Credit
Guarantee Company
for
Small and Medium Scale Enterprises
S. A. E.
The cooperation between the Ministry of
International Cooperation (MIC) and the United States Agency for International
Development (USAID) has culminated in the establishment of the Credit Guarantee
Company for Small and Medium Scale Enterprises (CGC) .
CGC
is an Egyptian, private, Joint Stock Company established in December 1989 under
the provisions of Law 159/ 1981 and started operations by mid 1991.
CGC
founding shareholders are Nine Egyptian Banks and One Insurance Company. Banks under contract with CGC
are currently 34 banks including shareholder banks.
Purpose of
Establishing CGC
CGC
was established to guarantee loans and credit facilities offered by banks to
Small and Medium Scale Enterprises (SMEs) which lack sufficient collateral for
establishing new venture, expanding their existing activities, enhancing their
export potential, etc.. Health Care Providers Program ((HCPP) is a new addition
aiming at guaranteeing banks’ loans to doctors, pharmacists and small private
medical units in order to upgrade the health care services offered to the
Egyptian people especially in under-served areas. That is in addition to alleviating the burdens of the health
sector over the national budget.
The
Importance of SMEs
Small
and Medium Enterprises (SMEs) represent more than 90% of the total projects in
Egypt and two thirds of the labor force in Egypt.
SMEs produce 80% of the value added of Egypt GDP[1]*
In addition to
this, SMEs are labor intensive and not capital intensive. Moreover, they
alleviate the problem of unemployment.
CGC is actually running the following programs:
I. Small and
Medium Scale Enterprises(SMEs)
Definition
The Small and Medium Scale Enterprise is the project which functions in any of the economic sectors, except trade, with a total investment cost ranging between LE 40,000 (Forty Thousand Egyptian Pounds) and LE 7,000,000 (seven Million Egyptian Pounds) {1USD = 4.6 LE} excluding the value of land and buildings - as a definition. An SME has to be a legal entity.
Program
Beneficiaries
Any
entrepreneur who would like to establish a project or who would like to expand
his activities as long as CGC terms and conditions are applicable to
him/her.
Guaranteed
Activities
CGC Guarantees up
to 50% of the loans and credit facilities offered by banks to SMEs in all
economic sectors such as: Industry, Services, Contracting, Transportation,
Agricultural, Agro-industries, Education, Tourism, Storing, Mining, etc....
except trade, for the time being.
Utilization
of the Loans and Facilities
Guaranteed by CGC:
CGC guarantees are
offered to SMEs to finance fixed assets and/or working capital.
Credit
Guarantee Limits
The minimum
guarantee offered to a bank loan or credit facility for any entrepreneur is LE
10,000 (Ten Thousand Egyptian Pounds), the maximum is LE 700,000 (Seven Hundred
Thousand Egyptian Pounds).
This means that
an SME can obtain a loan from a bank ranging from LE 20,000 (Twenty Thousand
Egyptian Pounds) to LE 1,400,000 (One Million Four Hundred Thousand Egyptian
Pounds).
Guarantee
Administrative Fees
The
company collects an annual administrative fees against the issuance of a Letter
of Guarantee (L/G) amounting to 1 % of the outstanding loan amount per annum.
II. Micro Enterprises
Guarantee Facility Program:
Small
and Emerging Business (SEB) Funded by the USAID
The
Program Objective
The
program objective is the establishment of 30 new lending units through NGOs in
different governorates, to guarantee loans offered by banks under contracts
with the company to micro entrepreneurs without any collateral requirements
from neither the bank nor the NGO
The
Amount of the Fund
The
annual estimated financed loans to the beneficiaries are of LE 165 million on
leverage mechanism and outreach basis.
The
Unit Capacity
The
target of each unit will be 1500 clients annually.
Activities
All
activities – except agricultural – are eligible to be funded through this
program.
Conditions
for lending
Target
group
a)
For Microenterprise Projects:
·
The total investments should not exceed
LE 25,000 excluding the value of land and building – as a definition.
·
The number of labor is ranging from 1
to a maximum of 5.
b)
The Small Scale Enterprises
·
The number of labor is ranging from 6
to 15 maximally.
The
Amount of Finance Offered to the Beneficiaries
The amount of
finance offered to the beneficiaries will start from LE 1000 and could be
increased up to LE 25,000 on basis of undefaulted clients and provided good
repayment records.
