Unlocking Egypt's SME potential will take time
Subject Nurturing SME growth in Egypt. Significance Financing and supporting small and medium-sized enterprises (SMEs) has emerged as a key priority for Egyptian policymakers. With the sector accounting for 80% of both GDP and formal jobs, a number of government institutions are reinforcing their support through financing and focus. External players, from development institutions to venture capital and private equity, are also looking to play a role. However, the sector faces numerous operational constraints that, if left unaddressed, threaten to inhibit its growth and its potential for job creation, reduce fiscal pressures and stimulate private sector growth. Impacts Easing constraints on bank lending will help tackle SMEs' financing problems. SME growth could provide a much-needed improvement in the sourcing of fiscal revenues. SME financing is often targeted at rural areas and disenfranchised populations such as women, helping the fight against poverty. SME growth will be a key component of the broader economic recovery the government is seeking to shore up political stability.