This chapter describes and assesses the policy framework for SME and entrepreneurship development in Egypt, and the policy co-ordination mechanisms and delivery arrangements for the implementation of these policies. Structural changes in policy co-ordination arrangements and processes to strengthen cross-ministerial collaboration on SME policy issues would be of value in improving policy coherence and co-ordination, reducing overlaps in policy supports and programmes and addressing policy gaps. Deficiencies in the policy monitoring and evaluation system are also addressed. The chapter concludes with a summary of recommendations to aid the government in making improvements to the policy framework, policy co-ordination and monitoring efforts, and policy delivery arrangements.
SME and Entrepreneurship Policy in Egypt
Abstract
SME and entrepreneurship support is a complex and multi-faceted area of public policy that involves a large number of public entities and stakeholders. The provision of impactful support to SMEs and entrepreneurs requires an effective and well co-ordinated approach to designing and delivering policies and programmes, with robust mechanisms for stakeholder consultation and monitoring and evaluation. The need for this is reflected in the following elements of the OECD Recommendation on SME and Entrepreneurship Policy (OECD, 2022[1]):
Recommendation 1: Co-ordinating and aligning SME and entrepreneurship policy across government entities and levels through effective governance mechanisms and place based-approaches, in line with each country’s institutional setting, circumstances and needs.
Recommendation 2: Ensuring that implications for SMEs and entrepreneurs are considered across the diverse policy areas that influence their prospects and outcomes in order to enhance policy synergies, address potential trade-offs and reduce administrative burdens, including through increased attention to their specificities and circumstances in policy and regulatory design, SME tests and evaluations, consultation mechanisms, streamlined processes and user-centric approaches in implementation.
Recommendation 3: Taking account of the diversity of SMEs and entrepreneurs throughout policy making, by assessing implications for different types of SMEs, entrepreneurs and self-employed, adopting policy relevant typologies and collecting granular data on SME and entrepreneur key features, performance and behaviour.
Recommendation 4: Setting up robust monitoring and evaluation mechanisms that systematically assess policies for their SME and entrepreneurship impacts, using relevant data and methodologies and feeding results in new policy initiatives.
The remainder of this chapter reviews the strategic framework and delivery arrangements for SME and entrepreneurship policy in Egypt, with consideration of each of the above elements of the OECD Recommendation. It concludes with a series of recommendations for the Egyptian government to strengthen its framework for SME and entrepreneurship policy development.
The policy framework for SME and entrepreneurship development in Egypt is guided by the following:
1. Egypt Vision 2030, the national development and sustainability plan.
2. The Micro, Small and Medium Enterprises (MSMEs) Development Law Number 152 of 2020 (the MSME Law).
This section reviews and assesses these key elements of the SME and entrepreneurship policy framework in Egypt. It also presents a series of considerations for the new national strategy for SMEs and entrepreneurship, which is currently being developed by the Micro, Small and Medium Enterprises Development Agency (MSMEDA), the designated responsible entity for SME and entrepreneurship development in Egypt.
Egypt Vision 2030
The Sustainable Development Strategy: Egypt’s Vision 2030, released in 2016, is the Government of Egypt’s national development plan. The strategy was developed in consultation between government agencies, civil society representatives, and national and international development partners to set comprehensive objectives for all pillars and sectors of the country, covering the economic dimension, the social dimension and the environmental dimension, and to serve as the base for short and medium term development plans for inclusive development at the national, local and sectorial levels (Ministry of Planning, Monitoring and Administrative Reform, 2016[2]). The strategy document stresses the importance of SME and entrepreneurship development in achieving the country’s goal of increasing the private sector’s role in the economy. It places particular emphasis on enabling the growth of existing SMEs to create jobs and foster exports and on fostering innovative, high-impact start-ups. The document outlined several related policy directions and actions to be pursued by a range of government ministries. These included:
Encouraging innovation and entrepreneurship;
Promoting entrepreneurship through education and training initiatives;
Promoting e-commerce and export activity among SMEs;
Developing SME-inclusive industrial clusters and strengthening linkages between SMEs and larger enterprises;
Developing a comprehensive programme to stimulate innovation activities by SMEs, including establishing entrepreneurship incubators to foster innovative start-ups and SMEs;
Supporting linkages between SMEs and the scientific research and innovation system;
Developing innovation and systems management of intellectual property rights in SMEs;
Enabling SMEs’ access to government procurement opportunities;
Facilitating SMEs’ access to financing;
Identifying opportunities for SME and entrepreneurship development across named sectors, such as the agro-industrial sector, industrial sectors, and technology sectors; and
Developing a package of incentives for integrating informal sector businesses, for example, in the areas of taxation, training, land and technical services.
In response, government ministries are directed to align their own policies and initiatives with the aims and objectives of the Egypt Vision 2030 strategy according to the scope of their ministerial mandates. The Ministry of Planning, Economic Development and International Cooperation is tasked with monitoring its implementation.
In light of the many changes in the national, regional and global context since the launch of Egypt Vision 2030 in 2016 (such as, the COVID-19 pandemic, the coming into force of the African Continent Free Trade Area/AfCFTA Agreement and the Russia-Ukraine war), the Ministry of Planning, Economic Development and International Cooperation released an updated version of the Egypt Vision 2030 strategy in 2022 (Ministry of Planning and Economic Development, 2022[3]). The updated strategy continued to reinforce the role of SMEs by stating “supporting SMEs” as one of the seven enablers to achieve the goals of Egypt Vision 2030 through a number of priority strategic actions. These included: digital transformation and technological development of SMEs; enhancing the productive abilities SMEs to integrate into local and global value chains; integrating informal enterprises into the formal economy; directing scientific research and innovation to help SMEs improve productivity and develop innovative products; facilitating the participation of SMEs in public procurement; improving the level of support services to SMEs in the areas of accounting and marketing; increasing the contribution of SMEs to exports; expanding dissemination of the culture of entrepreneurship, providing technical support, and enhancing the administrative, productive and innovative capabilities of entrepreneurs and SMEs; facilitating access to credit and guarantees, providing innovative financial services to increase access to alternative financing sources (such as venture capital, factoring and leasing), and increasing financial literacy; and expanding the geographical and sectoral spread of business incubators and growth accelerators. The updated strategy also places a priority on stimulating the green transition of industry, which has implications across the SME sector as well.
MSME Law 152/2020
The MSME Law 152/2020, in force as of 15 July 2020, repealed and replaced the Small Enterprise Development Law Number 141 of 2004 (Law 141/2004). It deals with both SMEs and entrepreneurship, providing further specification on the financial and non-financial incentives related to SME development and covering important points related to informal economy projects. MSMEDA is the designated authority for the implementation of the MSME Law.1
The new law differs from Law 141/2004 in several areas:
Coverage: the MSME Law covers medium-sized enterprises as well as micro and small businesses.
Definitions: the MSME Law 152/2020 introduces new definitions for:
Micro, small, and medium enterprises: Law 152/2020 establishes specific definitions for micro, small and medium enterprises. By contrast, Law 141/2004 only included a definition for small enterprise, which differentiated between micro and small based on paid up capital. Unlike the definitions for MSMEs commonly applied in other countries, the definitions in the MSME Law 152/2020 do not include the number of employees, referring only to annual turnover for existing enterprises and/ the value of paid-in or invested capital for newly established enterprises (see Box 2.1 in the chapter of this review on SME and Entrepreneurship Performance and Characteristics).
Newly established enterprise: defined in Law 152/2020 as an enterprise established, registered or in operation for no more than two years.
Entrepreneurial enterprise: defined as an enterprise established no more than seven years ago that relies on creativity or innovation, according to parameters set by the MSMEDA Board.
Informal economy enterprises: The new law defines an “informal economy” enterprise as an MSME without an operating licence or construction permit and without any other licence or authorisation required for it to operate.
Incentives: the MSME Law 152/2020 expands the financial and non-financial incentives for qualifying SMEs. It also applies a simplified tax system for SMEs and includes measures to encourage the formalisation of informal enterprises (see Box 4.1 for a more detailed description of the incentives contained within the law).
A key feature of the MSME Law is the stipulation that an annual appropriation from the government budget of up to 0.3% of GDP and not less than EGP 1.5 billion (approximately EUR 45 million2) be allocated for the purpose of supporting the development of SMEs. However, the law does not specify the sources of the funding, leaving the issue to be resolved on a year-to-year basis in each government budget. The annual appropriation is also not monitored, meaning that data are not readily available on the amount and nature of budgetary support for SME and entrepreneurship development. Being able to collect and monitor data on the SMEs and “supporting entities” taking advantage of the incentives under the MSME Law by categorical type (and qualifying sector) would be a first step in being able to monitor the annual State budget allocation for SME development.
The MSME Law does not set out the institutional structure or oversight mechanism for ensuring its implementation beyond naming MSMEDA as the mandated authority. In other countries, an SME law would commonly stipulate the creation of a committee to oversee the development of an SME policy agenda and implementation workplan, recognising the horizontal, cross-ministerial nature of SME policies and the need for policy co-ordination. Proposals for implementing such a co-ordination mechanism in Egypt are presented in the policy co-ordination section of this chapter. An important step that has been taken already in Egypt is the creation of a permanent committee within MSMEDA for monitoring the implementation and activation of the MSME Law. Another weakness of the MSME Law is that it does not require any annual reporting on its implementation nor on the state of the SME sector, which is often a component of SME laws in other countries.
Tax incentives
One of the major incentives in the MSME Law is the provision of special tax rates for MSMEs. Under the law, micro enterprises are subject to income taxes of EGP 1 000 to EGP 5 000, depending on their annual revenues, while small and medium enterprises are subject to corporate income tax of between 0.5% and 1%, depending on annual revenues. The law also allows for the Minister of Finance to issue special regulations with more simplified record-keeping procedures for MSMEs.
