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Cairo, July 2019 – The First Microfinance Company Egypt (FMFC) and FMO signed the first three-year Egyptian pound (EGP) loan facility for the equivalent of USD 700,000, which will be used to extend loans to female and young entrepreneurs.
One of the key development challenges in Egypt is the low level of access to finance. Of the country’s approximately 100 million inhabitants, less than 25% have a formal bank account. The microfinance market is still underdeveloped, with the number of clients served estimated at two to three million, or approximately 5% of the target segment. Unrealized demand is estimated at 20 million people, one of the largest worldwide.
The Egyptian microfinance market has grown rapidly in recent years, at 15-25% per annum. The market potential for microfinance is great, but still largely fragmented and unexplored. A stimulus is expected from a new Egyptian microfinance law, which allows microfinance companies to cooperate with international lenders. It should be noted that microfinance companies in Egypt can only provide credit for business-related purposes and not consumer loans.
The loan facility is provided by MASSIF, a fund FMO manages on behalf of the Dutch government, and will help FMFC in its ambitious growth strategy. It aims to grow its client base in order to reach more than 100,000 clients by 2023 – and thereby contribute to the financial inclusion agenda in Egypt with the support of FMO’s credit facility.
With this loan facility to a financial institution, FMO enters into the microfinance market in Egypt. The FMO loan facility is the first external funding FMFC has secured since receiving its company license in December 2018 and constitutes a new and important step in the development of the company.
|First Microfinance Company Egypt customer|