The European Bank for Reconstruction and Development (EBRD) is partnering with the National Bank of Egypt (NBE) to help Egyptian companies engage more widely in international trade, through a US$ 50 million trade line under the Trade Facilitation Programme (TFP).
This trade line is the second part of a US$ 100 million facility, the first part of which comprised a US$ 50 million loan for micro, small and medium-sized enterprises (SME’s) that was signed in December 2013.
Through this trade finance line the EBRD will provide guarantees to international commercial banks covering political and commercial payment risk of the transactions undertaken by NBE, and will also provide financing for import and export transactions.
Francis Malige, the EBRD’s Director for Financial Institutions, said: “We are very pleased to sign the second part of the financing facility with NBE, one of the main banks to offer trade finance, with well-established correspondent banking relationships worldwide. This TFP line will boost trade activities, providing clear benefits to the Egyptian people, by facilitating the import of food, medication and other necessities.”
Sherif Elwy, Deputy Chairman for NBE, said: “It gives NBE great pleasure to sign a US$ 50 million trade finance line with the EBRD. This line represents the second tranche of a US$ 100 million financing package, comprising a US$ 50 million loan to SMEs. Our collaboration this time around aims at assisting Egyptian companies to engage more widely in international trade. NBE is happy with its partnership with the EBRD and is looking forward to further cooperation for the benefit and support of the Egyptian economy.”
The National Bank of Egypt was founded in 1898, and is the oldest and largest commercial bank in the country. NBE is the market leader in terms of total assets, with 24 per cent of market share. The bank has the largest branch network in Egypt, with 338 branches and outlets distributed throughout the country, and 1,535 automatic teller machines (ATMs).
This transaction is part of NBE’s strategy to enhance its sources of funding through building strong and well-diversified relationships with international financial institutions and investors. This will eventually strengthen NBE’s capabilities to introduce more diverse financing programmes and options to its customers and the market as whole.
Technical cooperation between NBE and the EBRD will assist in improving trade finance skills knowledge transferring best practices for prudent banking in trade finance.
To date, the EBRD has invested €203 million in nine projects in Egypt, in various sectors. The Bank has also initiated technical assistance support programmes to approximately 105 Egyptian SMEs.