The MSME Law further provides SMEs (including informal enterprises that apply for formalisation) with a 5-year exemption from stamp duty tax and government fees for: filing articles of association, credit facilities agreements, and land registration. Formally-registered SMEs also benefit from a fixed tariff of 2% that is applied on imported equipment and tools and an exemption from the capital gains tax on the disposal of assets or machinery when any gains are used for the purchase of new assets/machinery within 1 year. These tax incentives may only be granted to SMEs that maintain regular financial books and records.
Other incentives
Under the law, SMEs can benefit from non-tax incentives including: the allocation of land with special provisions, support to cover the costs of providing technical training to their workers, the partial or full reimbursement of the cost of participating in exhibitions, and the facilitation of social security procedures and costs for micro enterprises. SMEs qualify for these incentives if they operate in the following sectors: digital transformation and artificial intelligence; agriculture and livestock; information technology; industrial and technological sectors, where the SMEs are providing innovations; and new and renewable energy. In addition, SMEs that work on increasing the use of local Egyptian components in their products may also qualify. The MSME Law also exempts entrepreneurial enterprises from the fees for registering patents, utility models and design plans.
Under certain conditions, financial institutions and other entities licensed to finance or provide facilities to MSMEs, as well as incubators and accelerators (“supporting entities), can also benefit from these non-tax incentives.
Streamlining licencing, land allocation and government procurement procedures
The licencing procedures for new MSMEs are to be facilitated through the establishment of MSME service units that issue all relevant authorisations and licenses (e.g. MSMEDA’s dedicated one-stop shops, and service units within the General Authority for Investment and Free Zones). These units may issue temporary licences for MSMEs to operate while they await final approvals from the necessary government entities. The law also includes provisions to help SMEs secure land and operational facilities, including the allocation of at least 30% of available space in industrial zones, touristic areas, urban communities and reclaimed agricultural land, with cost advantages. Additionally, the law requires that 40% of governmental contracting is conducted with MSMEs, with certain public procurement tenders to be exclusively for micro and small enterprises.
Encouraging formalisation
Under the MSMEs Law, informal enterprises can request a temporary licence valid for up to 5 years, followed by a request for a final license in the fifth year. The temporary license enables the enterprises to benefit from incentives under the law and provides a pathway to full formalisation.
Source: (Shehata, 2020[4])
The MSME and Entrepreneurship National Strategy and Operational Plan 2017-2022
In consultation with stakeholders, MSMEDA developed Egypt’s first MSME and Entrepreneurship National Strategy and Operational Plan for the period 2017-2022, although this strategy was never formally approved (Ministry of Trade and Industry, 2017[5]). The higher-level objectives of the strategy were to: 1) increase the number of registered MSMEs; 2) increase the number of start-ups surviving early years of business; 3) increase the number of new jobs in MSMEs; 4) increase MSMEs’ exports; 5) improve competitiveness in the MSME sector; and 6) achieve a greater uptake of innovation by MSMEs. These objectives were to be benchmarked against the value of selected performance indicators in 2016, although the baseline data for 2016 were not included in the strategy document and concrete targets were not set for the “rate of increases or improvements” to be achieved by the end of the strategy.
The strategy was appropriately structured around five policy themes:
1. Legal and Regulatory Environment: Reduce the administrative burden, simplify the regulatory environment for MSMEs, establish the legal framework of MSMEDA, and institutionalise the co-ordination and implementation of the strategy.
2. Access to finance: Strengthen access to finance, including the diversification of financing products and innovative tools.
3. Entrepreneurship promotion: Improve the entrepreneurial culture, including through awareness and entrepreneurship education.
4. Exports and integration into value chains: Expand the capacity of MSMEs to integrate in local and global value chains, including with a sectoral approach to cluster development.
5. Business development services: Improve access to business development support, including access to market information, and labour skills development.
Cross-cutting themes to be embedded in the actions of each policy theme were: women’s entrepreneurship, technology and innovation, and environment.
Under each of the five policy themes, the strategy outlined a comprehensive set of policy actions. While performance indicators were specified for the activities and outputs of the policy actions, these were not generally quantifiable, instead more output-focused (e.g. “training delivered”, “improved access to the schemes in place”, or “law strengthened”). This makes it difficult to assess the overall impact of the strategy on SME and entrepreneurship development in Egypt. Another issue is that specific activities in the operational plan were not well aligned with the strategy’s target groups, among which were women- and youth-owned businesses, micro and informal businesses, high-growth oriented MSMEs, highly innovative MSMEs, and MSMEs in high-growth sectors and value chains.
The strategy document stated that a review of the strategy would be commissioned in 2022, however, this was not done. A cursory review of the tasks, activities and outputs in the strategy document suggests that a number of activities were carried out, but many do not appear to have been executed. Without a formal stock-taking review (what was done, not done) and assessment of the implementation of the 2017-2022 strategy, is it not possible to comprehensively identify the outstanding policy gaps for inclusion in the new strategy.
Considerations for the new National MSME Strategy
MSMEDA is currently in the process of developing the new MSME strategy, considering various factors such as baseline data, consultation with stakeholders, and the design of key performance indicators for implementation. Topics to be covered in the strategy include innovation, the green economy, digitalisation, the internationalisation of MSMEs, and sector-specific measures. In addition to this, the strategy will take into account the nature and needs of MSMEs, as well as entrepreneurial ventures. It will also address economic changes at both the international and local levels, all within the framework of Egypt's Vision 2030 and Phase 2 of the economic and structural reform program.
This section discusses a number of considerations that should be taken into account in formulating the new national strategy, which is to be co-ordinated by MSMEDA but to involve many actors.
Changing context
In formulating the new national strategy, MSMEDA should consider changes in the environment for SMEs and entrepreneurs that have taken place in recent years, in particular the passage of the MSME Law. The new strategy should reflect stipulations in the MSME Law with respect to strengthening support entities, such as business incubators and accelerators and other important policy directions such as supporting the formalisation of SMEs operating in the informal economy. It should also take into consideration the lessons learned from the impact the COVID-19 pandemic on the delivery of public services to SMEs and whether for example, new, more virtual ways of working, could be effectively added to the new policy delivery environment. The new strategy and operational plan should also align with the prescribed policy directions laid out in the Updated Egypt Vision 2030 released in November 2023 (see earlier section of this chapter on Egypt Vision 2030), and reflect the changing economic environment which drove that updating process, such as the negative repercussions of the COVID-19 pandemic, inflationary and exchange rate pressures on the Egyptian economy, the Russia-Ukraine war economic and trade-related opportunities presented by the AfCTFA, technological advances of the digital economy transformation, and transition to the green economy and greening of industry. All of these contextual changes have implications for entrepreneurship and SME development.
Furthermore, the new strategy should reflect a growing number of new policy initiatives, such as from the Ministry of Planning, Economic Development and International Cooperation’s “Rowad 2030” project (2017-2022), which evolved into the Egypt Entrepreneurship and Innovation Centre (EEIC) in mid-2023. This included the objective of generating one million new entrepreneurs and 50 000 start-up companies by 2030 and focused on building an integrated and inclusive entrepreneurial ecosystem that enables young people to establish businesses.3 The EEIC is also developing a national index to measure entrepreneurship and innovation with the aim of improving Egypt’s international rankings in these areas. The index will be issued annually based on the collected and analysed data from the Entrepreneurship Observatory being developed by the EEIC.4
The new strategy should seek policy coherence by integrating a range of different policy initiatives of other government entities (identified through the consultation process), which will also serve to strengthen co-ordination activity as the strategy’s operational plan is being implemented.
Higher-level objectives and targets
The five higher-level objectives stated in the 2017-2022 national SME and entrepreneurship strategy, although may still apply in the new strategy, should be carefully reviewed in consultation with other government policy stakeholders. In addition, quantifiable and measurable targets should be set for each of these objectives, based as much as possible on baseline year data, and the availability of data sources to measure changes over time. For example, the Turkish SME Strategy and Action Plan 2015-2018 quantified its macro-level targets as such: Increasing SME exports to USD 150 billion; Increasing the number of exporter SMEs to 60 000; Maintaining the share of R&D expenditures of business sector SMEs at the level of 33%; and Employing 3 million new people within SMEs by 2018 (KOSGEB, 2015[6]).
Key performance indicators (KPIs) for each of the strategy’s policy pillars should also be developed (which was not consistently done in the 2017-2022 strategy and operational plan).
Thematic focus
National strategies are designed to address the specific concerns facing SMEs and entrepreneurs. The OECD’s review of SME and entrepreneurship policy frameworks across OECD countries identified commonalities in the range of policy areas addressed in their SME strategies. These include innovation, digitalisation, internationalisation, skills, access to finance, reduction of administrative burden, and sustainability (OECD, 2021[7]). The reviewed strategy documents indicate a strong focus on entrepreneurship as well as on actions to foster the competitiveness and productivity of existing SMEs. Recent national SME and entrepreneurship strategies also have a strong policy emphasis on digitalisation to improve SMEs’ market access and value chain integration and on greening technologies to address environmental challenges. For example,
In consultation with stakeholders, the new national SME and entrepreneurship strategy for Egypt should revisit the policy pillars of the previous strategy and make adjustments to reflect new realities in the Egyptian context. The goal of this sixth pillar would be to increase the utilisation of information and communication technologies and promote technology-based financial services. This is fairly well aligned with the thematic focus of SME and entrepreneurship strategies in other countries. In this regard consideration should be given to thematic emphasis on the following areas:
The digital transformation and technological development of SMEs, increased utilisation of ICT, digital tools, and the automation of industrial SMEs to enable them to compete in the Industry 4.0 environment.
The greening of SMEs to support them in meeting the environmental and greening standards of potential markets.
Access to markets, including: i) building the capacity and skills of SMEs for exporting their products and improving their access to global markets (e.g. adoption of e-commerce, trade-readiness)5; ii) improving the integration of SMEs in local and global value chains; and iii) preparing the readiness of SMEs to participate in the public procurement market.
Enhanced policy directions and actions for improving the business management skills of existing SMEs and upgrading the skills of SMEs’ workers.
Integrating informal enterprise into the formal economy.
Access to financing, including alternative financing sources and fintech options, and enhanced financial literacy.
Fostering the culture of entrepreneurship and supporting the development of innovative start-ups.
