2009 2010
Microfinance Loans Disbursed:
Value (US$ '000s)
8,058 9,088 10,141
Microfinance Loans Disbursed: Number 19,384 20,345 19,223
Microfinance Portfolio Outstanding:
Value (US$ '000s)
3,713 4,501 5,011
Microfinance Portfolio Outstanding: Number 17,818 18,375 17,68
Average Microfinance Loan Size
(US$ unit)
208 245 283
Percentage of Women Borrowers 45% 45% 45%
Portfolio at Risk (%) 1.9% 1.6% 2.0%
SMEDisbursed: Value (US$ ‘000) 0 127 117
SMEDisbursed: Number 0 17 17
SMEOutstanding: Value (US$ ‘000) 0 93 85
SMEOutstanding: Number 0 15 23
SMEPortfolio at Risk (%) 0% 0% 6.6%
Number of Staff 169 175 166


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AKDN in Egypt
Small and Medium Enterprises (SME)

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