Small and Medium Enterprises Landscape in Egypt: New Facts from a New Dataset*

Hala El-Said, Mahmoud Al-Said, Chahir Zaki
(Faculty of Economics and Political Science, Cairo University, Cairo, Egypt)

Abstract: Small and medium sized enterprises (SMEs) have usually been perceived as a dynamic force for sustained economic growth and job creation in developing countries. In Egypt, despite banking reforms that have been launched in 2004, the ability of SMEs to more easily access suitable and sufficient means of finance has always been considered a major obstacle facing many SMEs. For this reason, and in order to be able to extend the financial services provided to this segment and increase the benefits of the banking reform, the Central Bank of Egypt launched in December 2008 an initiative, as an integral part of the Second Phase of the Banking Sector Reform Program (2008-2011), to enhance SMEs access to finance and banking services. In this paper, we present a descriptive analysis of the SMEs landscape in Egypt relying on this extensive census. The main findings of the census show that there is a high concentration of SMEs at different levels. First, the geographical distribution of SMEs is significantly skewed since almost half of them are concentrated in three governorates Sharkeya, Cairo and Gharbeya. Second, they are chiefly operating in two economic activities, namely manufacturing and trade. Third, a very few firms are exporting. Finally, financial services seem to be under-utilized by SMEs as only 50 percent are dealing with banks and benefiting from an improved access to finance.

Key words: SMEs; access to finance; Egypt

JEL codes: D2, G21, P42