The
Purpose of the Fund
The purpose of the fund is to finance the working capital. Financing the fixed assets will be considered in the future.
III.
Microenterprises Guarantee Facility
Program:
The Poverty
Alleviation and Employment Generation Program (PAP) Funded by the Italian
Government
The
Program is implemented by one of the Non-Governmental Organizations (NGO) in
Giza Governorate under the supervision of Credit Guarantee Company for Small
Scale Enterprises.
The
Program Objective
The
program objective is to finance the Microenterprise projects through one
selected bank in which Credit Guarantee Company for Small and Medium Scale
Enterprises (CGC) will be under contract for the purpose of guaranteeing the
selected NGO to the bank. The
loans offered to end beneficiaries will be 100% guaranteed by the NGO without
asking for any type of collateral.
The
Amount of the Fund
The
annual estimated amount for the beneficiaries (end users) is an accumulation of
LE 7.5 million on the concept of leverage mechanism and the outreach basis (The
principal fund is LE 2.5 million).
The
Unit Capacity
The
unit capacity will be 1400 clients during the first three years.
Activities
All
activities – except agricultural
and livestock activities – are eligible to the Program.
Conditions
for lending:
Target
Group
For
Microenterprise Projects:
·
The total investments should range
between LE 2,500 and
LE 40,000 excluding the value of
land and building – as a
definition.
·
The number of labor is ranging from 1
to a maximum of 6.
The
Amount of Finance offered to the Beneficiaries
The
amount of finance offered to the beneficiaries will be a minimum of LE 5000 and
a maximum of 40,000 provided good repayment records.
The
Purpose of the Fund
The
purpose of the fund is to finance the working capital and/or fixed assets.
IV. The Health Care Providers
Program (HCPP)
Definition
The
HCPP represents one of the principal additions to the activities of CGC. The program aims at guaranteeing loans
and credit facilities offered by banks to physicians, dentists, veterinarians,
pharmacists and small medical establishment in order to encourage the private
health care sector to provide the Egyptian people with medical services at
reasonable cost and of good quality.
The
program is devoted to fostering the activities of CGC in encouraging
male/female members of the medical union and small medical establishments in
under-served and non-served regions.
Program
Beneficiaries
The
beneficiaries of the program are the health care providers including
male/female members of the union and small medical establishments in the form
of solo or group practice. CGC has
also incorporated all medical specialties, diagnostic, remedial, laboratories,
polyclinics, pharmacies and veterinary centers into the Program beneficiaries.
Utilization
of Loans and Facilities Guaranteed by CGC
The
loan/credit facility might be utilized for the purchase and furnishing of a
clinic, for establishing and expanding the operation scale, or for the purchase
of necessary medical equipment, as well as buying and equipping a pharmacy
including medication. It can also be utilized as working capital in some
specific specializations.
Credit
Guarantee Limits
The
Loan/credit facility could be guaranteed at a rate ranging from 65% up to 100%
without any collateral required from the end user (beneficiary) by the
Company. No minimum guarantee
limit.
The
maximum guarantee limit amounts to LE 700,000 (Seven Hundred Thousand Egyptian
Pounds). In other words, each legal entity can borrow up to One Million
Egyptian Pounds
Guarantee
Administrative Fees
A
guarantee administrative fee ranging from between 0.5% to 1% - depending on
the magnitude of the loan or facility - is due annually over the guaranteed
portion of loans/credit facilities provided for health care providers. The administrative fee is due upon the
issuance of CGC guarantee and is annually payable according to the outstanding
debit balance of the loan/credit facility. Guaranteed loan/credit less than LE 100,000 (One Hundred Thousand
Egyptian Pounds) enjoys a 0.5% guarantee administrative fee only.
For
any further clarification, you are welcome to contact the Chairman’s Office
at the following contact details:
Mr. Mohamed Abdel
Hamid Mahmoud
Chairman
and Managing Director
8,
Abdel Khalek Tharwat St.,
Zip Code 11511, Cairo, Egypt
Tel:
(202)
5740401/5798612
Fax:
(202)
5756463
E-mail:
cgc_cmd@islamway.net
azaki@yalla.com
As
for the Micro programs (II and III) listed above, please contact the Micro
Unit:
Address:
92 El Tahrir St,
Saridar Building
Fifth Floor, Dokki, Giza
Tel and Fax: (202)
3365696/ 3365685
E-mail:
micro@gega.net
