(Ecofin Agency) - The financial backing aims to enable the microfinance institution to support more SMEs in a context marked by economic challenges in Egypt. 

Reefy Microfinance Enterprise Services, the microfinance subsidiary of CI Capital, recently signed an EGP200 million ($6.5 million) loan agreement with the European Bank for Development and Reconstruction (EBRD), according to local media outlets.

The loan is granted under the Egypt Youth in Business (YiB) program and aims to finance loans to youth-owned and youth-led private micro, small and medium-sized enterprises (MSMEs) in Egypt, particularly in remote areas. It will enable Reefy to adopt new lending practices and business models while expanding its loan portfolio in this underserved business segment.

This financing is backed by a package of technical cooperation measures and investment incentives, financed by the European Union (EU) and the EBRD's Shareholder Special Fund, to strengthen Reefy's and borrowers' capacities, as well as mitigate the impact of macroeconomic challenges and inflation on loan beneficiaries.

The support comes at a time when very small, small, and medium-sized businesses are met with bottlenecks due to a lack of liquidity. Economic growth is slightly down and the currency has devalued by over 50%, penalizing the ability to make investments.

It should be noted that Reefy's outstanding portfolio was estimated at EGP2.9 billion at the end of May 2023.