Head of the parliament’s Small- and Medium-sized Enterprises (SMEs) Committee Hala Abu El-Saad revealed that the Central Bank of Egypt (CBE) has not submitted any data the committee requested on the EGP 200bn SMEs initiative since the CBE governor, Tarek Amer, was summoned in May.
Abu El-Saad said that the committee requested to be informed about details on the EGP 1.3bn loans approved out of the initiative’s finances. “We have yet to know the total amounts allocated for SMEs and the map of allocation,” she said.
President Abdel Fattah Al-Sisi launched in January an initiative in which he assigned the CBE to provide EGP 200bn to support SMEs with an interest rate of no more than 5%.
She added that the initiative clashes with the legislative structure and the laws regulating the SMEs. The banks demand requirements to grant loans, especially for the SMEs; additionally, the civil protection authority demands exhausting requirements for these projects.
She explained that, for example, it is not possible for a small workshop on an area of no more than 80m to be subject to the same requirements a factory on an area of more than 5,000m would be subject to. She said this hinders employment and exacerbates unemployment rates among young people.
Parliamentary sources, who preferred to remain anonymous, said that although CBE’s deputy governor, Gamal Negm, stressed before the parliament that he is intending to hold a meeting with the chairperson of the Egyptian Financial Supervisory Authority (EFSA), Sherif Samy, to discuss how to provide support to micro-enterprises, the meeting has yet to be held.
The sources added that there are 20 members of parliament that signed a draft law on micro-enterprises and it was submitted to the SMEs committee to study and discuss it in the next legislative term, which will begin in October.
The sources pointed out that the draft law concurrently was sent to the parliament’s Economic Affairs Committee for study. Moreover, standardised meetings will be held between the two committees over the coming month and a unified report will be submitted to the plenary for discussion.
“The initiative is still just ink on paper,” the sources said, noting that the majority of borrowers were large companies, not SMEs. “The target—employing youth to erode unemployment rates—would not be achieved this way,” they emphasised.
A number of MPs criticised the absence of a unified strategy to support SMEs and what they described as an “isolated islands policy” in dealing with the crisis as if the initiative only belongs to banks or the Ministry of Industry, as they put it.
“The issue requires cooperation among all devices, whether the legislative side of the House of Representatives, or the ministries of interior, industry, and investment,” the sources said.
Moreover, they urged the need for rising to the occasion and dealing with the problems in Egypt properly. “Nothing but job-seeking would force youth to bid their lives to the sea,” they said.
They pointed out that both of the parliament’s SMEs and economic affairs committees have received a request from the head of the Social Fund for Development, Soha Soliman, to amend Law no. 141 for 2004, which governs the fund’s operations.
They said that the cost of lending in the fund is high, which resulted in raising interest rates for micro-projects to as high as 15%.
During the inauguration ceremony for the Bashayer Al-Khair project in Alexandria, Al-Sisi said that the state supports SMEs through the provision of funding, to help young people overcome unemployment. He condemned illegal youth immigration, highlighting the state’s efforts in implementing development projects serving Egyptians. “Why would you leave Egypt?” he cried in awe.
On Wednesday, a boat en route to Europe sunk near the city of Rashid. Rescue campaigns have so far found over 170 bodies, mostly Egyptians, who attempted illegal immigration, frustrated by the living conditions and in pursuit for a better future abroad.