There are also still many laws and regulations that hinder (or even contradict) the effective implementation of the MSMEs Law. The Egyptian Regulatory Reform and Development Activity (ERRADA) has identified areas that need to be addressed (ERRADA, 2023[8]), but the response to addressing these issues has been very slow. The new national strategy will therefore need to identify specific actions to improve the regulatory environment for SMEs and start-ups in Egypt.
Target groups
The new national strategy should strengthen the policy emphasis on high-potential start-ups. Although the 2017-2022 strategy did include policy objectives and actions to stimulate business start-ups, stakeholders continue to express concerns that the needs of start-ups are not being adequately addressed by policy initiatives (ERRADA, 2023[8]; RiseUp, 2018[9]). High-potential start-ups typically occupy a different demographic group than traditional start-ups and require distinctive policy attention, for example by simplifying laws and regulations, improving access to risk finance or providing incubation and mentoring services. It should also place a greater emphasis on women’s entrepreneurship (not only as a cross-cutting theme, but with more deliberate intent) and also on young entrepreneurs
Co-ordination and implementation
National SME strategy documents in OECD countries typically include a section outlining governance arrangements for the implementation of the strategy, noting the responsible ministries and agencies involved in policymaking and proposing intra-governmental (horizontal) and inter-governmental (vertical) co-ordination mechanisms to ensure policy coherence (OECD, 2021[7]). While Egypt’s 2017-2022 National MSME and Entrepreneurship Strategy made clear that MSMEDA would be responsible for its overall implementation, the operational plan did not specify the responsible entities or timelines for the implementation of specific tasks and activities. It also did not outline the mechanism to be used by MSMEDA in co-ordinating the delivery of the various tasks and activities and for monitoring progress in the implementation of the strategy. The new national strategy should address these issues and include a description of the governance structure for its implementation.
The new strategy should also include provision for a mid-term review of its implementation status, and a final evaluation, which would include a complete stock-taking of its implementation performance.
MSMEDA is the designated public entity for SME development and its policy co-ordination
Since 2017, MSMEDA has been the designated public entity responsible for SME and entrepreneurship development in Egypt and the co-ordination of national SME and entrepreneurship policies. MSMEDA was initially established by Prime Ministerial Decree Number 947/2017. An amendment to the Decision (Decree No. 2370/2018) brought MSMEDA under the direct supervision of the Prime Minister. MSMEDA is governed by the MSMEDA Board, which is chaired by the Prime Minister and comprised of six ministries (ministers of Industry, Investment and Foreign Trade, Finance, Planning and Economic Development, International Cooperation, Communications and Information Technology, and Local Development), the Governor of the Central Bank of Egypt (CBE), the Head of the Financial Regulatory Authority (FRA), and five specialists in relevant fields.
MSMEDA’s mandate includes responsibility for SME policy and strategy development and the design, execution and co-ordination of SME and entrepreneurship support programmes. It also covers the monitoring and evaluation of the SME sector’s performance as well as legislative and regulatory oversight, particularly in relation to the streamlining of licencing procedures for start-up activity. In addition, MSMEDA is responsible for implementation of the MSME Law 152/2020, making recommendations on all legislation and international treaties relevant to the provisions of the MSME Law, and advising on all legislative matters on subjects covered by the law.
Recent changes in Egypt’s governance structures have drawn a clear distinction between SMEs and entrepreneurship in policy development, which must also be taken into consideration in the policy co-ordination issue. In June 2023, the government established a Permanent Entrepreneurship and Start-ups Unit in the Egyptian Cabinet to propose appropriate policies, laws, and regulations to improve conditions for start-up companies and their growth trajectory. The unit, which is chaired by the executive director of the General Authority for Investment and Free Zones (GAFI), includes representatives from MSMEDA, GAFI, five ministries (Supply and Internal Trade, Planning, Economic Development and International Cooperation, Finance, Communications and Information Technology, and Industry, Investment and Foreign Trade), the Central Bank of Egypt (CBE), and the Financial Regulatory Authority (FRA). The Permanent Unit is responsible for co-ordination between the concerned entities in order to create a conducive environment for start-ups in Egypt, develop solutions to their legal and procedural challenges, build capacities to provide technical support to start-ups and supporting entities, and provide a platform to respond promptly to the complaints of start-ups.6 The Unit reports to the Prime Minister on the results of its work on a quarterly basis, along with recommendations and proposed implementation mechanisms and is currently in the process of developing a national start-up strategy. The relationship between MSMEDA and the Permanent Unit has to date been very positive, a favourable condition for their future policy co-ordination roles. Otherwise, there will likely be a considerable amount of confusion in the public domain regarding policy support for SMEs versus policy support for start-ups. In this regard, MSMEDA is taking steps to create a clear framework for the co-operation and co-ordination between the relevant three parties.
The institutional framework for MSME and entrepreneurship development in Egypt is fragmented across multiple institutions
SME and entrepreneurship policy is horizontal, transcending the scope of any one ministry or agency. Important issues for MSME and entrepreneurship development that lie outside the mandate of the ministry or agency responsible for SMEs include taxation, regulatory affairs, employment, education, digital transformation, science and technology, innovation, international trade, and public procurement. The ministries or agencies with responsibility for these different areas vary among countries, but the implication is clear: managing a national MSME and entrepreneurship policy agenda requires inter-ministerial co-ordination. The main purpose of this is to ensure policy coherence in the design, development and implementation of the MSME and entrepreneurship policy framework and to mitigate the risks of fragmentation, duplication, and gaps.
In the case of Egypt, although MSMEDA is the main government entity responsible for SMEs, many other ministries, agencies and governmental bodies also implement polices and measures to support MSME and entrepreneurship development. Table 4.1 provides an overview of these governmental institutions. Some of these entities have authority over one type of support and/or a specific sector(s), while others have a general overarching authority. Co-ordinating the policy measures and actions of these diverse government entities – as well as those of international co-operation partners and donors – is essential in supporting MSME and entrepreneurship development in Egypt.
Egypt is taking positive steps to facilitate horizontal policy coherence and co-ordination
The approach to promote SME and entrepreneurship policy co-ordination and oversight often adopted in other countries is to establish an inter-ministerial SME and entrepreneurship council represented by key ministries relevant to the SME and entrepreneurship policy agenda. The composition and size of the council will vary by country depending on the implicated roles of specific ministries, but the general mandate of these councils is to formulate policies and plans for the development of SMEs and entrepreneurship across government, as is the mandate of MSMEDA in Egypt. Commonly, this includes setting the broad policies, strategic directions and policy measures for an integrated, co-ordinated effort, and annual reporting of the results of policy implementation based on the monitoring of policy measures.
In September 2024, the Prime Minister of Egypt issued a decree for the establishment of a Ministerial Group on Entrepreneurship, outlining its structure and objectives. Its primary mission is to foster entrepreneurship, enhance the capacity of start-ups and bolster Egypt’s entrepreneurial landscape to achieve sustainable and accelerated growth. The goals of the Group include co-ordinating government efforts to implement supportive policies for start-ups, maximising the local economy’s benefit from these new enterprises as a driver of rapid growth, assisting start-ups in accessing international markets, and linking innovative solutions provided by new businesses to sectoral challenges. The Group also aims to address the migration of entrepreneurs outside the country by supporting female and young entrepreneurs and backing their start-ups.
The Ministerial Group, chaired by the Ministry of Planning, Economic Development and International Cooperation, includes the ministers of Communications and Information Technology, Higher Education and Scientific Research, Supply and Internal Trade, Investment and Foreign Trade, and Finance, the CEO of MSMEDA, and representatives from the Ministry of Industry, the Central Bank of Egypt and the Financial Regulatory Authority. It is responsible for approving a co-ordinated framework and a mechanism for its implementation and follow-up, creating and managing joint programmes to support start-ups with resource and expertise from different ministries, and proposing policies, laws, and regulations to achieve its main objectives. It will also ensure alignment among government activities and initiatives to prevent policy and legislative conflicts.
The Ministerial Group on Entrepreneurship does not focus on SME development per se, although its policy support for a more favourable entrepreneurship environment and for innovative and growth-oriented start-ups will, in the medium- and longer-term, lead to a stronger and more competitive SME sector. With respect to inter-ministerial governance of the SME development policy agenda, the representation of key ministries on the MSMEDA Board of Directors may be viewed as an alternate approach.
However, the focus of the board is directed primarily to the undertakings of MSMEDA a policy implementation and delivery entity in line with the government’s overall policy priorities for SME development, e.g. the MSMEDA strategy and action plan. The membership of the Board may need broadening to have a sufficiently representative membership of all relevant ministries to drive an integrated whole-of-government approach to the national policy agenda for SME development.
…at the same time, MSMEDA’s policy co-ordination role needs strengthening
MSMEDA has the dual roles of policy delivery and policy co-ordination. Its organisational structure has historically reflected a much stronger emphasis on the former, with the MSMEDA Head Office relatively well-structured for delivering its own corporate strategy and implementing policy measures over which it has organisational control, such as the programmes and services of the MSMEDA Regional Offices and one-stop shops. On the other hand, MSMEDA would in the past have benefitted from more resources and greater authority to fulfil its policy co-ordination role across national public institutions. To address this, MSMEDA has established a new Central Sector for Policies and Legislation within its organisational structure. The formation of this sector has been approved by the Board of Directors headed by the Prime Minister, in accordance with the growing importance attached to policy formulation and national co-ordination. One of the fundamental mandates for this new sector is to formulate policies and guide the implementation process regarding the national strategic directions. It is responsible for all functions related to the co-ordination of the MSME system, as well as for policy development and assessments.
The establishment of the Policies and Legislation sector is an important step towards strengthening MSMEDA’s policy co-ordination function. It is critical to ensure that the sector is resourced with sufficient officers to assume responsibility for cross-government policy co-ordination, policy monitoring, and annual reporting on performance results.
