In a bid to finance Egyptian small and medium enterprises (SMEs), the Export-Import Bank of the United States has a pipeline of loans to Egypt with total value of $1.5bn.
The Export-Import Bank of the United State has a total loan portfolio of $100bn, providing funds to several debtor countries. The value of loans provided to Egypt does not exceed $250m, Fred Hochberg, CEO of the bank, told Daily News Egypt.
EgyptAir is the principal beneficiary of the bank’s financial support, with funds allocated to support and develop its fleet of commercial jets, Hochberg added.
The US Ex-Im Bank is an official export credit agency affiliated with the US federal government. The bank was founded in 1945 following a decision by the US congress, with the aim of financing and insuring the foreign purchase of US commodities for those parties who are unwilling or unable to accept the attendant credit risk.
The bank intends to finance projects in several sectors in Egypt including those operating with the organisational parameters of SMEs and the industries of petrochemicals, energy, aviation, medical industries, and infrastructure sectors.
“SMEs are the main leaders of development in all societies, especially in developing countries,” Hochberg explained.
He went on to explain that sustainable development will not be achieved without advances made in infrastructure, energy and transportation.
A delegation from the Ex-Im Bank concluded its visit to Egypt on Monday. During the visit, several meetings were held with representatives of the Central Bank of Egypt (CBE), the Ministry of Transportation, in addition to representatives from the public and the private sector.
Hochberg, who was party to the delegation, noted that this visit was his second to Egypt since 2011. Its goal was to expand the bank’s activities in the country, as the financial dealings between Egypt and the bank are the smallest in the Middle East region.
Hochberg said that Saudi Arabia and the Emirate states are the two principal groups with which the bank conducts business in the region.
“The bank signed a number of short-term letters of credit in Egypt, but we are looking to maximise them throughout the upcoming period,” Hochberg said.
The Ex-Im bank provides loans with interest rates ranging between 4.5% and 6.5% with a repayment term of a minimum of five years, and a maximum of 18 years. The allowances made for repayment periods vary according to a project’s sector and scope.
In terms of financing projects in the Suez Canal Area Development Project, Hochberg stated that the bank plans to coordinate with Egyptian and US companies under the parameters of existing trade departments to agree on the implementation of projects surrounding the water corridor.
He added that relations with Egypt will continue, and new visits will be planned throughout the upcoming period within the framework of the bank’s visits to countries in the Middle East and Africa.
