Egypt's National Bank of Development is the only private bank that is doing any microfinance lending in the region -- a stunning fact gleaned from reading an interesting new survey in Making Microfinance Work in the Middle East and North Africa, posted on Development Gateway.
Granted, 60 NGOs and quasi-governmental organizations are involved in microfinancing programs throughout the region, but as the report's authors say: "Engaging the formal financial sector in microfinance will be the most efficient, fast, cost-effective way to fill the outreach and financing gap and serve the needs of the entrepreneurial poor."
How many entrepreneurial poor do the authors estimate are in dire need of credit in the region? At least 4.5 million entrepreneurial poor, out of the 60 million considered living below the poverty line, they say. And what is the size of the financing gap? A conservative estimate, according to the authors, is $1.4 billion. Private financial institutions and banks operating in the Middle East and North Africa may want to do the math.
Egypt's National Bank for Development comes in as "Single in Class" for its truly unique best practice work on microfinancing, while turning a profit in the process. Alexandria's Business Association, also Egyptian, is making the transition from NGO to formal financial intermediator. A trickle for the region, but clearly solid examples of what can be achieved in a region where jobs are about as scarce as private financial institutions engaged in the microfinancing industry.