World Bank, Egypt sign $200m agreement to promote local economy
The World Bank and Egypt have yesterday signed an agreement to support the next generation of reforms in Egypt focused on promoting entrepreneurship and creating more job opportunities particularly for young people and women.
The US$200 million “Catalyzing Entrepreneurship for Job Creation” project is aimed at promoting entrepreneurship, combined with expanding access to finance for small and medium enterprises, which have proven to be a major source of growth and job creation.
The signing took place in Aswan and was attended by the new President of the World Bank Group, David Malpass, who was concluding a two-day working visit to Egypt. The Minister of Investment and International Cooperation Dr. Sahar Nasr, who also represents Egypt on the World Bank Board of Governors, signed on behalf of Egypt, and World Bank Country Director for Egypt, Yemen and Djibouti, Marina Wes signed on behalf of the World Bank.
‘’Entrepreneurs - and especially women - are a cornerstone for strong and stable economies,’’ said Dr. Nasr. “Our partnership with the Word Bank Group aims to empower Egyptian women and youth to become successful entrepreneurs. This is an investment that offers many opportunities to improve the livelihoods of Egyptians through job creation while contributing to a solid foundation for the country’s economy.’’
“Egypt’s strong commitment to reform is beginning to show positive results, but more efforts are needed for the benefits to reach all segments of society,’’ said Mr. Malpass. “With this new financing, we are keen to support Egypt’s second wave of reforms, which has at its heart the creation of new opportunities for young people and women, along with further progress toward sustainable and inclusive growth.”
The new project is designed to address the major obstacles that young people and women face when launching new businesses. In an economy where the financial system is dominated by banks lending primarily to mature businesses, the project will channel US$145 million mainly through non-bank financial institutions that offer loans to small businesses. This project component will have established lending targets for women and youth-led businesses, first-time borrowers, and small businesses in less developed regions across Egypt. To build up the early-stage investment ecosystem in Egypt, the project will invest US$50 million in privately managed risk capital intermediaries. The project will also fund coaching opportunities for new businesses throughout the entrepreneurial lifecycle to build the necessary skills and capacity for success.
The World Bank has a diverse package of support to Egypt focused on expanding social protection and social inclusion to all citizens, improving competitiveness and infrastructure in less developed parts of Egypt, developing a digital development strategy for the jobs of tomorrow, leveraging private sector investments for infrastructure, and supporting reforms in the education and health sector to help build human capital. The World Bank currently has a portfolio of 16 projects in Egypt with a total commitment of US$6.69 billion.