MICROCAPITAL BRIEF: EBRD Loans $100m to NBK Egypt for Short-term Financing Amidst Pandemic, with “Focus” on SMEs

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution, recently loaned USD 100 million to the National Bank of Kuwait (NBK) Egypt, which provides Islamic and traditional financial services to consumers and corporations in Egypt. The loan will allow NBK Egypt to boost its short-term lending to businesses that are experiencing a decrease in revenue due to the COVID-19 pandemic, “with a special focus” on small and medium-sized enterprises (SMEs). The transaction is part of a series of such loans that EBRD is issuing to its current clients to help them manage the pandemic.

NBK Egypt was formed when Kuwait-based NBK acquired the Al Watany Bank of Egypt. As of 2019, NBK Egypt had 49 branches, EGP 64.3 billion (USD 3.98 billion) in assets, return on assets of 3.4 percent and return on equity of 3.2 percent. NBK was founded in 1952, and its shares are traded on the Kuwait Stock Exchange. It has 150 offices and subsidiaries in eight countries in the Middle East plus China, France, Singapore, Switzerland, Turkey, the UK and the US. As of 2019, its assets totaled KWD 29.3 billion (USD 95.1 billion).

Founded in 1991, EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in MSME funders. With a focus on “the promotion of private and entrepreneurial initiative,” the bank plans to disburse about EUR 8 billion (USD 8.6 billion) during 2020 to grow its portfolio to about EUR 48.5 billion (USD 52.4 billion). EBRD’s shareholders comprise 69 countries plus the European Union.

By Andrew Janni, Research Associate

Sources and Additional Resources

EBRD press release
https://www.ebrd.com/news/2020/ebrd-and-nbke-support-local-businesses-in-egypt-.html

NBK Egypt webpage
https://www.nbk.com/egypt.html

NBK Egypt financial reports
https://www.nbk.com/egypt/About/financial-reports.html

NBK homepage
https://www.nbk.com/

EBRD homepage
https://www.ebrd.com

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