EFG Hermes Leasing, a subsidiary of Egypt’s investment bank EFG Hermes, has signed a cooperation agreement with HSBC Bank Egypt to provide small- and medium-sized enterprises’ (SMEs) with EGP 400 mn in leasing and financing services throughout 2019, Invest-Gate reports.

“The collaboration agreement provides additional support to initiatives unveiled by the government and the Central Bank of Egypt (CBE) to boost the SME sector – widely regarded as the backbone of the country’s economy and estimated to generate a significant percentage of the nation’s GDP,” read a statement by EFG Hermes on December 27.

According to the statement, the deal aims to provide SMEs with low-interest rate funding, access to medium and long-term financing for capital expenditure, and the ability to streamline cash flows.

“This agreement is part of our group-wide aim to grow the contribution of SMEs in our portfolio to 16% compared to the 6% seen in 2017 … We are very excited for this opportunity to combine our experience with that of HSBC Egypt to deliver innovative financing solutions for various SMEs in the local market,” Ahmed El-Kholy, CEO of EFG Hermes Leasing, was quoted as saying.

The deal was inked during a signing ceremony at HSBC Egypt’s head office and was attended by El-Kholy, in addition to HSBC Egypt Executive Director and Chief Operating Officer Hania Sadek, HSBC Egypt Managing Director and Head of Global Banking Helmy Ghazi, and EFG Hermes Leasing Finance and Treasury Director Talal Elayat.

Speaking on the initiative, Ghazi stated, “This agreement demonstrates our commitment to Egyptian SMEs and our ability to deliver the right mix of products, quality of service and international reach to support SMEs seeking to grow domestically and internationally.”

“The latest HSBC Navigator report for Egypt highlights that 75% of businesses feel confident about success as Egypt’s market dynamics improve and this agreement will help support growth-oriented companies,” he added.

HSBC Egypt had earlier launched SME Growth Funds in 2015 and 2016, totaling EGP 600 mn (USD 33.5 mn), before doubling its balance sheet commitments to SMEs in 2017.

As for EFG Hermes Leasing, it launched a dedicated program back in May that is aimed at partnering with suppliers that facilitate SME financing solutions.