The United States Agency for International Development’s Egypt branch (USAID/Egypt), a division of USAID aimed at supporting economic development in Egypt, and BNP Paribas, a financial services provider based in France, recently agreed to a deal that has BNP Paribas loaning EGP 27 million (USD 4.65 million) to The Lead Foundation (Lead), an Egyptian microfinance NGO that was founded in part by USAID. USAID/Egypt is guaranteeing 50 percent of the principal amount.
USAID/Egypt’s support of the agreement is part of its Micro and Small Enterprises (MSE) Development program. Since its inception in 1990, the program has supported microfinance institutions (MFIs) and organizations that primarily serve low-income, female-headed households in Egypt. MFIs supported by USAID/Egypt have reportedly extended USD 2.5 billion in loans to 3.4 million microentrepreneurs since the program’s founding.
As of September 2010, Lead had a gross loan portfolio of USD 28 million and approximately 170,000 active borrowers. During the course of the loan agreement, it is expected that Lead will expand its reach to approximately 400,000 borrowers [1,2].
By John Howard-Smith, Research Associate
About United States Agency for International Development Egypt (USAID/Egypt): Founded in 1975, United States Agency for International Development Egypt (USAID/Egypt) is a division of the United States Agency for International Development focusing on economic growth, infrastructure improvements, education, health and judicial reforms to improve the lives of Egyptian citizens. In 1990, it launched the Micro and Small Enterprises (MSE) Development program to support microfinance institutions (MFIs) and low-income, female-headed households in Egypt. MFIs supported by USAID/Egypt have extended USD 2.5 billion in loans to 3.4 million microentrepreneurs since the program’s founding.
About BNP Paribas: Resulting from the 2000 merger between two French banks, Banque Nationale de Paris (BNP) and Paribas, BNP Paribas is a financial services provider headquartered in Paris, France. The bank has operations in 84 countries and focuses on retail banking, investment banking and wealth management.
About The Lead Foundation (Lead): The Lead Foundation (Lead) is a microfinance non-governmental organization (NGO) founded in Egypt in 2003 by Egyptian individuals and the United States Agency for International Development (USAID). Lead offers microfinance services to low-income entrepreneurs, especially women. As of September 2010, Lead had an outstanding loan portfolio of USD 28 million and 190,000 active clients, of which 82 percent were women. As of 2009, Lead had USD 38.1 million in total assets, return on assets (ROA) of 6.87 percent and return on equity (ROE) of 12.44 percent.
[1] USAID/Egypt Press Release: “USAID/Egypt Partners with BNP Paribas Bank and Lead Foundation to Support Microfinance Lending in Egypt”, http://egypt.usaid.gov/en/pressreleases/Pages/bnp_lead.aspx
[2] Ahram Online: “BNP Paribas and USAID/Egypt to finance small enterpreneurs with $4.6 million loan”, http://english.ahram.org.eg/~/NewsContent/3/14/4180/Business/Markets–Companies/BNP-Paribas-and-USAIDEgypt-to-finance-small-enterp.aspx
MicroCapital.org story, November 15, 2010: “MICROCAPITAL BRIEF: Grameen Crédit Agricole, Grameen-Jameel Pan-Arab Microfinance Guarantee $6m National Société Générale Bank Loan to The Lead Foundation Egypt”, https://www.microcapital.org/microcapital-brief-grameen-credit-agricole-grameen-jameel-pan-arab-microfinance-guarantee-6m-national-societe-generale-bank-loan-to-the-lead-foundation-egypt/
MicroCapital’s Microfinance Universe profile: United States Agency for International Development Egypt (USAID/Egypt), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+States+Agency+for+International+Development+Egypt+(USAID%2FEgypt)
MicroCapital’s Microfinance Universe profile: BNP Paribas, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BNP+Paribas
MicroCapital’s Microfinance Universe profile: The Lead Foundation (Lead), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+Lead+Foundation
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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