The European Union (EU) provided loans generated by European financial institutions, which will help mobilise around €475m, according to the head of the EU delegation to Egypt, Ambassador Ivan Surkoš.
Surkoš said that the EU launched the ‘EU Facility for Inclusive Growth and Job Creation,’ which aims to put a comprehensive framework of activities aiming to improve and enable an environment for business creation and economic development and generate jobs by supporting enterprise growth and competitiveness.
“The facility from one side tackles important areas of reform from a business environment angle, such as taxation, customs compliance, financial inclusion, as well as banking supervision. From the other side it facilitates small and medium sized enterprises (SMEs) access to long-term financing and value chain financing with a focus on those value chains that have a higher growth potential such as the agribusiness,” noted Surkoš.
“To do so, we make use of the “blending” modality, for example the EU grants are combined with loans provided by European Financial Institutions, such as EBRD, EIB, KfW, so as to maximise the effect in the economy. In addition, a significant amount of EU funds will be channelled through grants to support key stakeholders in dealing with SME development and will strengthen the ecosystem for innovation among SMEs.”
He pointed out that among the EU’s initiatives is to support the development of micro, small and medium-sized enterprises (MSMEs). It has recently funded a grant call for proposals to promote the development of MSMEs in innovative ways and contribute to the creation of new enterprises, achieving innovation, improving competitiveness, productivity, and employment creation.
“Particular attention will also go to aspects of inclusiveness, growth, job creation targeting youth, and women. More specifically, the call will support projects that aim at the provision of high quality business development services, exploit the potential of entrepreneurship towards the establishment of new, high potential, and innovative start-up enterprises in the manufacturing, tourism, and other services sectors,” elaborated Surkoš.
He also added that in line with this, the EU is providing institutional support to MSMEs aiming at improving the agency’s efficiency and performance, with the final objective of improving the governmental support to the setting up and functioning of micro and small enterprises.
Moreover, the EU is supporting the strengthening of governmental entities’ capacities, mainly the Ministry of Trade and Industry and its affiliates, to design and implement more comprehensive trade, industrial development, and investment policies and strategies, which are also essential for the development of the private sector in general, and more specifically the MSMEs, he said.
Commenting on the development of SMEs, Surkoš said that a stable and predictable business environment and a vibrant private sector are essential ingredients for stability, growth, and job creation.
He said that currently, despite ongoing reforms, small business creation and growth, however employment opportunities remain hampered by widespread informality across all economic sectors, market distortions, and strong regulations. Small businesses have not yet integrated into the economy and remain clustered in low productivity sectors. Low levels of education, limited availability of skilled employees, and access to finance are other important obstacles to business creation and operation. Given the importance of SMEs as engines for inclusive growth and avenues for job creation and youth integrate into the economy, the EU is investing heavily in this sector in Egypt and regionally.
