MICROCAPITAL BRIEF: UAE’s Khalifa Fund for Enterprise Development Loans $200m to Egyptian Government for Microfinance

The Khalifa Fund for Enterprise Development (Khalifa Fund), a fund backed by the government of the emirate of Abu Dhabi, has announced that it will loan USD 200 million to the government of Egypt to fund microfinance programs in that country. It is anticipated that the funding will contribute to the creation of “100,000 projects”[1] and “120,000 job opportunities”[1] in Egypt by 2020.

Mr Hussain al Nowais, the chairman of Khalifa Fund, said that “the loan will be directed towards microfinance development in remote and disadvantaged areas and pockets of poverty throughout Egypt”[1]. He added that “it would also help Egyptian women in rural areas find work”[1].

UAE and other countries of the Gulf Cooperation Council (GCC), a political and economic union of the governments of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE, have a history of supporting the Egyptian economy. For example, UAE, Saudi Arabia and Kuwait collectively donated “USD 12 billion in aid”[2] after the removal of the government of Mohammed Morsi from power in 2013.

Khalifa Fund was established by the government of Abu Dhabi with total capital of AED 2 billion (USD 545 million) in 2007. As of December 2013, the fund’s operational portfolio included 222 projects. The fund reported net income of AED 36 million (USD 9.9 million) in 2013 during which time its projects reportedly created 2,916 new jobs.

By Alíz Crowley, Research Associate

About Khalifa Fund for Enterprise Development

Based in the United Arab Emirates (UAE), the Khalifa Fund for Enterprise Development (Khalifa Fund) was established by the government of the emirate of Abu Dhabi in 2007. The fund primarily supports small and medium-sized enterprises (SMEs) in UAE with financing as well as training, development, consulting and marketing assistance. The fund’s financing programs include the following: “Khutwa,” which offers “flexible loans” to women and retirees; “Bedaya,” which supports start-up SMEs; “Zeyada,” which supports early-stage SMEs; “Tasneea,” which supports industrial SMEs; “Zaarie,” which supports agricultural SMEs; and “Al Hasela,” which provides financial and technical support to fishermen. In collaboration with the National Bank of Abu Dhabi, the fund also offers funding for SMEs from a private equity fund called “Mubadarat.” Additionally, the fund has social programs that provide financial and non-financial support to former prison inmates, people who are recovering from addictions, artisans and people with special needs. The total capital of Khalifa Fund is AED 2 billion (USD 545 million) as of 2014. As of December 2013, the fund’s operational project portfolio included 222 projects. Its projects created 2,916 new jobs during 2013.

Sources and Additional Resources

[1] Reuters, UAE fund to provide $200 mln in loans to microfinance projects in Egypt

[2] The National, GCC support shows region has a stake in Egypt’s crisis

[3] Khalifa Fund for Enterprise Development, website

MicroCapital, December 3, 2014, Egypt Issues Microfinance Law in Effort to Expand Access to Capital for Microenterprises

MicroCapital, December 2, 2014, 4th Global Islamic Microfinance Forum Hosted by AlHuda Center of Islamic Banking and Economics, Concludes with Release of “Road Map of Industrial Promotion”

MicroCapital, June 19, 2014, Egypt Approves Microfinance Law in Effort to Expand Access to Microcredit, Bring Microenterprises into Formal Economy

MicroCapital Universe Profile: Khalifa Fund for Enterprise Development

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