I. Overview 

The Ministry of Finance (MoF) has taken steps to establish a favorable policy environment for the development of M/SMEs in Egypt.  In November 2004, MoF published a report entitled “Enhancing Competitiveness for SMEs in Egypt: General Framework and Action Plan”.  This report builds on previous efforts and provides an updated general policy framework for the creation of an enabling environment for SME growth. 

MoF has also established within its structure a specialized Unit for M/SMEs, which is supported by the SMEPol project. The SME Development Unit is mainly concerned with enhancing the M/SME policy environment.  Among its policy objectives, M/SMEs access to finance is identified as a priority policy area.   

Within this context, several research assignments and studies were completed since 2001 on various mechanisms to enhance M/SME access to finance.  

1. Venture Capital

In the Area of Venture Capital, the research study and action plan for “The Application of Venture Capital within the SME Sector” was completed in 2004.  The recommendation suggesting the establishment of a Committee to discuss the feasibility of establishing a Venture Capital Fund was implemented, where an inter-ministerial committee was established in 2005 within MoF. Furthermore, a Roundtable of Discussion was held in July 2006 to discuss the challenges facing equity finance in Egypt and how to overcome them; specifically with regard to Venture Capital.  This is in addition to completing “The Feasibility Study on the Establishment of a Private Equity Fund” in April 2007.  

2. Leasing

Leasing is another non-conventional means of access to finance for SMEs.  The study “The Application of Leasing within the Small and Medium Enterprises Sector” was completed in June 2004.  It analyzed the constraints facing the industry in Egypt, highlighted recommendations to address these obstacles, and identified responsible parties.  In efforts to implement the recommendations outlined in the Action Plan, MoF held a Roundtable of Discussion “Enhancing Opportunities for SME Leasing” in November 2005.  The roundtable identified a set of Legal and Regulatory as well as Technical and Operational obstacles hindering the development of the Leasing Business in Egypt.  The roundtable also highlighted recommendations to address these obstacles and identified responsible parties.

II. The SMEPol Project:

SMEPol is an eight-year (2000-2008) initiative, developed in collaboration between the Ministry of Finance (MoF), the Canadian International Development Agency (CIDA) and International Development Research Centre (IDRC) to support Egypt’s transition towards a market economy by assisting the Government to improve the policy environment for M/SME development.

The overall impact of the project is to have an improved gender-sensitive M/SME policy environment resulting in reduced financial and non-financial constraints and increased opportunities for M/SME development. SMEPoL supports MoF to develop specific policies and legislations for implementation by the Ministry and others. The project also supports research to provide the Ministry and other stakeholders with better information on M/SME issues; and promotes networking between the Ministry and other stakeholders within and outside government.

The project intends to support the implementation of policies in those areas through different mechanisms. One important tool of implementation is the existing committee structure under the leadership of MoF, namely:

• The SME Policy Development Committee (responsible for the implementation of the recommendations of the Competitiveness Strategy),

• The Venture Capital Committee (responsible for the implementation of a VC Fund for SMEs),

• The Formalization Committee (responsible for the legal and regulatory issues), and

• The Government Procurement Committee.

III. The General Authority for Investment and Free Zones (GAFI)

The General Authority for Investment and Free Zones (GAFI) is the principal governmental authority concerned with regulating and facilitating investment, and stands ready to assist investors worldwide. GAFI is currently broadening its scope from the traditional regulatory framework into a more effective and proactive investment promotion agency. In coordination with the World Bank‘s Multilateral Investment Guarantee Agency (MIGA), GAFI has been able to undergo serious changes in facilitating and promoting investments into Egypt through its Research and Market Intelligence, Promotion and Facilitation, and investor aftercare bodies. 

Triggered by the new government’s key objectives, GAFI represents Egypt's sole "One Stop Shop" for investment, which aims at easing the way for investors worldwide to take advantage of the opportunities in Egypt’s promising emerging market. GAFI makes emphasis on various investment opportunities that lie ahead in distinct business sectors throughout the Egyptian economy. With this purpose, GAFI holds its responsibility through developing communicational campaigns and assisting its image accentuating the improved investment climate in Egypt worldwide

Agenda

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Opening Remarks

• Ms. Lois Stevenson, Senior SME Development Specialist, and SMEPol Project Coordinator

• Mr. Nabil Rashdan, Advisor to the Minister of Finance

• Mr. Maged Shawky, Chairman of Cairo and Alexandria Stock Exchanges

• Dr. Ahmed Saad, Chairman of the Capital Market Authority

• Dr. Ziad Bahaa El Din, Chairman of the General Authority for Investment and Free Zones

Speakers Bios

1^st Session:

• Leasing and Venture Capital in Egypt, Mr. Mohamed Abdel-Aziz, SME Unit Manager, SMEPol/MoF

• Credit Information and Risk Rating: Egyptian Credit Bureau, How Can it Help?, Mr. Mohamed Refaat, Managing Director, I-Score

Leasing

Venture Capital

2^nd Session: Legal and Regulatory Barriers

Chairperson: Dr. Ahmed Saad, Chairman of the Capital Market Authority

Efforts to  Promote the Leasing Industry in Egypt, Ms. Neveen El Shafei, Vice Chairman, GAFI

Taxation Amendments Geared Towards the Leasing Industry, Dr. Mohamed Sorour, Advisor to the Deputy Minister of Tax Policy, Ministry of Finance

Sales Tax Amendments Geared Towards the Leasing Industry, Mr. Mamdouh Omar, Head of the Central Department for Sales Tax Research, the Egyptian Tax Authority

Securitization, Mr. Abdel Hamid Ibrahim, Senior Advisor to the Minister , Ministry of Investment

2^nd Session: Role of Government

Private Equity/Venture Capital in Egypt: The Role of Government, Ms. Amal El-Tobgy, Senior Consultants, AIT Consulting

Establishment of a Second Tier Stock Market in Egypt, Dr. Mohamed Omran, Vice Chairman, Cairo and Alexandria Stock Exchanges.

3^rd Session: Partnership Efforts to Promote SME Leasing

Leasing Through NGOs: Incolease and BEST , Mr. Mohamed Amiri, Vice President, Credit and Marketing, Incolease

3^rd Session: High Growth Firms and VC

An Example of the Evolution of a Venture Capital Company in Egypt, Mr. Mohamed Osman, COO, SOFICO

Entrepreneurship and Innovation Centers: Engines for Innovative Ideas, Ms. Lois Stevenson, Senior SME Specialist and SMEPol Project Coordinator

4^th Session: Technical and Operational Barriers

Raising Awareness of Leasing as a Financial Tool, Mr. Mohamed Naguib, Executive President, Incolease

Activation of the Leasing Association , Mr. Mahmoud Fahmi, Founder of the Leasing Association, Chairman of Corplease

4^th Session: Gearing Human Resources Towards VC

Skills Development: Activating The Role of VC Associations in Egypt, Mr. Ayman El-Gammal, Managing Director, Naeem Real Estate Investments

Funding and Technical Assistance: The Role of Donor Agencies, Dr. Luigi Marcon, Head of Office, EIB

Closing Remarks

Ms. Lois Stevenson, Senior SME Development Specialist, and SMEPol Project Coordinator

Mr. Nabil Rashdan, Advisor to the Minister of Finance

List of Participants