EFG Holding borrows $40 million from European Bank for Reconstruction and Development to provide direct liquidity for small enterprises in Egypt

The Egyptian EFG Holding group secured a unsecured senior loan of $40 million for four years from the European Bank for Reconstruction and Development (EBRD), in a deal aimed at broadening financing available to micro, small and medium enterprises in the Egyptian market. The facilities represent a first-of-its-kind precedent, being granted directly to the holding company rather than being routed separately to subsidiaries, after years when the European Bank’s facilities were limited to affiliated arms including Next Bank, Tanmia, and Valeo.

The financing agreement includes a grace period of one year and a maturity of four years, with amounts to be channeled through the group’s eligible subsidiaries in the non-banking financial sector. The move aims to close working-capital gaps and secure operating liquidity for projects and private companies, focusing on injecting financing into provinces and areas that lack funding services outside major cities. The formal signing took place on the sidelines of the twelfth annual London Investment Conference organized by EFG Hermes, attended by international institutional investors and representatives of capital markets in the MENA region.

Shifting to direct financing at the holding-company level gives financial institutions broad flexibility to recycle liquidity and allocate capital according to field demand.Mohamed Abdel-Khabir, chief executive for finance and operations at EFG Holding, explained that the loan opens a new chapter in the historic partnership with the World Bank, noting that the four-year term provides a medium-term, stable source that supports disciplined growth of the small-and-medium enterprise portfolio and enables non-banking subsidiaries to expand geographically and across new client segments. Hisham Al-Bassati, the group’s fund secretary, considered the facility to add depth to the financing base and to support a plan to diversify capital sources and creditworthiness.

Francis Malij, general manager of financial institutions at the European Bank for Reconstruction and Development, sees the provision of financial resources to micro, small and medium enterprises as a core driver of sustainable long-term economic growth in Egypt. Malij added that deepening the partnership aims to empower local companies, especially those located away from the capital, to obtain the liquidity needed for investment and innovation, thereby boosting the resilience of the national economy.

This financing flow has a direct impact on the accounts of startup founders and commercial enterprises seeking non-bank financing to offset inflation pressures and operating costs.The movement of $40 million through retail financing platforms and micro-enterprise channels requires entrepreneurs and commerce and service platforms to raise their credit readiness and adhere to financial-governance standards to use these channels. It also pits digital financial-solution providers against entities backed by low-risk development financing, pushing the market toward faster automation of credit assessment and narrower lending margins to reach business networks in the regions.