IFC has recently partnered with Al Baraka Bank Egypt to increase access to finance for micro, small, and medium-sized enterprises (MSMEs) in Egypt, including women-owned businesses, thereby catalyzing economic activity and job creation. The partnership was officially signed on December 4th, 2023.
The International Finance Corporation (IFC), a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.
Despite the significant contribution that MSMEs make to Egypt’s economic development, many face difficulties in obtaining financing in the country, where the lending gap is estimated to be $71 billion, impeding the sector’s growth.
The IFC’s USD 50 million Murabaha Finance to Al Baraka Bank Egypt will allow the bank to increase financing to thousands of Egyptian small and medium businesses in sectors such as technology, transportation, communications, health, and others, with at least 25% of the lending earmarked for women-owned SMEs, which frequently struggle to access financing.
As part of the project, IFC will also assist Al Baraka Bank Egypt in developing and implementing an environmental and social (E&S) management system that will allow it to apply E&S requirements to its portfolio. This includes screening transactions for compliance with environmental, legal, and social regulations.
The project is consistent with the World Bank Group’s Country Partnership Framework for Egypt, which aims to support more and better private-sector jobs in the country, among other goals.
IFC has a nearly $1.7 billion investment portfolio in Egypt, as well as a $32 million active advisory portfolio. The IFC assists Egypt’s private sector in critical areas such as finance, fintech, climate finance, manufacturing, infrastructure and renewable energy, healthcare, and gender inclusion.
On the other hand, Al Baraka Bank is one of Egypt’s pioneers of Islamic banking, providing a wide range of services and financial products to all of its clients and employing over 1200 highly qualified and skilled employees to provide the best banking and products to over 160,000 customers. Several international business magazines and institutions named the bank the fastest-growing Islamic bank and the Best Islamic Bank for 2023.
Al Baraka Bank has been in operation in Egypt for nearly 40 years, with a network of 35 branches covering Cairo, Alexandria, and Delta. The bank aims to expand geographically by increasing the number of branches in most governorates of the Republic by the end of 2025.
