Technical assessment : rural small-scale enterprise pilot credit activity in Egypt

The evaluation covers the period 1987-10/90. The SP has exceeded expectations. Since lending began in 10/89, the SP has made 4,816 loans -- against a target of 2,000 -- in the amount of L.E. 3.96 million. High demand has resulted in full utilization of the loan fund and has brought the SP to the break-even point in operational income and expenses. SP success is attributable to both the strong leadership within the NBD and the responsiveness and hard work of small entrepreneurs. More specifically, the loans have been made at market-based rates to small entrepreneurs in 93 villages in 38 village council units on an unsecured basis. Women comprise about 9.3% of borrowers, receiving about 10% of the amount loaned. There have been no loan losses and the loan delinquency ratio is 0.3%. More than 100 different types of activities have been funded. Although working capital loans are common, most loans have been made for the purchase of small machines, equipment, and tools. Borrowers reported increased income as a result of the loans and many have hired additional employees. Because of these outstanding results, this pilot activity can be replicated in Cairo in its current form with minor modifications to reduce operational costs. However, an independent financial audit should be carried out before the SP is extended to other areas, since NBD operational expenditure data have been unreliable.