THE SOCIAL FUND FOR
DEVELOPMENT
(SFD)
SFD TODAY
• SFD is headed by the Prime Minister
and managed by a Technical
Secretariat of Developmental Experts
• Its Board of Directors includes
representation from line ministries,
private sector and civil society.
• Acting as a Mechanism for Social and Small Micro
Economic Development Enterprise Enterprise
• Focusing on job creation, through MSE Development Development
development and labor intensive
projects
• Coordinating with relevant Community &
Stakeholders to produce the necessary Infrastructure
policies for MSE development Development
• Working through 31 regional Offices &
One-Stop-Shops to ensure greater
outreach and facilitate enabling
environment for MSE development.
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CHARACTERISTICS OF SMALL & MEDIUM ENTERPRISES IN EGYPT
More than 99% of enterprises are in the Private Sector.
Enterprises account for almost 85% of total labor.
The number of enterprises engaged in economic activities is 2.41
million*.
The informal sector is estimated to be 83%.
Enterprise contribution to total export is about 4% only compared to
60% in China, 56% in Taiwan, and 70% in Hong Kong.
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Ratio of Public to Ratio of Formal to
Private Public
Informal
sector and
Formal
works Sector
0.04% 17%
Private
Sector
Informal
99.6% Sector
83%
Informal Sector Formal Sector
49% do 51% 40%
not deal deal with eligible to
with MFIs finance
MFIs do not
60%
access
services access
finance
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FINANCING MECHANISMS
Grants to Governorates & Lending to MSEs through
Ministries, to implement Banks, NGOs , &
Labour intensive public Companies (90% of
works & community Portfolio)
development projects
through NGOs, & small Direct Lending to Small
contractors, aiming at Enterprises through SFD
providing seasonal job ROs (10% of Portfolio)
opportunities Grants Loans
Financial
Delivery 7 Financial Leasing
Working Capital 1 Mechanisms
6 Venture Capital
El-Morabaha – Islamic Product 2 5 Franchise System
Overdraft 3 4 Machinery & Equipment's Purchase
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LABOR-INTENSIVE EMPLOYMENT PROGRAMMES
Stimulate and increase A key mechanism to 1
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demand on all products create employment
and services. opportunities for
unskilled or semi-skilled
labor.
4 2
May not be sustainable due to This mechanism is used in
their nature and type but many countries such as
have a positive impact on India, Ethiopia, and South
infrastructure and social Africa.
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services.
COMMUNITY & INFRASTRUCTURE DEVELOPMENT
• Examples of Community
Development activities
• Illiteracy eradication.
• Improve Primary health services,
& public awareness.
• Environmental protection
projects.
• Examples of Infrastructure projects:
• Potable water pipes.
• Weeding.
• Covering canals.
• River Nile pitching.
• Renovate and improve public
buildings.
• Rural roads.
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NON FINANCIAL SERVICES INTERVENTION MECHANIS TIERS
OF INTERVENTION:
Industrial & One Stop Shops.
Technical support Marketing &
Services Enterprise Exhibitions support.
Development Product Business Incubators.
development Development
Entrepreneurship
Partnership
Awareness agreements
Training
* For start-ups and existing micro and small enterprises’
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SFD PERFORMANCE SINCE ITS INCEPTION IN 1991 TO DECEMBER 2015
Total disbursed Number of projects
(EGP Billion)
Small enterprises 17,9 382,561
Micro enterprises
6,9 1,922,687
Total Micro and Small enterprises
24,8 2,305,248
Total public works, community and
training 5,3 -
Total 30.1 2.305.248
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SFD PERFORMANCE DURING 1/1/2015 TO 31/12/2015
Total disbursed Number of projects Number of job
(EGP Million) opportunities
Small enterprises 3074 19,345 88,276
Micro enterprises
(including micro as 1414 188,287 211,183
part of community dvt)
Total Micro and
Small enterprises 4488 207,632 299,459
Total public works,
community and 854,4 - 124,535
training
Total 5342.4 207.632 432.994
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CENTRAL SECTOR FOR FINANCING SMALL ENTERPRISES
SFD had developed different tools & mechanisms to finance prospective small
enterprises as follows:
Finance Through Banks: SFD signs contracts with banks to finance start-up
and/or existing enterprises. Clients have the right to either present their request
to SFD regional offices or apply directly to any of the banks dealing with SFD
once they have the main documents completed.