Different options could be considered to further enhance MSMEDA’s capacity to fulfil its cross-government co-ordination role. In some OECD countries, the approach is to establish a Technical Working Group within the ministry or agency responsible for SMEs and entrepreneurship. This group is comprised of working level officials from within the membership of the inter-ministerial council (OECD, 2021[10]). In Türkiye, for example, the Small and Medium Enterprises Development Organisation (KOSGEB) is responsible for the co-ordination and implementation of the SME Strategy and Action Plan (SSAP) under the guidance of the inter-ministerial SSAP Steering Committee chaired by the Ministry of Science, Industry and Technology.7 The Steering Committee is responsible for co-ordinating the SSAP, taking overall steering decisions, providing direction to and approval of the SSAP, and monitoring the implementation of the SSAP. At the technical level, KOSGEB has established a working group of concerned ministries and agencies to assess the operating environment for SMEs, determine strategic focus areas and targets, and consider proposals for actions and projects to be executed in line with these focus areas and targets. The resulting SSAP presents an integrated action plan with various ministries and agencies accountable for delivering on designated actions/projects. Entities responsible for actions/projects within the scope of the SSAP prepare and submit to KOSGEB a twice-yearly progress report for each action/project in the format established by KOSGEB, which KOSGEB consolidates into an integrated progress report for review by the SSAP Steering Committee.
Another option used in some countries is for the ministry or agency responsible for SMEs to promote the establishment of focal point representatives within entities implicated in the development and delivery of SME and entrepreneurship policy measures. For example, in Malaysia, special SME Units have been established in each of the ministries and agencies involved in SME development (17 ministries and more than 60 agencies), which work collectively with the central agency for SMEs on policy and programme integration and delivery.
In the Egyptian context, many ministries and agencies have established Entrepreneurship and Innovation Units that may be potential focal points for MSMEDA in its policy co-ordination efforts, such as GAFI, the Ministry of Industry, the Ministry of Planning, Economic Development and International Cooperation, the Ministry of Investment and Foreign Trade, the IMC, the Export Development Authority (EDA), the Technology Innovation and Entrepreneurship Centre (TIEC), the Academy of Scientific Research and Technology (ASRT), and ERRADA. MSMEDA would then organise monthly or bi-monthly group sessions with the focal points to work on co-ordination and monitoring issues.
The government of Egypt consults extensively with private sector stakeholders when it is designing national development plans, such as the Egypt Vision 2030 strategy and strategic directions for the Egyptian economy, or proposing business environment reforms, including legislative or regulatory changes. MSMEDA consults with the private sector on SME and entrepreneurship policy issues on an ad hoc basis, primarily during the process of developing the national strategy and action plan. These stakeholders would include the Federation of Egyptian Industries, Alexandria Business Association, Federation of Egyptian Chambers of Commerce (FEDCOC), Egyptian SMEs Association, Businesswomen of Egypt 21 Association, the Egyptian Young Entrepreneurs Network, and possibly the Federation of Egyptian Banks, and Egyptian Federation for Financing Medium, Small and Micro Projects. Other stakeholders, such as Endeavor Egypt, the AUC Centre for Entrepreneurship and Innovation, Flat6Labs accelerator, and others may also be consulted. However, there is no formal or regularised mechanism for consulting with or seeking feedback from private sector SME stakeholders.
Consultations between international donors and government and non-governmental organisations may take place through the SME donor co-ordination group. Exchanges via this group occur more regularly than the private sector consultations yet remain variable in terms of frequency. While the donor co-ordination group is focused on exchange among international co-operation partners and donor organisations who are funding or delivering SME and entrepreneurship programmes, government actors and quasi-government actors, such as MSMEDA, and private sector actors are often invited to participate in the co-ordination group meetings.
Although government ministries and MSMEDA do have some consultation procedures in place, it would be beneficial to create more formal and regular mechanisms for public-private sector dialogue. This would enable the views of entrepreneurs, business owners and other private sector actors to be more consistently incorporated within the policymaking process. Many OECD member countries have established SME and entrepreneurship advisory committees as a means of facilitating a more structured public-private dialogue with the private sector, notably SME associations. The membership of these committees is generally broad and includes chambers of commerce and industry, small business associations, business support organisations, SME financing institutions, business leaders, and independent experts (OECD and UNIDO, 2004[11]). These committees are generally tasked with examining the implementation of the SME and entrepreneurship policy framework, reviewing current policies, strategies and plans, advising on new strategies and interventions, and providing feedback on the institutional landscape to express how the delivery of supports to SMEs and entrepreneurs could be made more efficient and cost-effective. The SME advisory committee can also help to identify emerging SME and entrepreneurship issues and suggest measures that could be implemented to mitigate the issues. For example, the German Federal Ministry of Economic Affairs and Energy established an SME Advisory Board to advise the Minister on the likely impact on SMEs of structural changes in the domestic and global economy, to analyse the effects of domestic economic policies on the SME sector, and to provide ideas on general SME-related issues; in Chile, the Smaller Companies Advisory Council plays an advisory role on SME policies to the Ministry of Economy, Development and Tourism; and in Ireland, regular formal consultations are held with SMEs through the Advisory Group on Small Business, chaired by the Minister of State for Enterprise, Trade and Employment (OECD, 2021[7]). The Ireland Department of Enterprise, Trade and Employment also makes use of online consultations to seek input from SMEs on its draft strategy documents.8
To enhance the current mechanisms for consulting with private sector stakeholders, MSMEDA should consider creating an MSME Advocacy Group that is inclusive of SME and entrepreneur associations, such as the SME associations and the Youth Entrepreneurs Association, in addition to the Federation of Egyptian Industries, FEDCOC and other relevant bodies. This would help to formalise the current ad hoc consultations and thus regularise dialogue with the private sector.
Such an MSME Advocacy Group would complement the Advisory Council established by the Permanent Unit on Entrepreneurship and Start-ups at GAFI, which is comprised of private sector experts and specialists from the entrepreneurial ecosystem. The Advisory Council has been formed to assist the Permanent Unit in achieving its primary goal of proposing policies, laws and regulations conducive to the growth and prosperity of start-ups in Egypt. During the first meeting of the Advisory Council in June 2024, it reviewed all results of the Unit to date and tasked with preparing a comprehensive action plan to be presented to the Unit.
One of the main challenges in managing SME and entrepreneurship policies across government is ensuring that the set of selected programmes and projects is the most appropriate for meeting strategic objectives, and that available budget resources are directed to the activities with the greatest returns on public investment. A policy portfolio analysis is a useful tool for meeting these challenges. The premise of this approach is that SME and entrepreneurship policy measures can best be seen not as standalone measures but instead as part of a broad portfolio of different programmes, each with strategic objectives that are in line with the government’s current policy priorities.
An SME and entrepreneurship policy portfolio analysis considers the distribution of government spending by the main policy areas (e.g. entrepreneurship training, market and export development, innovation, access to finance, etc.) and by the main targeted populations (e.g. potential and nascent entrepreneurs, new start-ups, micro enterprises, innovative SMEs, etc.). It sheds light on the weighting of policy support towards different instruments or targets. This in turn helps in clarifying whether government spending on SME and entrepreneurship policy is balanced (e.g. an over concentration in one category versus another), given the policy framework priorities, and addresses the main development challenges faced by SMEs and entrepreneurs over the enterprise life cycle. It is also helpful in clarifying to government-wide actors where policy effort is being focused and in comparing results across activities. In conjunction with programme monitoring and evaluation, it can also help to channel public spending into the most beneficial measures. For example, undertaking evaluations of the key programmes to determine their cost effectiveness can assist in determining the appropriateness of the budget allocation across the portfolio.
In practice, the policy portfolio approach entails an analysis of all SME and entrepreneurship policy measures, broken down by policy category and stage of SME and entrepreneurship development.9 This can be represented as a matrix of cells, which can be adapted to the country’s particular policy context. A sample portfolio framework is provided in Table 4.2.
To populate this matrix, the first step is to identify all relevant policy measures and programmes. This requires a mapping of the SME and entrepreneurship-related instruments of all public entities working on SME and entrepreneurship issues, according to the main policy category, target beneficiary, and budget allocation of each instrument. This mapping is dependent on the co-operation, input, and verification of all public entities as part of a collaborative and integrated effort.
Each policy or programme is then be assigned to the most appropriate cell of the matrix, depending on the policy category and targeted enterprise segment. Each cell of the matrix is filled in with the cumulative total budget or expenditure of all programmes assigned to that cell. For example, the value in cell 1A of the matrix above would represent the total budget or expenditure for all policies and programmes that provide education and training or human capital development to pre-nascent entrepreneurs. The subsequent analysis of the completed matrix can help to increase transparency in the allocation of the budget portfolio and identify where there are relative gaps in policy support, and where a reallocation of resources could improve the performance of the policy portfolio and the return on government’s budget investments.
By way of example, a policy portfolio analysis undertaken in the framework of the OECD Review of SME policy in Thailand revealed gaps in the funding of projects related to the pre-nascent, start-up and enterprise growth stages, as two-thirds of the budget expenditures (excluding financial assistance programmes) was directed to existing MSMEs. It also revealed that the bulk of the SME Development Agency’s total project budget (again excluding finance measures) was spent on education and training, with considerable gaps in the internationalisation stage and in technology and innovation support. Gaps in addressing the needs of start-ups and the growth-phase of existing SMEs were identified as requiring further attention by the government and have since been responded to.
Limited information is available to conduct an SME and entrepreneurship portfolio analysis in Egypt
A fully-fledged policy portfolio analysis in Egypt is hindered by three main factors:
1. Although the MSMEs Law stipulates that the government will allocate up to 0.3% of GDP annually (and not less than EGP 1.5 billion) for the purpose of supporting the development of SMEs, to date, there has been no accounting of the budget allocation to SME and entrepreneurship policy support and how the budget is distributed.
2. A portfolio analysis requires a mapping of the SME- and entrepreneurship-related policy instruments of all public entities delivering SME and entrepreneurship interventions. This mapping should cover the objectives, beneficiary focus, and budget allocation of each instrument. Such an assessment therefore requires a collaborative effort involving all public entities. Until recently, other ministries/agencies were not directed to report to MSMEDA on their programme activities or expenditures to support SMEs, leading to a co-ordination and information-sharing failure.
