The FINANCIAL -- Today in Frankfurt am Main the Federal Ministry for Economic Cooperation
and Development (BMZ), KfW Entwicklungsbank and the European Union
launched the SANAD financing fund as the central pillar of the German
support package for private enterprise development in Egypt and other
countries in North Africa and the Middle East.
"The countries of the 'Arab spring' are in a profound process of transformation. Now it is important to provide the young generation with prospects for jobs and democracy. The SANAD fund provides micro, small and medium-sized enterprises and entrepreneurs with access to loans. In this way new jobs will be created. SANAD (Arabic) means help - and that is exactly what we want to provide by contributing to economic stability", said Germany's Development Minister Dirk Niebel at the signing of the agreement.
Dr Norbert Kloppenburg, Member of the Executive Board of KfW Bankengruppe, said. "We are convinced that financing offers for small enterprises and the development of the still weak banking sector in the countries of North Africa and the Middle East will lead to significant reductions in poverty and economic stability."
The goal of the SANAD financing fund is to satisfy the large unmet demand of smaller enterprises for investment loans. Enterprises receive favourable loans at market conditions via their regular banks, which refinance the loans through SANAD. The Fund is organised as a so-called structured fund with different risk tranches, thus also offering investment options to private and quasi-government investors. These third party and market funds as well as return cash flows and interest income multiply the financing potential.
The German contribution amounts to EUR 20 million. In addition, the European Union will contribute EUR 10 million. Other potential investors will follow by the end of the year. Initially the Fund will enable financings in Egypt, Jordan, Lebanon, Tunesia, Morocco and the Palestinian Territories.
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