SANAD provides first Tier II capital in Egypt to Banque du Caire
Subordinated debt totaling USD 30 million to strengthen capital base and boost bank’s ability to provide local businesses with much-needed financing
Luxembourg and Cairo, December 1, 2020 – The SANAD Fund for MSME (SANAD) has provided its first Tier II capital investment in Egypt to long-standing partner Banque du Caire. The investment will strengthen the bank’s capital base by USD 30 million. Through the transaction, the fund aims to boost Banque du Caire’s strong growth plans and ability to provide local businesses, including micro, small, and medium enterprises (MSMEs) and agricultural producers as well as microfinance institutions, with much-needed liquidity to different client segments in a business environment made difficult by the COVID-19 crisis.
The leading microfinance bank in Egypt, Banque du Caire has been a strategic SANAD partner since 2017, supporting the impact investment fund in its aim to expand access to responsible business financing for MSMEs. The new transaction marks the fund’s first subordinated loan to a bank operating in Egypt after SANAD received its license from the Central Bank of Egypt in July 2020 to provide Tier II capital. By thus bolstering the financial infrastructure upon which entrepreneurs rely, SANAD and Banque du Caire aim to support the ability of business owners across economic sectors to access the resources they need to withstand the economic headwinds brought about by the coronavirus pandemic.
SANAD Board Chairperson Dr. Daniela Beckmann said, “We are proud of this milestone with Banque du Caire. This collaboration has proven fruitful for SANAD’s efforts to promote income generation and employment in Egypt, the region’s most populous country, by expanding financial inclusion, especially to MSMEs – the backbone of the economy. Now, we are glad to play a role in strengthening this valuable partner’s ability to continue serving this important segment, particularly now when liquidity is essential to the survival of many smaller businesses.”
Tarek Fayed, Chairman, Banque du Caire, said: “Banque du Caire is highly committed to providing financing solutions for Egypt’s local businesses. This includes boosting the capacity and reach of microfinance institutions as well as serving MSME clients directly. Our partnership with SANAD signals the confidence of international investors in our operations and impact. The new investment will be valuable in strengthening our capital base to support our growth plans for expanding lending opportunities to a wide array of economic sectors and client segments, including MSMEs and the agricultural sector.”
The SANAD Fund for MSME finances micro, small, and medium enterprises and low-income households in the Middle East and North Africa via qualified local lenders. SANAD thereby fosters economic development and job creation – including youth employment – agriculture, affordable housing, and innovations in finance and financial technologies. SANAD strives to meet these goals by providing debt and equity financing to its local partners.
The SANAD Technical Assistance Facility (SANAD TAF) multiplies the fund’s impact and outreach through capacity-building with partner institutions, developing financial infrastructures according to the principles of responsible finance and conducting much required research and development. The SANAD Entrepreneurship Academy, an initiative of the SANAD TAF, encompasses a range of programs to support business owners throughout SANAD’s target region. By working together with local organizations that drive incubation and acceleration projects, the Entrepreneurship Academy provides entrepreneurs with guidance, resources, mentoring, networking opportunities, the chance to receive financial backing, and other means necessary to turn good ideas into successful enterprises.
An impact investment fund advised by Finance in Motion, SANAD’s investors include the KfW Development Bank, which initiated the fund; the German Federal Ministry for Economic Cooperation and Development (BMZ); the European Union; Switzerland’s State Secretariat for Economic Affairs (SECO); OeEB, the Development Bank of Austria; Germany’s GLS Bank and GLS Treuhand; the Dutch development bank FMO; and Calvert Impact Capital.
For more information on the SANAD Fund for MSME, please visit: www.sanad.lu
For more information on Finance in Motion, please visit: www.finance-in-motion.com
About Banque du Caire
Banque du Caire is known in the market for pioneering institutionalized microfinance operations. The bank holds around 25% of the microfinance market share in Egypt's banking sector. The bank has succeeded in consolidating its leadership through remarkable expansion and growth in financing small and medium enterprises with a recorded growth rate of 220% at the end of December 2019 compared to December 2018. The total facilities granted to customers in this segment amounted to EGP 9 billion in 2019, growing by 24% year-over-year. The bank provides necessary funds, whether for individuals or corporates to increase financial inclusion and sustainability, while regularly revisiting its business plan and strategy in order to meet different client needs.
Media contact – SANAD
Senior Officer, Marketing & Communications
Phone: +49 (0)69 271 035-470
Media contact – Banque du Caire
Head of Corporate Communications & Sustainable Development
Phone: +20 2 2264 8868