IFC Partners with Al Baraka Bank Egypt to Support SMEs in Egypt

In order to help catalyse economic activity and job creation in the country, the International Finance Corporation (IFC), one of the members of World Bank Group, has announced 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.

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’s $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% of the lending earmarked for women-owned SMEs, which often struggle to access financing.  

Hazem Hegazy, Al Baraka Bank Egypt’s Chief Executive Officer and Vice Chairman, said that they were committed to supporting the bank’s customers address environment and social issues, in line with international best practices.

“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,” he said.

Cheick-Oumar Sylla, IFC’s Regional Director for North Africa and the Horn of Africa, also said that with increased access to finance, MSMEs can grow their businesses, create more and better jobs, and build stronger communities.

“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,” Oumer Sylla added.

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.

About IFC

IFC is the largest global development institution focused on the private sector in emerging markets and works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.

About Al Baraka Bank Egypt

Al Baraka Bank Egypt is one of the banking subsidiaries of Al Baraka Group that takes Bahrain as its headquarters. The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 3 continents (14 countries), which in turn provide their services in more than over 600 branches.

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 has been operating in Egypt for almost 40 years; and 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 Egypt by the end of 2025.