The Social Fund for Development spent EGP 1.3b by the end of August from its total 2014 allocations of EGP 2bn providing new youth opportunities, said Hana Helaly, the Fund’s Acting Secretary-General.
The fund hopes to lend EGP 2bn this year in order to provide 185,000 work opportunities, Helaly added.
The fund selected the areas most in need of loans according to a poverty map in a move to generate work opportunities in these areas, Helaly said.
According to the Ministry of Planning, Egypt’s poorest areas are located in the governorates of Assiut, Sohag, and Minya.
The fund is coordinating with a number of international financial organisations, with the World Bank at the forefront, who recently decided to provide a loan to the Fund worth $300m. The money will be used to fund small and medium enterprises.
The World Bank also agreed to provide a grant to the Financial Supervisory Authority worth $8.1m in order to support small and medium enterprises.
Financing worth $67m was also provided by the World Bank in cooperation with the European Union to train workers, Helaly said.
Helaly added: “The suggestion is that the fund is complicating procedures for borrowers is un-founded.”
She said the fund provides funding to projects with a simple interest rate of 10%, approximately 5% less than the interest provided by banks.
Unemployment in Egypt averages at 13%, with those between the ages 18 and 40 most affected according to the Central Agency for Public Mobilization and Statistics (CAPMAS).
Unemployment has worsened recently partially due to the persistent tourism crisis. Egypt’s tourism revenues declined by 41% over the past year, while 4,200 industrial factories have also ceased to operate.