3. A significant amount of funding for SME and entrepreneurship support measures and programmes comes from donor funding, and not from a government budget allocation. MSMEDA, for example, does not receive an allocation from the government budget. It reports self-sufficiency in its operational funding based on the fee revenue from the one-stop-shop services and interest rates earned from its lending activity, and its programme funding is largely secured by grants and credit lines from international co-operation partners.
As the designated co-ordinating body for SME policy, measures, and programmes in Egypt, MSMEDA would need to take the following steps to overcome these challenges and facilitate a policy portfolio analysis:
1. Ensure that the new National MSME Strategy reflects the integrated set of policy actions from all relevant public entities, according to the strategy’s thematic pillars. The strategy should present an integrated action plan with input from the Egypt Entrepreneurship and Innovation Centre (EEIC), MPEDIC, GAFI, the Ministry of Industry, the EDA, the ITIDA and TIEC, the IMC, the CBE, NilePreneurs, and other relevant entities.
2. Secure the commitment of relevant public entities to provide MSMEDA with information and data on the implementation of their SME and entrepreneurship policy measures. This data should be broken down by target group and type of policy support (e.g. entrepreneurship training, export training, business advisory and consultancy services or cluster programmes). It should also include planned and actual budget expenditures and sources of funding (e.g. the government budget or a donor organisation).
3. Prepare a portfolio analysis matrix (see Table 4.2), which includes the different categories of policy support.
4. Populate the matrix with information from the relevant public entities on programme type, budget expenditures, target groups and number of beneficiaries. Totaling the columns and rows of the analysis matrix would then determine the indicated priorities by target group and category of policy measures. From this, inferences can be drawn on, for example, the emphasis on start-ups versus existing SMEs, or the existence of gaps in policy support.
Adopting the policy portfolio approach would provide the foundation for effective monitoring of the implementation of the policy and actions within the national SME and entrepreneurship strategy.
This section outlines and assesses the delivery arrangements for SME and entrepreneurship policy measures and programmes in Egypt. The large number of government and public-supported entities involved in delivering policy measures is illustrated in Figure 4.1. Detailed descriptions and assessments of the SME and entrepreneurship support programmes can be found in the SME and Entrepreneurship Programmes chapter of this report.
Delivery of business support services
In any country, an organisational structure is needed for the delivery of business support services and programmes to SMEs and entrepreneurs at the national and local levels. Governments generally take two approaches. In some cases, the ministry or agency responsible for SMEs will operate a network of government-run regional offices to deliver information and advisory services. In other cases, and sometimes simultaneously, governments will work through public, private and/or non-governmental intermediaries. This second approach can be effective in extending the reach of SME assistance to local communities and particular target groups, such as women and youth.
Business support services in Egypt are delivered by a number of different public institutions via information, advisory and support centres. These include:
MSMEDA’s regional office network and one-stop shops for business registration and licensing.
The CBE’s network of 116 Business Development Support Hubs located in banking branches, youth centres and universities (operated through the NilePreneurs Programme), which have a primary focus on young Egyptians offer non-financial advisory and consultancy services to young entrepreneurs, start-ups and SMEs.10
The Women Business Development Centres, with focal points located in the branch offices of the National Council for Women, which focus principally on women entrepreneurs.
GAFI’s Fekretak Sherketak (Your Idea, You Company) Centre, Investor Services Centre and one-stop shops for business registration and licensing for enterprises registering under the Investment Law.
In addition, the Industrial Modernization Centre (IMC) provides services to industrial SMEs with more than 10 employees.
MSMEDA Regional Offices
MSMEDA manages a major service delivery network that provides information and assistance to SMEs and entrepreneurs, with 33 offices across 27 governorates in addition to MSMEDA’s mobile units, which play a crucial role in extending services to remote areas. MSMEDA assumes a dual role through these offices, acting as co-ordinators for service delivery from partner organisations and providing direct services such as financial or business development support. This practice, which is followed by other countries with a widely dispersed population over a large geographic area, improves the accessibility of the service offerings. MSMEDA’s service delivery network conducts its activities in co-operation with over 600 NGOs and over 1 900 bank branches. The regional offices contract out the delivery of more sophisticated training and consultancy services to private entities locally.
MSMEDA’s regional offices are staffed by up to 25 employees in the case of the 16 class A offices (see Table 6.8). These staffing complements include staff working in the one-stop shops for business registration and licencing, which delivered more than 580 000 services between July 2014 and October 2023 (MSMEDA, 2023[12]). Each office has an SME Finance Unit, which typically includes lending officer/s, a training officer, and a consulting officer. Regional office staff provide information, basic guidance, and entrepreneurship training to local SMEs and entrepreneurs, as well as technical and market support and all services or incentives under the MSMEs Law. Additionally, the offices organise internal and external exhibitions and provide a variety of free marketing and advisory services to SME owners.
In terms of training, MSMEDA is supported by a team of certified trainers, some of whom are accredited by international bodies such as the ILO or/and UNIDO. For example, MSMEDA staff have received training from the International Labour Organisation (ILO) on delivering the Start and Improve Your Business training programme11.
The Central Bank of Egypt NilePreneurs BDS Hubs
The Central Bank of Egypt (CBE) has supported the establishment of 110 Business Development Services (BDS) Hubs inside CBE partner bank branches, youth centres and universities in 24 governorates. The primary aim of these hubs is to support entrepreneurs by raising awareness on the fundamentals of enterprise development, facilitating financing through co-ordination with funding institutions, and reinforcing SMEs’ competitiveness and export capacity. Specifically, they aim to support youth who want to start their own business to choose a project that is appropriate for their capabilities, help them in developing their innovative ideas into feasible projects, and provide financial and banking literacy. The hubs work under a unified brand image, internal work procedures manual, and operating system and are staffed by up to three advisors, depending on the size of the hub. The BDS Hubs make use of over 150 certified advisors to work with the beneficiaries, with the costs covered by the hubs. The services provided by the hubs could be complementary to those offered in the MSMEDA regional offices. As such, there would be merit in co-locating BDS Hubs in the MSMEDA regional office facilities.
Women Business Development Centres
Located in the National Council for Women’s branch offices in each governorate, the Women Business Development Centre focal points provide business development services to women wishing to establish a business. These services include technical skills and entrepreneurship training, marketing and advisory services, mentoring, and consulting services. The consultancy services make use of external specialists in various sectors to provide the necessary technical support for product development. The centres also promote networking opportunities for women with other agencies that provide business development services, provide information related to business development, and organise seminars, workshops, and local events.
GAFI Fekretak Sherketak (Your Idea, Your Company) Centre and Investor Services Centres
The General Authority of Investment and Free Zones (GAFI), has launched multiple nationwide initiatives to support entrepreneurship in collaboration with other public and private sectors. The Fekretak Sherketak Centre promotes the entrepreneurship culture and offers comprehensive support packages to start-ups at different stages of the enterprise life cycle (e.g. workshops and educational seminars, technical support, advisory, and counselling services to help young entrepreneurs develop and transform their business ideas into viable projects, legal advice on the appropriate legal form for the business and the documents and procedures required to establish companies). The Centre also connects the entrepreneurs with relevant financial entities, accelerators and business incubators. In maximising its support for entrepreneurs, the Centre co-operates and co-ordinates with various institutions and entities that support the entrepreneurship environment in Egypt.
The 14 GAFI Investor Services Centres provide services to all investors in implementation of the provisions of Investment Law No. 72/2017 and help entrepreneurs obtain all necessary approvals to fast-track the establishment of businesses.
The Industrial Modernization Centre
Operating from 15 branches in 12 governorates, the objective of the Industrial Modernization Centre (IMC) is to deepen and modernise Egypt’s industrial sector. Industrial SMEs with 10 or more workers, including SMEs in heritage and creative industries, are the target group for the IMC, which makes wide use of external consultants to deliver many of its services.
Delivery of innovation and technology supports
The delivery of policy supports for innovation and technology is concentrated in three public institutions, each with a different target group (see Figure 4.1, Panels A and B):
The Ministry of Industry, which targets industrial SMEs through 12 sector-focused Technology and Innovation Centres. These centres provide technical assistance and a variety of other services.12
The Ministry of Communications and Information Technology (MCIT), which targets SMEs and entrepreneurs in the information technology (IT) sectors via the Information Technology Industry Development Authority (ITIDA). ITIDA is the executive information technology (IT) arm of the MCIT, working to develop the local IT industry by identifying its needs and addressing them with bespoke programmes, policy advice, and the provision of strategic advisors. The Technology Innovation and Entrepreneurship Centre (TIEC) is the implementing affiliate of ITIDA. TIEC is therefore a key actor in delivering policy support for innovative entrepreneurs and start-ups in the IT sector, including training, consultancy, incubation and acceleration, co-working spaces, and networking. It is dependent on government funding from ITIDA, which receives 2% of the revenue from the National Telecom Regulatory Authority through a special tax on ICT companies. TIEC also implements the ITIDA Innovation Cluster Initiative.
The Ministry of Higher Education and Scientific Research (MHESR) targets entrepreneurs and innovators in university environments, with a focus on supporting the commercialisation of research and development (R&D) projects. The MHESR delivers its policy support through three entities:
The Academy of Scientific Research and Technology (ASRT), which is the national think tank on science, technology and innovation. It works to foster the transfer of innovative technological ideas into commercialisable products and start-up companies. By providing grants to universities for innovation and entrepreneurship programmes, the ASRT also plays a leading role in creating awareness of entrepreneurship and innovation among university students.
The Science, Technology and Innovation Funding Authority (STDF), which provides funding for scientific research and technology development. It offers a competitive grant-based programme to assist start-ups and fledgling entrepreneurs in the commercialisation of research results through the STDF incubator programme.
The Innovators Support Fund (ISF), which was launched in 2019 and is delivered by the STDF. The ISF helps bridge the gap faced by innovative start-ups in financing their developmental, pre-market stages prior to being able to attract venture capital. The ISF also builds the capacity of universities in setting up Technology Transfer Offices and developing intellectual property policies.
