Egypt’s Banque Misr receives loan from African Development Bank, China

The African Development Bank approved a new loan to Egypt last week. 

The Ivory Coast-based financial institution loaned the Egyptian state-owned Banque Misr a $130 million line of credit. There is an additional $30 million from the Africa Growing Together Fund, according to a Nov. 10 press release.

The Africa Growing Together Fund is sponsored by China and administered by the African Development Bank.

The purpose of the loan is to provide extra liquidity to Banque Misr so it can extend loans to small- and medium-sized businesses and corporations. Banque Misr is to provide the loans to entities operating in industry, information and communications technology, and agriculture, per the release. 

Why it matters: Egypt is in the midst of an economic crisis marked by high inflation, a shortage of dollars and supply chain disruptions related to the Russian invasion of Ukraine. 

Egypt is seeking help from abroad as a result and has attracted a large amount of investment from Gulf states this year. The North African country is also selling state-owned firms. 

The loan’s focus on smaller businesses could help Egypt’s blossoming startup scene. Most recently, more Egyptian investors are targeting climate-focused startups. 

Know more: The loan also represents continued Chinese interest in the Egyptian economy. The Chinese tech giant Huawei signed a cooperation deal with Egypt’s Information Technology Industry Development Agency in August to help support Egyptian startups. 

China also helped Egypt prepare for the United Nations climate change conference COP27, which is currently being held in Sharm el-Sheikh. 

Egypt additionally announced in August it would start issuing bonds denominated in China’s currency, the yuan.