AID microenterprise stock-taking : Egypt

In contrast, the current trend is to segregate microenterprise development from other initiatives. This report evaluates two projects which utilize these different approaches. The former approach is represented by the small enterprise loan program (SELP), a tiny component of the very large Helwan urban development project, while the current strategy is represented by a microenterprise loan fund operated by the Coptic Evangelical Organization for Social Services (CEOSS). CEOSS has been more successful in some respects. By the end of the grant in 1986, CEOSS had made 421 loans totalling $140,000, and the fund has continued to grow. Only 14% of the outstanding balance is in arrears, and only 5 loans are in default, each because of the borrower"s death. The future of the SELP loan fund, however, is in doubt. As of 6/87, about 19% of the outstanding balance of loan payments was in arrears by an average of 10 months, and there is little prospect for on-lending the repaid funds now that the SELP component of the project is over. CEOSS"s success can be attributed largely to local participation in project design and the effective integration of credit with technical assistance and training activities. Both projects were inhibited by Egypt"s macroeconomic policy environment and the high rate of inflation (22%-25% per annum), however, and despite the fact that some of CEOSS"s loans were making returns of up to 200%, the small value of the loans has limited both activities effectiveness in generating new jobs.