Delivery of supports for SME exporters
The primary policy delivery agency for SME exporters is the Export Development Authority (EDA) (see Figure 4.1, Panel C). The EDA offers specialised training and technical assistance to build the export capability of Egyptian enterprises. It also disseminates relevant information and facilitates business-matching opportunities. Its efforts are complemented by those of the Egyptian Exporters Association (EEA), with which the EDA works closely. Other important policy delivery entities in this area include the Ministry of Industry’s Foreign Trade Training Centre (FTTC), which provides export-readiness training for SMEs exporters13, and MSMEDA, which supports SMEs’ participation in trade fairs and exhibitions and provides export capacity building training in co-operation with the FTCC. In 2024, MSMEDA established a new Export Department to strengthen its scope of support to the export development of SMEs.
Delivery of finance supports
Public policy support aimed at improving SMEs’ access to bank financing primarily stems from the regulatory regime set by the Central Bank of Egypt (CBE). Meanwhile, the Financial Regulatory Authority (FRA) has taken numerous measures to enhance SMEs’ access to microfinance. Further information on these initiatives can be found in the Business Environment chapter of this report. In addition to the two main regulatory entities (the CBE and the FRA), there are other public entities that deliver direct financial supports to SMEs and entrepreneurs in Egypt:
Credit Guarantee Company: Regulated by the CBE, the Credit Guarantee Company (CGC) is Egypt’s sole guarantee scheme. The CGC’s major shareholders are the CBE and six Egyptian banks. The CBE provided an initial support to the CGC by establishing a EGP 2 billion guarantee trust to cover part of the credit risk guarantee associated with bank lending to existing and newly-established SMEs and start-ups and by issuing regulations providing special treatment for CGC guarantees. The CGC offers guarantee products for micro enterprises (Small and Emerging Businesses Programme) and for SMEs (Small and Medium Enterprises Programme, targeting industrial, service, agricultural and healthcare sectors).
MSMEDA: MSMEDA plays a key role in SME lending by entering into extended credit line contracts with participating (mostly state-owned in addition to private) banks to relend to SMEs and target groups. This is often facilitated by the allocation of funds to MSMEDA from international co-operation partners and donor organisations for channelling through the banking system. MSMEDA also lends money to non-bank financial institutions (mostly the Category C NGOs, but also to factoring and leasing companies) for relending to SMEs. It further conducts direct lending through the MSMEDA regional office network to vulnerable target groups of unbankable borrowers (e.g. young entrepreneurs, women entrepreneurs, SMEs with higher-risk projects). This direct lending cannot exceed a certain percentage of the total MSMEDA portfolio in 2022, MSMEDA provided less than EGP 1 billion in direct lending to 2 380 SMEs. Another recent policy initiative is the establishment of the MSMEDA first Egyptian Fund of Funds in 2021. The aim of this programme is to provide equity financing to private sector venture capital firms for reinvestment in innovative and high potential start-ups and SMEs
Egypt Ventures: The government has made some recent strides in supporting venture investments, including through the establishment of Egypt Ventures in 2017. Egypt Ventures is an investment firm seeded by the former Ministry of Investment and International Cooperation (now under the Ministry of Planning, Economic Development and International Cooperation) to support and invest in technology-based start-ups. Egypt Ventures applies a blended finance model through which investments are directed into accelerators, venture capital firms, and start-ups at the early and growth stages.14
NCLUDE Venture Fund: In 2022, three of the largest state-owned national banks launched the NCLUDE Venture Fund (initial investment of USD 85 million) to support young innovative entrepreneurs in fintech and fintech-enabled sectors.
Delivery of SME and entrepreneurship supports through incubators and accelerators
Incubators and accelerators are an important policy delivery tool, providing a pathway for aspiring entrepreneurs to transition from entrepreneurship training programmes to more intensive support to refine their business plans and projects and become investor- and market-ready. Although the number of business incubators and accelerators has been increasing rapidly, the Government of Egypt does not yet have a national business incubator policy. The TIEC is paramount among public institutions in the offer of incubation support, operating Start-up Launch Pads, pre-incubators, and the StartIT incubator. There are, however, other prominent public incubators, such as the FINTEKRS pre-accelerator, initiated by the CBE, which targets high-potential entrepreneurs and start-ups with fintech and fintech-enabled solutions in governorates outside Cairo. Through the NilePreneurs initiative, the CBE also supports the development of university incubators.
The majority of business incubators and accelerators are concentrated in the Greater Cairo area.15 Although efforts have been underway to establish business incubators in different universities in governorates lacking such facilities16, much of the rest of the country is underserved.
Most of the nascent incubation and acceleration programmes, especially those based in university environments, function with limited financial and management capacity and know-how to completely design and effectively implement their programmes (African Development Bank, 2022[13]). There is a strong need to build the incubator management capacity, as well as to develop a co-ordination and collaboration platform for business incubator managers to support knowledge transfer and resource sharing. These issues are explored further in the SME and Entrepreneurship Programmes chapter of this report.
Fully developing the MSMEDA electronic MSME platform will create more transparency on the policy measures and support programmes available to SMEs and entrepreneurs
Disseminating information about relevant policy measures and programmes to SMEs, entrepreneurs and other stakeholders is an important role of an SME agency. This role is particularly significant in the Egyptian context, where the large number of support measures and their distribution across numerous ministries and agencies makes it difficult for SMEs and entrepreneurs to identify which organisational entities or support programmes could best meet their specific needs. In many instances, SMEs are also unaware of the business support institutions or find it difficult to obtain information on how to access the support.
Transparency and ease of access to information about the range of available supports could be substantially improved by creating a unified online business portal for SMEs and entrepreneurs in Egypt. This portal could also provide an effective referral source of information for supporting institutions in their dealings with SMEs and entrepreneurs. Unified online platforms are a major feature of policy delivery in many countries, complementing existing enterprise development centres in providing information to SMEs and entrepreneurs. These online portals often contain information on, for example:
Starting, managing, growing, and exiting a business.
The legal and regulatory requirements for starting or operating a business.
The procedures and available incentives for starting or operating a business.
Detail on the available assistance and support programmes to aid in each stage of the enterprise lifecycle, which may include access to support facilities (e.g. enterprise centres, incubators, technology parks), financing support, advisory services, training, and innovation and technology supports.
Until recently, MSMEDA’s online portal (www.msme.eg) has mainly provided information on MSMEDA’s own services and programmes. Since mid-2023, MSMEDA has been working on enhancing the portal by incorporating information on all authorities offering financial and technical assistance to SMEs, including government bodies, banks, NGOs and business providers. The aim of this initiative is to enable SMEs and entrepreneurs to remain updated on the availability of financial or technical supports, and to eventually compare the various services offered by these entities. This would create more transparency for SMEs and entrepreneurs and help them to find the “right” support organisation, service or programme to meet their needs.
Once the development of the enhanced portal is completed, MSMEDA should continue to work co-operatively with other ministries and agencies on an ongoing basis. This is necessary to ensure that the portal provides comprehensive information about support programmes, services, and organisations, as well as regulations and procedures surrounding starting and growing a business. Furthermore, the portal should ideally profile the support programmes by type, target group, delivery organisation and location. Notably, the MSMEDA portal should provide linkages to the GAFI electronic platform, underway since May 2024, which will showcase all services offered to entrepreneurs by government bodies, agencies and initiatives according to three phases: pre-establishment services, establishment services, and post-establishment services.
Developing a monitoring and evaluation (M&E) system is critical to effective tracking and measurement of the success of a strategy’s implementation. Its design enables the assessment of policy and policy measures against carefully designed policy objectives and allows for informed adjustments to be made where appropriate.
Monitoring of policy measures and actions is the first step in an M&E system. This involves a continuous exercise of record-keeping to track progress of the implementation of a programme or project, which, with periodic analysis and discussion, enables corrective action to be taken in a timely manner. The monitoring of a policy or programme involves tracking of the inputs (e.g. budget, resources) and the outputs (e.g. number of participants, take-up rates), and may collect the opinions of the programme managers, stakeholders and participants (OECD, 2020). At a minimum, monitoring efforts should address: the extent to which intended outcomes are being achieved; factors contributing to any lack of progress; the contributions of individual partnering organisations to the outcomes based on outputs generated by programmes, projects, or other actions; and lessons learned for wider sharing. Data collected as part of the monitoring process can be useful input in the evaluation process, however, the monitoring of programme inputs or outputs is not sufficient to identify the causal effects of a policy intervention on targeted businesses. Establishing causal impacts requires policy impact evaluation, such as by conducting a comparative analysis of the differences between the performance of assisted versus a control group of non-assisted entrepreneurs/firms. Box 4.2 presents the “six steps” framework of monitoring and evaluation methods. Monitoring activities are generally carried out internally by the government entity or entities. External evaluation consultants are generally engaged to perform the impact evaluations.
MSMEDA demonstrates adequate monitoring capacity for the programmes and services that it delivers…
MSMEDA relies on three mechanisms for monitoring and evaluating performance: i). monitoring conducted by its regional offices, ii). monitoring by an external company or association on the use and benefits of MSMEDA’s financial and non-financial services, and iii). analyses conducted by third-parties on the impact of service delivery.
Overall, there is adequate monitoring of the SME and entrepreneurship programmes delivered by MSMEDA. The MSMEDA Monitoring and Evaluation Unit monitors the implementation of agreements delivered through its regional offices, particularly during the first three months of delivery followed by annual monitoring for funded SMEs, through reporting and in-person site visits. The key performance indicators monitored are primarily output-related, such as the number of programme participants, the number of recipients of grants and other financial supports, the number of SME beneficiaries working with the regional centres, and budget expenditures. Results of monitoring at the agreement level are reported at various frequencies. The nature and extent of reporting to the central office of MSMEDA depends on the project and the implementing regional office. This can range from weekly, monthly and quarterly reporting periods. However, all initiatives follow an annual plan that is reported on at the central level. These findings are then internally communicated to the MSMEDA Board of Directors and to the Prime Minister. Some findings are publicly shared on the MSMEDA website, including for the Women’s Empowerment Programme.
