The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has invested $100m in the initial public offering (IPO) of Egypt's Banque du Caire, securing an approximately 7% equity stake. This investment aims to strengthen the bank's capacity to expand financing for businesses and households across the country. The move is expected to have a positive impact on Egypt's economy, particularly for micro, small, and medium-sized enterprises (MSMEs).
Access to finance remains a significant challenge for Egypt's private sector, hindering its ability to grow, invest, and create jobs. MSMEs, which contribute more than one-third of Egypt's GDP and employ nearly 40% of its workforce, face constraints in accessing the financing needed to expand their operations. Banque du Caire has prioritized smaller businesses, with more than three-quarters of its clients located outside Cairo. The bank expects to more than double the number of customers it finances by 2030, from approximately 899,000 to 1.9 million.
With support from IFC's investment, Banque du Caire aims to increase its total lending from around $5bn to $8.9bn. The bank's CEO and Managing Director, Hussein Abaza, welcomed the successful completion of the IPO, saying it marked a defining milestone in the bank's history and a new chapter in its continued development. Abaza emphasized the bank's commitment to building on its established strengths, maintaining disciplined risk management and sound governance, and pursuing sustainable growth.
IFC and Banque du Caire have an established partnership focused on expanding access to finance for businesses in Egypt, particularly smaller enterprises. In 2024, IFC committed $50m to support the bank's lending to MSMEs, with half of the five-year loan earmarked for women-owned businesses. The two institutions also signed a $50m trade finance guarantee facility. IFC has also supported Banque du Caire in developing an Environmental and Social Management System and strengthening its corporate governance.
Ary Naïm, IFC's Division Director for North Africa and the Horn of Africa, highlighted the significance of the investment, saying it reflected IFC's commitment to empowering Egypt's financial sector. The partnership aims to help businesses access the finance they need to grow, invest, and create more and better jobs, while mobilizing private capital to support Egypt's development priorities. Egypt continues to advance its agenda to increase private sector participation in the economy and mobilize private investment.
The investment is being made jointly with the European Bank for Reconstruction and Development (EBRD), which is also participating in the offering with an investment of $100m. This brings the total investment by the two multilateral development banks to $200m. The project aligns with the World Bank Group's Country Partnership Framework for Egypt for FY2023–2027, particularly its focus on creating more and better private sector jobs and increasing private sector participation.
Since fiscal year 2022, the World Bank Group has mobilized nearly $6.7bn in private capital for Egypt through a combination of reforms, financing, guarantees, and partnerships aimed at unlocking investment in support of the country's development priorities. The investment in Banque du Caire's IPO is part of this effort, with the potential to broaden the bank's investor base and attract additional domestic and international private capital.
Key points
- IFC invests $100m in Banque du Caire's IPO to expand financing for businesses and households in Egypt.
- The investment aims to support Egypt's private sector growth, particularly for micro, small, and medium-sized enterprises (MSMEs).
- The project aligns with the World Bank Group's Country Partnership Framework for Egypt for FY2023–2027.