Finance Through Intermediary Agencies: NGO's– Co-operatives - Leasing &
Factoring Companies to re-lend other needs of small enterprises.
Direct Lending: In 2006, SFD initiated a mechanism to provide direct loans to
small enterprises through regional offices covering all the governorates as an
additional channel.
Venture Debt: limited to small enterprises that received equity investments from
qualified private capital providers (VCCs, incubators, investors networks) in the
current or previous rounds of funding.
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TARGET GROUPS
Any entrepreneur willing and able to start or
expand his/her own small business Needs finance
as SFD finances:
All start-ups and/or existing productive, industrial,
commercial, service-rendering enterprises, renewable
energy and agribusiness.
Finance is provided to individual enterprises and small
size companies.
Any unemployed potential entrepreneur with
financeable ideas, especially new graduates.
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COLLATERALS AND LOAN ELIGIBILITY CRITERIA
Collaterals:
The enterprise sustainability.
Regular repayment of loan installments (performing loans).
Insurance against default.
Personal Guarantor.
Loan Eligibility Criteria:
Legal capacity.
Literacy.
Residency in the same governorate or neighborhood governorate as the project.
Exhibition of military service status (completion/ exemption/ postponement.
Paid up capital up to 1 million EGP.
No. of permanent employees maximum 50.
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DOCUMENTS NEEDED TO OBTAIN A LOAN
All the required legal documents such as:
Commercial register.
Tax card.
Lease/ownership contract of the enterprise premises.
National number (ID) of the enterprise (issued from the SFD regional
offices).
Audited financial statements for existing enterprises.
Feasibility study for start ups.
Other documents that may deem necessary to examine the client request.
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LOAN TERMS
Direct Lending Loan ceiling reaches 2 million EGP per
enterprise.
Intermediaries Loan ceiling reaches 5 million EGP per
enterprise for industrial & agricultural projects.
The loan finances working capital, machines and equipment
or both.
Loan Tenor up to 5 years including grace period up to 12
month taking in consideration that interest due on the loan
must be repaid during the grace period.
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RENEWABLE ENERGY
SFD believes that the main nerve in achieving
economic development is dependent upon the
availability of stable reliable energy sources.
Access to finance is a real constraint facing this
sector due to the high investment cost and the
required period to recover the cost.
Due to the increasing demand upon providing new
clean energy sources SFD decided to increase the
loan ceiling to finance small solar energy power
stations to 10million EGP per enterprise as well as
increasing loan tenor to reach 9 years.
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ACCESS TO FINANCE NEW PROGRAMS
Investment &Venture Capital Program
SFD established this program aiming to develop a nation wide
entrepreneurial ecosystem in Egypt.
The mission of the program is to invest/finance and support the
development of high-growth potential startups creating long-term value
to the Egyptian economy; create job opportunities; and develop a
breed of entrepreneurs that will foster innovative and sustainable
development.
http://www.sfdegypt.org/web/sfd/home
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Donors Portfolio
United African
Int’l
Canadian Nations
Labor Dev.
Int’l Dev. Dev.
Program
Bank World
Agency Org. (ILO)
(AFD) Bank
German (CIDA) (WB) The Int’l
Tech. Co.
fund for
Agency
Agri. Dev.
(GTZ)
IFAD
European
KFW Union
Danish
Dev.
Social Fund for Arab fund
Assist.
Program Development for eco. &
social dev.
(DANIDA)
Italy Islamic
Dev.
Bank
China
Dev. Bank Kuwait
Fund
French The Saudi
Dev. Fund For
Agency Japan Japan Int’l Abu Dhabi Dev.
Bank For Cop. Fund
Int’l Cop Agency 18
(JBIC) (JICA)
Thanks
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