Many ministries and public authorities also have a small, dedicated unit that monitors their activities. These monitoring efforts focus mostly on the take-up of certain policy measures and programmes.
The Six Steps methodology is a step-wise method to evaluating SME and entrepreneurship policies and programmes. The method provides a categorisation for different evaluation approaches that increase in reliability and sophistication, in which Step 1 is the least and Step 6 is the most sophisticated approach. The first three steps are considered more monitoring techniques. These steps rely on output indicators and the views of programme participants regarding the value of the intervention and the difference it made relative to the outcome if they had not participated in the programme. Surveys with the programme participants can be used to gather this information. Steps 4 - 6 are considered evaluation methods.
Monitoring
Step 1 – Take up of a programme
Step 2 – Recipients’ opinions
Step 3 – Recipients’ views of the difference made by the assistance
Monitoring information can help ensure that a programme is delivered to the intended recipients in an efficient manner.
Evaluation
Step 4 – Comparison of the performance of “Assisted” with “Typical” firms
Step 5 – Comparison with “Match” firms
Step 6 – Taking account of selection bias – through statistical procedures or use of Randomised Control Trials (RCTs)
Evaluation contrasts the views or actions of policy recipients with those of non-recipients in order to present the “counter factual”. The difference between actual changes and the “counter factual” is viewed as the impact of the policy – or its “additionality”. Step 5 evaluations aim to compare “treated” with “non-treated” firms by matching firms on observable factors, such as ownership, size, sector and geography. While the matching process helps to minimise the presence of unobservable variables, results can still be somewhat ambiguous. Step 6 evaluations take into account selection bias through the introduction of statistical procedures or the use of randomised control trials.
Source: (OECD, 2023[14])
…but impact evaluation of programmes remains limited
Some ministries and agencies have recently taken steps to improve their evaluation practices, including through upskilling those responsible for monitoring and evaluating public programmes through capacity building exercises as well as the introduction of more sophisticated evaluation techniques, such as randomised control trials. However, such initiatives have so far taken place on a limited scale. Overall, formal impact evaluations that assess how much a programme intervention has made a difference for recipients are rare within the Egyptian government. While programmes delivered by international donors often have strong monitoring and evaluation measures in place, including programme impact evaluations, there is a need to strengthen policy evaluation systems and better align national and local-level monitoring and evaluation approaches and activities. MSMEDA should work to specify in advance the objectives and targets for each policy measure introduced and look to evaluate all major SME and entrepreneurship policies and programmes every three years using reliable and robust evaluation techniques, defined as a minimum of Step 5 (as per (OECD, 2023[14])).
Inter-ministerial co-ordination on the monitoring and evaluation of SME and entrepreneurship policy could be more effective
Implementing a more formal monitoring and evaluation framework would serve to address a lack of harmonisation across data and definitions used by the many actors in the SME and entrepreneurship field. Moreover, inter-ministerial co-ordination in SME and entrepreneurship policy could be more effective, notably in monitoring and evaluating policy implementation.
There is currently no centralised department that has all the data for each unit working on SME and entrepreneurship activities. Data related to SME and entrepreneurship programmes are not unified as each entity has its own data system and platform. It is important to have a common language for outputs related to SME and entrepreneurship activities and programmes. Egyptian stakeholders report that data collection processes should be improved. Moreover, co-ordination between different actors involved in the monitoring and evaluation of policies and programmes remains limited.
As the entity responsible for co-ordination of SME and entrepreneurship policy in Egypt, MSMEDA also has an important role in following-up on policy and programme performance. MSMEDA could act as a centralised entity that has all the data for each SME and entrepreneurship programme that is delivered across the various actors. MSMEDA could then implement a suitable and reliable data collection system with harmonised definitions, indicators and monitoring and evaluation mechanisms. This would help reduce redundancy across the ministries and agencies and improve data available to evaluate policies and programmes.
On the other hand, it may be difficult for MSMEDA to gain the co-operation of other government or quasi-government actors in the provision of reporting data for monitoring purposes. To address this, MSMEDA could include a reporting requirement clause in the Service Level Agreements that are in place with relevant entities and implementing partners. In all cases, it is important that MSMEDA, particularly the monitoring and evaluation unit, maintain close relationships with all implementing partners.
Monitoring and evaluation of SME and entrepreneurship strategies and policies should be scaled up
With the recent establishment of a central monitoring and evaluation unit within MSMEDA’s Central Sector for Policies and Legislation, MSMEDA can implement a comprehensive and co-ordinated monitoring and evaluation framework to follow SME and entrepreneurship policies. This should include quantitative targets, milestones, inputs (e.g. budgets, management resources, project proposals), processes (e.g. provision of incubator space and other services), and outputs (e.g. performance of assisted enterprises in terms of survival rate, growth and profits). This would enable MSMEDA to co-ordinate the monitoring and evaluation of the SME and entrepreneurship policies and programmes that have been implemented by the different regional centres, ministries, and authorities.
This new monitoring and evaluation unit could also develop a management information system. This system should be capable of recording all project details and collecting and managing data for each of the initiatives and programmes related to SME and entrepreneurship development, including inputs, activities, outputs and outcomes. The tasks of the MSMEDA monitoring and evaluation unit could include:
Setting up a logic framework for monitoring key performance indicators for the policies and measures related to SME and entrepreneurship activity;
Collaborating with the various ministries and public agencies to collect information on missing baseline indicators;
Designing a recurring survey on MSMEs and entrepreneurship activities to monitor several KPIs;
Collecting data from delivery partners (e.g. regional centres, international donor projects, higher education institutions, etc.) in the implementation process;
Preparing an annual report on the state of SMEs and entrepreneurship activities and the implementation progress of the key measures as outlined in the policies.
Moreover, MSMEDA should assign a monitoring and evaluation unit with responsibility for the reporting and monitoring process of the MSMEs Law and any policies related to entrepreneurship and SME development. The unit could hold quarterly meetings with the MSMEDA Board of Directors to report on the implementation progress, including identification of which initiatives were ahead of or behind schedule. The unit could also develop a plan to carry out impact studies on the effect of relevant support programmes/projects on the performance of assisted entrepreneurs and SMEs. All input data and progress reports should be compiled for annual reporting on the implementation of the MSME Law and KPI outcomes for all entrepreneurship and SME programmes and services.
A report on implementation of the entrepreneurship and SME support programmes should be prepared annually with inputs from the relevant ministries and programme administrators. The report should present information on the state of implementation of the different policies and measures and the evaluation of these policies when applicable. The report should be delivered to the MSMEDA Board of Directors and the Prime Minister before being made publicly available on the MSMEDA website.
The case of Thailand provides an illustrative example of how an SME agency provides integrated reporting on the SME and entrepreneurship support offered by a range of government entities (see Box 4.3).
Description of the approach
As per the SMEs Promotion Act of 2000, the Office of Small and Medium Enterprises Promotion (OSMEP) is the authorised government agency to lead the formulation of policies and strategies to promote SMEs. In addition to providing support and assistance to SMEs through its One-Stop Centres, OSMEP acts as the focal agency of all government and private-sector entities involved in promoting SMEs, helping to co-ordinate and align their collective efforts. In particular, as responsible entity for the SMEs Promotion Master Plan and the SMEs Promotion Action Plan, OSMEP integrates the SME support activities of all relevant entities to ensure their activities are aligned with these wider SME promotion plans.
Annually, OSMEP monitors and evaluates the project performance of 25 agencies that implement SME promotion activities in accordance with the integrated plan for SME and entrepreneurship development. The OSMEP annual report provides details on the allocation of the SME Fund budget to various SME segments: early-stage enterprises; microenterprises; small enterprises; medium enterprises; and high-potential enterprises, by type of support (such as training, financing, consulting services, coaching, cluster network support and exporting support) (see (Office of the Promotion of Small and Medium Enterprises Promotion, 2021[15])). It also includes reporting on the number of SMEs making use of the SME One-Stop Service Centres, government-supported business incubators and cluster networks. This may be done more easily in Thailand because agencies that participate in the integrated MSME Promotion Plan and its implementation must report to OSMEP on how their SME budget was allocated.
Factors for success
The SME budget allocation of the Government of Thailand (based on an integrated SME Promotion Action Plan) is channelled through OSMEP, which then reallocates the budget to the various agencies delivering SME support programmes according to their action plan submissions to OSMEP. The participating agencies have an obligation to report back to OSMEP on the allocation of their SME budget with evaluation results.
OSMEP meets with designated focal points in the various government agencies during the process of formulating the SMEs Promotion Action Plan to gain information on their specific actions to contribute to policy objectives and strategies outlined in the Plan. Government agencies provide their reports to OSMEP on project activity, budget disbursements, and operating results through an intranet site (data.sme.go.th). From this data, OSMEP can report on the total budget disbursements for the year, and the total number of entrepreneurs and SMEs benefiting, according to the type of programme or service. The monitoring activity can also determine these results for each of the 25 agencies.
Obstacles encountered and responses
Initially, OSMEP experienced difficulties with gaining the co-operation of other ministries and agencies in providing reporting information on their SME support programmes, even though they were obligated to do this under the SME Promotion Act. The Act stated that any government agency or state enterprise involved in implementing the Action Plan on SMEs Promotion shall report the implementation results to the OSMEP Board at least once a year. To deal with the lack of responsiveness of some public entities to this stipulation in the Act, the Prime Minister has issued official directives to reinforce the Act.
Relevance for Egypt
An effective mechanism for collective monitoring and integrated reporting of project support to SMEs and entrepreneurs is not et in place in Egypt. In its policy co-ordination role, MSMEDA can benefit from the experience of other SME agencies and their lessons learned. The situation in Thailand is different from that of Egypt, which may make the task of policy co-ordination and monitoring more difficult for MSMEDA: the fact that the government of Thailand has a designated annual budget allocation for SME project support; that OSMEP has been co-ordinating the actions of government stakeholders for a longer time under the aegis of the National Board of SMEs Promotion (since 2001); and that OSMEP as an organisation is structured with adequate resourcing of a Policy and Strategies Unit (with an SME Policy and Planning Department), plus a Data and Information Department, and a Monitoring and Evaluation Department.
