Commercial International Bank has completed a securitisation issuance worth one point three eight three billion Egyptian pounds on behalf of Egypt’s Micro, Small and Medium Enterprises Development Agency, marking the inaugural transaction under a broader three year programme valued at five billion pounds total. The deal channels fresh liquidity toward an agency whose borrowers include corner shops, small workshops, and modest factories across the country.
Securitisation works by bundling a pool of existing loans into a security that investors can purchase, with those investors then receiving payments drawn from the ongoing loan repayments generated by the underlying portfolio. This structure allows the original lender, in this case the small business development agency known as MSMEDA, to receive cash immediately for loans it would otherwise collect gradually over months or years, freeing up capital to extend additional financing to new small business borrowers.
The issuance itself was structured in two separate tranches to appeal to different investor preferences. The first tranche, valued at nine hundred eighty seven point six million pounds, carries a twelve month maturity and received a P1 credit rating from the Middle East Rating and Investors Service, representing the top possible short term grade on that particular ratings scale. A second, smaller tranche worth three hundred ninety five point six million pounds carries a longer nineteen month maturity and received an A rating based on the underlying portfolio’s strength alongside comprehensive guarantees and credit enhancements extended to bondholders.
CIB took on multiple roles throughout the transaction, serving as arranger, general coordinator, issuance manager, underwriter, subscription receiver, and custodian for the deal. Amr El-Ganainy, Deputy CEO and Executive Board Member at CIB, noted that the issuance aligns with the bank’s broader strategy of providing financing solutions that enhance market growth while supporting vital sectors, particularly small and medium enterprises that serve as a critical engine for sustainable economic development within Egypt.
MSMEDA Chief Executive Mostafa Ismail Hassan confirmed the agency achieved its first ever securitisation of a portion of its project finance portfolio as part of implementing a new financial sustainability strategy running from 2025 through 2031. Hassan explained that the operation aims to provide sustainable funding liquidity specifically designed to expand financing access for micro and small enterprises, ultimately reaching a larger number of entrepreneurs across Egypt’s various governorates.
The relatively shorter maturity structure chosen for this issuance reflects broader market conditions, with interest rates remaining elevated in real terms across the Egyptian economy. That environment made the twelve month tranche considerably easier to place with investors than a longer duration instrument would have proven, since investors currently favor shorter commitment periods given ongoing uncertainty around future interest rate movements.
This transaction adds to a broader pattern of active securitisation activity within Egypt’s financial sector this year, with CIB alone having arranged similar deals for various companies including consumer finance firms, retail electronics chains, and vehicle financing companies. That sustained volume of securitisation transactions reflects growing sophistication within Egypt’s capital markets, offering companies and government agencies alike an increasingly viable alternative financing tool beyond traditional bank lending or straightforward corporate bond issuance.
As MSMEDA moves forward with the remaining tranches under its broader five billion pound programme, this initial successful issuance offers an encouraging signal for how effectively the agency can tap capital markets to support its core mission. For Egypt’s small business sector, which continues facing persistent challenges accessing affordable financing, this kind of innovative funding mechanism represents one practical tool for channeling fresh liquidity toward entrepreneurs who might otherwise struggle to secure adequate capital through conventional lending channels alone.
