MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) May Loan $70m to NBK-Egypt for On-lending to Small, Medium-sized Enterprises (SMEs) in Egypt

The European Bank for Reconstruction and Development (EBRD), a multilateral investment institution headquartered in London, England, is considering extending a credit line of USD 70 million to the National Bank of Kuwait-Egypt (NBK-Egypt), a commercial bank based in Cairo, Egypt. It is anticipated that the loans under this credit line will be on-lent to small and medium-sized enterprises (SMEs) in the country. Upon approval, the transaction structure will include a senior loan of USD 50 million and a trade finance limit for “guarantees and cash advances” of USD 20 million. EBRD will also provide capacity-building “technical cooperation”[1] with the aim of assisting NBK-Egypt with the training of its employees on SME banking practices boosting the financial skills of potential borrowers.

 

EBRD invested EUR 8.9 billion (approximately USD 10.1 billion) in 377 projects in 34 countries during 2014, and as of December of that year, it reported total members’ equity of EUR 14.2 billion (approximately USD 16.1 billion). In Egypt, EBRD has provided debt finance to SMEs, financed and provided technical support to the agribusiness value chain, offered risk capital, and supported the increased use of renewable energy[2]. As of 2014, NBK-Egypt reported EGP 27.7 billion (approximately USD 3.5 billion) in total assets, a loan book of EGP 10 billion (approximately USD 1.28 billion) and deposits of EGP 22.3 billion (approximately USD 2.85 billion). As of 2015, 95 percent of the shares of the organisation are owned by the National Bank of Kuwait the remaining 5 percent are owned by 2,000 shareholders.

 

By Victor Mugo, Research Associate

 

About National Bank of Kuwait-Egypt (NBK-Egypt)

NBK-Egypt is a commercial bank that is based in Cairo, Egypt, and provides financial products and services including corporate finance, investment management, trade finance, commercial banking and residential mortgages. The organization was founded in 1980 as Al Watany Bank and was acquired by the National Bank of Kuwait, a commercial bank in Kuwait City, Kuwait in 2007. As of 2015, 95 percent of the shares of the organisation are owned by the National Bank of Kuwait the remaining 5 percent are owned by 2,000 shareholders. As of 2014, NBK-Egypt reported EGP 27.7 billion (approximately USD 3.5 billion) in total assets, a loan book of EGP 10 billion (approximately USD 1.28 billion) and deposits of EGP 22.3 billion (approximately USD 2.85 billion).

 

 

About European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and is owned by 64 countries as well as the European Investment Bank and the European Union as of 2015. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). EBRD invested EUR 8.9 billion (USD 10.1 billion) in 377 projects in 34 countries during 2014, and as of December of that year it reported total members’ equity of EUR 14.2 billion (USD 16.1 billion).

 

Sources and additional resources

 

[1] EBRD News: NBK-Egypt SME Loan

http://www.ebrd.com/cs/Satellite?c=Content&cid=1395245620141&d=Mobile&pagename=EBRD%2FContent%2FContentLayout

[2] The EBRD in Egypt, Overview

http://www.ebrd.com/where-we-are/egypt/overview.html

[3] MicroCapital Universe Profile: National Bank of Kuwait-Egypt (NBK-Egypt)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=national+bank+of+Kuwait-Egypt

[4] MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

 

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