Exhibitions, loans and expansion initiatives… Will Egypt's plans for developing small projects succeed?

Cairo – The Egyptian government is working to expand small, medium and micro enterprises in many tracks, amid successes, challenges and feelings of anxiety about stumbling among some beneficiaries, due to the current conditions that require – according to economists who spoke to Al Jazeera Net – correction, good management and care.

Small projects in Egypt face many challenges, at a time when the government is increasing efforts to activate the development of these projects and take care of productive families, in light of the difficult economic conditions, through several tracks:

  • Small, medium and micro enterprise development agency.
  • Productive families project.
  • Activating the Fund for Supporting Rural and Environmental Industries and Rural Revitalization.
  • Launching initiatives.
  • Contribute to e-marketing.
  • Organizing exhibitions.

According to official statistics , the governorates of Upper Egypt received 45% of the total government funding directed to these projects during the period from July 2014 to December 2022, compared to 36% for the governorates of Lower Egypt, and 14% for the urban governorates.

On April 3, the Small and Medium Enterprises Committee in the House of Representatives recommended that the Small, Small and Micro Enterprises Development Agency prepare a proposal to amend Law No. 152 of 2020, regarding the agency’s work to empower women more than the benefits and incentives stipulated in the law, as the percentage of women among those who obtain Commercial records of small enterprises to 26%.

Egyptian President Abdel Fattah El-Sisi referred more than once to the need to achieve economic empowerment based on medium, small and micro projects across the country, stressing interest in this in implementing the North Sinai border governorate development strategy.

Prime Minister Mostafa Madbouly confirmed that the small projects sector receives great attention from the state, through many initiatives supporting it, and exhibitions to promote its products.

Kyrollos Daoud, one of the participating investors in the Diyaruna Government Fair, who sees it as an opportunity to market his small project - a private photo taken by the correspondent
Kyrollos Daoud, one of the investors participating in the "Diyarna" government fair, sees an opportunity to market his small project (Al-Jazeera)

struggle trip

Kyrollos Daoud owns a special project in handicraft textile industries in the south of the country, specifically in the city of Naqada in Qena Governorate, and he is a permanent participant in the “Dyaruna” exhibitions organized by the Ministry of Social Solidarity to support small investors, including the exhibition currently held in the 6th of October City near the capital, Cairo. From the 16th of March to the 20th of April.

Daoud explains – in his interview with Al-Jazeera Net – that he is from a house that specializes in the handmade textile industry, and he started his project with pure family financing, refusing to go to loans for fear of stumbling in difficult economic conditions, which has happened with many people in recent times.

Dawood points out that the owners of small projects find in the government "Diyaruna" exhibitions a good opportunity for marketing, which is the biggest challenge for these projects, explaining that internal marketing in Egypt is subject to the location of the exhibition. And profitable, in contrast to the current exhibition in 6th of October City, which has not yet yielded fruit.

Daoud calls for the government's support for small investors in foreign marketing exhibitions around the world, referring to his experience and many others at an exhibition in Bahrain recently, in which they incurred losses due to the cost of travel, shipping and the booth in the exhibition, only to be surprised by Chinese products sold at lower prices, although the quality of the handcrafted Egyptian product is better.

The feeling of anxiety about stumbling and debt is still the dominant obsession for many at this time, including Rami Ragab, who is the owner of a micro-enterprise in the ready-made garment industry. He explained to Al-Jazeera Net that the market cannot afford to seek loans to expand his private project in light of the current recession, while He indicates that some seek to use government funds and loans to pay off their debts and not to start a project or expand an existing project, according to what he monitors.

Law No. 152 of 2020 defines small projects as “every project whose annual turnover is one million pounds and less than 5 million pounds, or every newly established industrial project whose paid-up or invested capital, as the case may be, is 50 thousand pounds and less than 5 million pounds, or each A newly established non-industrial project whose paid-up or invested capital, as the case may be, is 50,000 pounds, and less than 3 million pounds,” noting that the dollar equals about 31 Egyptian pounds.

That is, micro-enterprises are every project whose annual turnover is less than one million pounds, or every newly established project whose paid-up capital or invested capital, as the case may be, is less than 50 thousand pounds.

growth challenges

For his part, economist Abdel Hafez Al-Sawy believes that awareness of the importance of small, medium and micro enterprises is weak in Egypt, although many countries have brought about economic development in it, such as Japan, and despite the existence of many Egyptian feasibility studies, they have not been transferred to the ground either through the government. Or businessmen or associations concerned with financing.

Al-Sawy expresses – in his speech to Al-Jazeera Net – his deep distress at the lack of governance of those associations concerned with financing these projects, which he says provide financing at a very high price without any sponsorship, while quite a few beneficiaries of the loans use them to manage some of their social needs instead of projects, Such as spending on homes during unemployment or paying off debts. Rather, some beneficiaries fall into the dilemma of what is called “debt recycling” by resorting to association after association to pay off a loan from one association to another, only to fall victim to the debt in the end.

The distinctive Egyptian decorations industries are used by many small investors, especially for export - a private photo from the reporter's photo
Many small investors resort to the distinctive Egyptian decorations industries, especially for export (Al-Jazeera)

Al-Sawy believes that the most important challenges facing these projects lie in government bureaucracy and corruption in localities, and the difficulty of obtaining bank financing due to the absence of guarantees, while successful experiences stem from the association of small and micro projects with medium and large projects such as feeding industries.

He points out that there is a problem with the continuous stereotyping associated with these projects and the attempt to limit them to specific projects, such as groceries, vegetables and textiles, explaining that software projects are small projects in India, and the government there sponsors them and provides them with all chances of success.

The economist asserts that for the success of small, micro and medium enterprises, several foundations must be combined, foremost of which is good training, management, marketing and quality, to come up with products that are suitable for their competitive counterparts at the local or external level.

Al-Sawy suggests that the government introduce these projects from the stage of technical education after the preparatory stage in commercial, industrial or agricultural schools, so that these students can learn about the concepts of these projects from an early age in schools.

coordinate efforts

Economic researcher Ibrahim Al-Taher believes that the most important challenge facing these projects is the effectiveness of coordinating the efforts made in the file of small projects, especially with the productive family system affiliated with the Ministry of Solidarity, or the paths of the Enterprise Development Agency affiliated with the Prime Ministry, or other community initiatives, so that there is an inclusive umbrella. It is governed by standards of governance and transparency and is led by a clear plan.

And Al-Taher explains – in an interview with Al-Jazeera Net – that the success of small projects begins with taking care of operating the first production machine in the nucleus of society, which is families, expecting that with time, deliberate expansion and intensification of awareness and motivational programmes, the system of productive families may improve in a way that contributes to solving the economic crisis, especially with regard to It is related to the development path based on reviving traditional handicrafts, contributing to export and bringing in hard currency.

The economic researcher believes that in the current case of Egypt, these projects will not succeed except after government interest in them similar to the infrastructure such as bridges and roads, in the absence of coordination and integration, and lack of care to spread the culture of productive families and raise awareness of such development projects sufficiently and effectively, although they are considered a stone Corner in several economies.

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