The main axes of Italian-Egyptian Cooperation are centred on supporting the creation of technological centres, know-how transfers and technical assistance, vocational training, microcredit programs to promote the access of youth to the labour market, partnerships between Italian associations and firms. In this context, the Italian Government is providing lines of credit that constitute both subsidiary and synergic development tools, but also good opportunities for entrepreneurs.

A brief description of the Italian credit lines in Egypt is following :

 1 -  SEDO (Small Enterprises Development Organization) / SFD (Social Fund for Development) Italian credit line – support to the small and medium enterprises

SFD/SEDO’s main aim is  to promote the generation of new sustainable job opportunities for target groups through micro, small and medium enterprises. This is done by disbursing loans through credit lines and giving technical assistance and training. Within such a contest, the Italian Government provided SFD/SEDO with a specialized credit line for an amount of € 12,912,000. This credit line is meant to support Egyptian small enterprises and will mainly finance the import of Italian equipment, machinery and tools. The project objectives are to support Egyptian small enterprises through the provision of credit and technical assistance. Loans under the credit line are managed in the framework of the SFD/SEDO financing scheme and disbursed through commercial banks. At the moment, the only commercial bank involved in the project is Bank of Alexandria, but negotiations are on going in order to expand the activity to other commercial banks.

Priority criteria for financing are:

• employment generation

• technology upgrading

• technology innovation

• clean production

• pollution control.

Each individual loan, even split into more than one contract, cannot exceed the equivalent in EGP of € 155,000.

The repayment of each loan has to be made according to the evaluation performed in the framework of SFD/SEDO financing schemes. The creation of a Revolving Fund represents the major element assuring the economical and financial sustainability of the project.

So far, the line of credit concentrated its activities on technical assistance, while trying to overcome the bottlenecks that impeded the successful disbursement of loans to the beneficiaries who asked for a financial support for their activities.

2 – Program of support to the small and medium enterprises (SME) and Joint Ventures (JV)

• The credit line was made available to individual Egyptian entrepreneurs through the Egyptian banking system for financing long term private investments. It is meant to support the cooperation between Italian and Egyptian enterprises and is open to Egyptian small and medium enterprises and/ or to joint ventures, resident in Egypt, between Italian and Egyptian enterprises.

• The technical support is responsible for Technical Assistance in: business planning, financial analysis and feasibility studies

• Goods and services supplied shall be of Italian origin, but a maximum amount of 20% may have an Egyptian origin

• The present credit line is still to be utilized for the amount of about € 10 million with some operational modifications presently subject to negotiation. After that, it will be possible to agree upon a new credit line of € 45 million.

Presentation

• Commodity Aid: an aid grant of the balance of payments in available in order to acquire goods and services of Italian origin (about € 36 million).
• Commodity Aid Counterpart found: in relation to the activities above mentioned a counterpart found in local currency is available. It is utilizable for emergency and co-operation activities with Egypt.
• Debt for development swap: funds for projects of bilateral co-operation. These funds are created by recovering Egyptian national debt with Italy (USD 100 million)