Source: For more information, see the OSMEP website: https://www.sme.go.th/en/.
Relative to the four OECD Recommendations on SME and Entrepreneurship Policy outlined in the introduction section of this chapter, Egypt could benefit from enhanced alignment with certain of these principles. First of all, improvements could be made in establishing effective governance structures to achieve alignment and co-ordination of SME and entrepreneurship policy across government entities. This could be done by setting up a comprehensive and well-structured inter-governmental co-ordination mechanism, reflecting the cross-cutting nature of SME development policies and the involvement of several government ministries, agencies and departments. The establishment of such a body better ensures effective communication and collaboration across institutions and reduces the potential for policy fragmentation. Apart from the establishment of MSMEDA as a co-ordination body for MSME and entrepreneurship policy, further actions would be needed to establish formal mechanisms for effective design and implementation of the national SME and entrepreneurship policy framework.
Secondly, employing a consultative process in developing the medium-term strategic framework for SME and entrepreneurship development (i.e. MSME strategy), which defines the priorities, goals, targets, key performance indicators, and clear responsibilities of different actors, can facilitate co-ordination among public institutions and is essential to monitoring progress and evaluating final results. MSMEDA is in the preliminary stages of formulating the new SME and Entrepreneurship National Strategy and Operational Plan. By consulting widely with stakeholder groups and reviewing the national policy agenda, there will be greater assurance that the implications for SMEs and entrepreneurs are considered across diverse policy areas as well as stronger buy-in from implementing bodies.
Thirdly, a robust monitoring and evaluation mechanism is essential for the systematic assessment of the impacts of policies and measures on SMEs and entrepreneurs. While MSMEDA has strengths in monitoring its own activities, its capacity to implement a robust monitoring and evaluation mechanism for the national SME and entrepreneurship strategy and operational plan would need development.
Adopting a portfolio approach to SME and entrepreneurship policy measures would aid in assessing how well programmes and supports align with the government’s priorities and identifying gaps and overlaps. To implement such an approach would require a system for co-ordinating the collection or programme and results data from all implementing bodies, a challenge that should be pursued by MSMEDA.
The SME and entrepreneurship support ecosystem in Egypt is quite well developed, with recent efforts to delineate the ecosystem, its actors, and its support offerings (African Development Bank, 2022[13])). However, due to the lack of an adequate co-ordinating mechanism between ministries, agencies, and private support providers, gaps may exist in the delivery of appropriate policy supports to meet the needs of SMEs and entrepreneurs at various stages of development. In fact, co-ordination failure is one of the major challenges in policy delivery arrangements and could be improved by adopting a more integrated approach to managing the entrepreneurial and innovation ecosystem.
Based on the assessment of SME and entrepreneurship policy governance and delivery arrangements, the following recommendations are proposed:
SME and entrepreneurship policy framework
Establish a mechanism for monitoring the implementation of the MSMEs Law and the take-up of its various incentives.
Finalise and implement the new National MSME Strategy, with full consultation and input from other ministries and agencies on policy objectives and targets and reflecting new challenges and priorities including digitalisation and greening, and evolving developments in innovation, trade, and technological opportunities for start-up entrepreneurs and growth-oriented MSMEs.
Policy co-ordination and monitoring mechanisms
Ensure appropriate staffing and resources within MSMEDA’s new Central Sector for Policies and Legislation for policy co-ordination, policy monitoring, and annual reporting on implementation of the new MSME strategy.
Establish a system in MSMEDA for ensuring full co-operation of ministries and agencies in the implementation and monitoring of the new MSME strategy, such as formation of a Technical Working Group, or assignment of SME and entrepreneurship “focal points” in each of the implicated ministries and agencies.
Policy dialogue with the private sector and stakeholders
Establish an MSME Advocacy Group that is inclusive of SME associations, such as the Young Entrepreneurs Network, the Federation of Egyptian Chambers of Commerce and the Federation of Egyptian Industries, in order to formalise and regularise dialogue with the private sector.
Policy portfolio analysis
Adopt a policy portfolio analysis approach in budgeting and monitoring of MSME and entrepreneurship policy measures and actions.
Policy delivery arrangements
Achieve complementarities and synergies in delivery of business support by co-locating BDS Hubs in the MSMEDA Regional Office locations.
Develop a national business incubator and accelerator policy that seeks to provide guidance on government-operated or supported incubator programmes and encourage the establishment of incubators in Egypt’s regions.
MSMEDA to continue to work co-operatively with other ministries and agencies to fully develop a comprehensive and all-inclusive MSME policy and programme web portal.
Monitoring and evaluation
Undertake monitoring and evaluation of the SME and entrepreneurship policy agenda.
Implement a data collection system with harmonised definitions, indicators and reporting mechanisms, in order to improve data availability for monitoring and impact evaluations.
Prepare an annual report on the implementation of the MSMEs Law, with inputs from the relevant ministries and programme administrators.
References
[13] African Development Bank (2022), Entrepreneurship in Egypt: Ecosystem Overview 2022.
[8] ERRADA (2023), Recommendations on a study to improve the Startups Ecosystem in Egypt (unpublished).
[6] KOSGEB (2015), SME Strategy and Action Plan 2015-2018 – SSAP.
[3] Ministry of Planning and Economic Development (2022), Egypt Vision 2030: Updated National Agenda for Sustainable Development.
[2] Ministry of Planning, Monitoring and Administrative Reform (2016), Sustainable Development Strategy: Egypt’s Vision 2030.
[5] Ministry of Trade and Industry (2017), MSMEs and Entrepreneurship National Strategy and Operational Plan (2017-2022).
[12] MSMEDA (2023), MSMEDA 2014-2023: years of challenges and achievements.
[14] OECD (2023), Framework for the Evaluation of SME and Entrepreneurship Policies and Programmes 2023, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/a4c818d1-en.
[1] OECD (2022), OECD Recommendation on SME and Entrepreneurship Policy.
[7] OECD (2021), SME and entrepreneurship policy frameworks across OECD countries An OECD Strategy for SMEs and Entrepreneurship, OECD.
[10] OECD (2021), SME and entrepreneurship policy frameworks across OECD countries: An OECD Strategy for SMEs and Entrepreneurship.
[11] OECD and UNIDO (2004), Effective Policies for Small Business: A Guide for the Policy Review Process and Strategic Plans for Micro, Small and Medium Enterprise Development.
[15] Office of the Promotion of Small and Medium Enterprises Promotion (2021), OSMEP Annual Report 2020.
[9] RiseUp (2018), The Startup Manifesto 1st Edition.
[4] Shehata, I. (2020), Guide to the New SMEs Law in Egypt, https://legaladviceme.com/legal-blog/212/guide-new-smes-law-egypt.
← 1. Law 141/2004 mandated the Social Fund for Development (SFD), which had been in existence since 1992, as the implementing authority. MSMEDA replaced the SFD in 2017.
← 2. Based on currency exchange rate of 8 June 2023 1 EUR = EGP 33.29.
← 3. The objectives of the EEIC are to foster a culture of sustainable entrepreneurship, support start-ups at different stages of development, ensure the quality of entrepreneurial education content provided by various entities, and propose recommendations for supportive policies related to entrepreneurship and amendments to the legislative frameworks that govern and regulate entrepreneurship and innovation.
← 4. The Egypt Observatory for Sustainable Entrepreneurship and Innovation is an open platform for registering and monitoring all initiatives, startups, and entrepreneurship centres that focus on sustainable entrepreneurship projects. The Observatory aims to collect and analyse data on the entrepreneurial environment and activities at the national level, shed light on the best practices of sustainable innovations, and integrate results to produce an Egyptian national index for innovation and entrepreneurship.
← 5. This is particularly relevant considering the AfCFTA, which came into force in 2019.
← 6. GAFI News, “Prime Minister discusses proposals to support and stimulate the entrepreneurial environment”, 4 June 2023, www.gafi.gov.eg/English/MediaCenter/News/Pages/Prime-Minister-discusses-proposals-to-support-and-stimulate-the-entrepreneurship-environment-.aspx/.
← 7. The SSAP Steering Committee consists of 16 members: eight ministries, representatives from the Treasury, the Statistics Agency, the Scientific and Technologic Institute, KOSGEB, the Union of Chambers and the Confederation of Craftsmen and Artisans, as outlined in the SME Strategy and Action Plan 2015-2018 (KOSGEB, 2015, p. 71).
← 8. See, for example, the public consultation call for input on the development of the Department of Enterprise, Trade and Employment Statement of Strategy 2023-2025, www.gov.ie/en/consultation/d497d-public-consultation-on-the-development-of-the-dete-statement-of-strategy-2023-2025/.
← 11. This includes the Train-the-Trainer programme as well as Master Trainer credentials, which qualifies regional office staff to train trainers in the local areas to deliver the ILO training methodologies.
← 12. Focused sectors: Cleaner Production; Engineering; Food and Agri-Business; Fashion and Design; Furniture; Jewelry; Leather and Leather Tanning; Mining Industries and Marble; Plastics; Textiles; and Quality Improvement.
← 13. The main objective of the FTTC is to upgrade exporters’ skills and their ability to compete in global markets and the international trading system. This includes practical training to improve their marketing skills and to develop a cadre of export marketing personnel specialised in international export marketing, and support services to introduce the use of effective tools for meeting the product development requirements of international buyers.
← 14. The mandate of Egypt Ventures is to invest in technology-based startups fostering a stronger eco-system of innovation in Egypt.
← 15. Of the 20 top-ranked start-up accelerators and incubators in Egypt, all but one were based in Cairo or Giza, the majority operated by private companies or NGOs (Qavi, 2023).
← 16. The Ministry of Planning, Economic Development and International Cooperation aimed to address this gap through the Rowad 2030 project, which established nine business incubators in different governorates.