The Overseas Private Investment Corp., an independent agency of the U.S. government, secured $500 million for a lending facility, of which half will be provided to Egypt and the rest to Jordan.
OPIC will guarantee loans by local banks to SMEs, microfinance institutions and other approved borrowers.
By filling in the gap in access to credit by SMEs in Jordan and Egypt, the initiative aims to spur private sector growth and generate new jobs in the two countries.
Citing a recent study by the International Finance Corp. and McKinsey, OPIC says there are between 1.9 million and 2.3 million formal SMEs in the Middle East and North Africa, but most of them do not have access to credit.
Non-profit corporations CHF International and Middle East Investment Initiative will sponsor the project. To cover the operating expenses of these groups, the U.S. Agency for International Development will be providing about $11 million in grant funding in Egypt and $9.7 million in Jordan, as well as technical assistance to lenders and borrowers.