IFC, a member of the World Bank Group, provides a $100 million loan to the Arab African International Bank (AAIB), to help the bank scale up its lending operations to small and medium enterprises and build its sustainable energy finance portfolio in response to increased energy bills for many companies and SMEs part of the financial inclusion.
About $50 million will be earmarked for SMEs to support the bank’s strategy to significantly increase its lending to smaller businesses. The remaining $50 million will be earmarked for introducing credit lines that support energy efficiency, helping businesses that need to make capital investments to refurbish or renovate existing operations to reduce energy costs.
Hassan Abdalla, CEO and Vice Chairman of AAIB said: “Small and medium enterprises are at the heart of driving economic growth so we are delighted to be able to continue to expand our lending to these businesses.” “We are also looking forward to expand our services by offering new SEF products to help our clients reduce energy costs, improve their competitiveness, and help mitigate climate change,” Abdalla added.
“While micro, small and medium enterprises (MSMEs) continue to play a dominant and increasing role in creating jobs in Egypt , access to finance remains a significant challenge for many,” said Mouayed Makhouf, IFC Director for the Middle East and North Africa. “This loan will help a strong bank increase its reach to smaller businesses and encourage other financial institutions to follow suit, while also helping to boost energy efficiency in Egypt.”
Between fiscal years 2011 and 2016, IFC’s investments in Egypt totaled close to $1.5 billion, including financing mobilized from other investors. IFC’s investments have been designed to support Egypt’s private sector, create jobs, and spur growth, all considered vital in the country.
The loan complements AAIB’s efforts in the field of sustainable finance. Being a trendsetter in the Egyptian banking sector in embedding sustainability policies and practices in its daily banking traditions. This loan further strengthens AAIB’s products efficiency in this emerging field.
