Long-awaited dedicated body to support SMEs established

CAIRO – 27 April 2017: After a government decision to establish a new entity for the small- and medium-sized enterprises (SMEs), the business community pins its hopes on the new body to enable startups to solve the challenges they have been facing for a long time.

The Cabinet approved the establishment of the new institution on Monday, which will be under the administration of the Industry Ministry.

“All the detailed information regarding the new entity will be announced soon,” the Industry Minister, Tarek Kabil said in a statement on Tuesday.

The entity will have a legal personality and will be managed by a board of trustees under the presidency of the prime minister and a number of ministries as members.
There will be also a board of directors which will be headed by Kabil and the membership of a group of experts in the area of SMEs, in addition to a chief executive officer.

Why the new entity is important?
Egyptian business community has been struggling for a long time to have a specific strategy for SMEs and micro projects, which will ease procedures to establish start-ups and help entrepreneurs overcome the obstacles and challenges facing businesses in Egypt.

SMEs are suffering from a number of challenges, such as registering their companies, obtaining licenses, access to finance. While some big companies can overcome such obstacles, start-ups fail to do so due to a lack of experience, Chairman of the Junior Businessmen Association (EJB), Ahmed Mashhour told Egypt Today.

Mashhour said that supporting SMEs is the best solution for Egypt’s economy as they have the ability to provide a large number of jobs which will help reduce unemployment and produce important products.

“No country can develop without depending on SMEs. Marketing, unnecessary bureaucracy and licensing procedures are the most significant setbacks for SMEs,” Alaa el-Sakty, Head of the SMEs association, a NGO, told Egypt Today.

One of the serious problems that faced SMEs in Egypt during the last period, is the absence of a dedicated governmental agency that can take the lead in putting forward policies and strategies for SMEs.

The role of the new body
Other entities that pertain to SMEs will come under the administration of the new body, including the Industrial Training Council, the Industrial Modernization Centre and the technology and innovation centers, the Ministry of Industry’s statement said.

The new entity will handle all issues pertaining to SMEs to help the ministry develop this vital sector, the statement added.

The entity will be working on developing the skills of human resources working in these projects, and connecting them to the supply chains.
It will additionally improve their marketing skills to market the products inside and outside Egypt, and will help the projects prepare feasibility studies.

The body will work on providing SMEs with high quality raw materials at affordable prices, encourage startups to export their products by providing financial incentives and facilitating access to finance for increasing capitals in case of expansions.

The institution will further facilitate obtaining the needed permits to start businesses and will establish a database for the industrial small, medium and micro projects.

Sakty said that it is still early to say whether or not the new entity will be effective, as the chairman and members are yet to be appointed. However, the decision to create such entity is promising, he added.