Egyptian entrepreneurs and small business owners are set to benefit from a newly launched policy framework that aims to unlock the full potential of the country’s micro, small and medium-sized enterprises (MSMEs). Developed through a joint initiative between the Egyptian government and the Organisation for Economic Co-operation and Development (OECD), the new SME policy report is more than a technical document, it is a strategic roadmap that outlines how to enable entrepreneurs to scale, innovate and compete in both local and global markets. The Micro, Small and Medium Enterprises Development Agency (MSMEDA) is expected to play a leading role in activating the recommendations, in coordination with other local and international partners.
SMEs represent over 90% of Egypt’s economic activity and play a vital role in employment, income generation and private sector growth. However, the sector has long faced challenges ranging from regulatory bottlenecks to limited access to finance and gaps in coordination among supporting institutions. This report directly addresses these issues and lays out a series of concrete steps to strengthen the entrepreneurial ecosystem.
At the heart of this initiative is the government’s goal to transition Egypt into a competitive, innovation-led economy, as outlined in the Egypt Vision 2030 strategy. The new report will inform updates to the national SME strategy and help align policies with the actual needs of entrepreneurs on the ground. It also brings Egypt’s efforts into closer alignment with international best practices, drawing on the OECD’s experience working with small business ecosystems across the globe.
Removing Roadblocks for Growth
One of the key areas of focus is formalisation. A significant portion of Egypt’s MSMEs operate in the informal sector, limiting their access to finance, markets and government support. The report recommends actions to help bring more of these businesses into the formal economy by reducing the cost of compliance, simplifying regulations and improving coordination among regulatory bodies. These changes will allow more entrepreneurs to benefit from government and private sector initiatives, while contributing to a healthier and more competitive business environment.
Scaling up is another priority. While Egypt has seen a rise in promising startups, particularly in fintech and digital services, most small businesses still struggle to grow beyond survival mode. To address this, the report calls for enhanced access to credit, including increasing the capital base of the Egyptian Credit Guarantee Company and expanding its range of guarantee products. It also recommends tax incentives for venture capital firms and other investors to reduce the risk of backing early-stage enterprises.
To support evidence-based policymaking, the report advises the government to develop a reliable annual database on SME performance and characteristics. This would make it easier to track progress, identify gaps and tailor policies based on actual data. It also proposes the introduction of an “SME Impact Test” before approving any new laws, helping to ensure that new regulations do not unintentionally harm small businesses.
The report further calls for a mechanism to monitor the implementation of the MSME Law and evaluate the uptake of its various incentives. It recommends empowering the Egyptian Regulatory Reform and Development Activity (ERRADA) to assist public bodies in conducting SME impact assessments and simplifying existing business regulations.
Accelerating Digital Transformation and Strengthening the Fintech Sector
Digital transformation features heavily in the report’s recommendations. Egypt is already making strides in this area, with increasing digital readiness and a strong base of internet users. The country outperforms many of its MENA peers in areas such as internet penetration, government e-services and technological infrastructure. However, many MSMEs remain on the margins of this shift, using digital tools only at the most basic levels. To address this, the report recommends the creation of a national SME digitalisation strategy, along with financial support like digital vouchers, tax incentives and targeted grants to help businesses adopt more advanced technologies.
Fintech also holds great potential for Egypt’s entrepreneurial sector. With rising mobile usage and improvements in digital payments infrastructure, fintech can offer new ways to deliver credit, insurance and payment services to underserved businesses. The Central Bank of Egypt and the Financial Regulatory Authority have already launched several initiatives to regulate and encourage fintech growth. The report builds on this by recommending a tiered regulatory system that lowers entry barriers for small fintech firms while ensuring market stability.
Fostering a stronger digital payments ecosystem is another priority. The report suggests incentives to encourage MSMEs to use and accept digital payments, including digital financial literacy programmes, especially for women-led businesses and MSMEs in rural areas. These steps are designed to help entrepreneurs create the digital footprint they need to access financing and new markets.
Improving Governance, Coordination and Regional Delivery
On the institutional side, the report highlights the need for stronger coordination across government entities involved in SME support. Egypt has many active programmes and agencies but their impact is often limited by overlapping responsibilities and lack of alignment. The establishment of a Ministerial Group for Entrepreneurship and a Permanent Entrepreneurship and Startup Unit at the Prime Minister’s Office are promising steps but more needs to be done to bring SME policy under a cohesive national umbrella. The Micro, Small and Medium Enterprises Development Agency (MSMEDA) is expected to play a leading role in activating the recommendations, in coordination with other local and international partners.
Geographic disparities in SME development are also addressed. Egypt’s vast size and regional diversity mean that entrepreneurs face different challenges depending on where they are located. The report encourages more decentralised policymaking, leveraging MSMEDA’s regional office network to deliver locally tailored programmes. However, this will require additional staffing, training and resources at the regional level to be effective.
The report recommends increasing the number of branches and enhancing the diagnostic capabilities of regional offices to better assess and respond to local needs. A pilot capacity-building programme is also proposed to strengthen underperforming regional offices.
Support for Women Entrepreneurs and Sectoral Innovation
The report places a strong emphasis on inclusive entrepreneurship, especially the need to support women-led MSMEs. It calls for the development of a dedicated women’s entrepreneurship strategy under the broader national MSME strategy. This should include targeted actions such as digitalisation and greening of women-led businesses, to be jointly implemented by MSMEDA and the National Council for Women.
In terms of sectoral development, the report identifies a gap in the support offered for SME greening and workforce training. It calls for stronger public-private collaboration to help traditional MSMEs adopt sustainable practices, improve productivity and align with national green goals. The report also recommends establishing national standards for incubators and accelerators to improve service quality and encourages the formation of industry associations for business advisors, mentors and incubators to act as institutional partners.
Egypt has made progress in launching a wide range of programmes for entrepreneurs and small businesses but the report highlights that coordination and quality remain uneven. More effort is needed to consolidate efforts under umbrella structures and professional associations to avoid duplication and raise standards.
This OECD-Egypt report is part of a broader Country Programme that has been extended to 2025 and includes 35 projects across five strategic areas. The initiative aims to embed international best practices into Egypt’s national policies and institutions. Egypt’s appointment as co-chair of the OECD MENA Initiative on Governance and Competitiveness from 2026 to 2030, with Italy and Turkey, also positions the country as a regional leader in shaping SME and entrepreneurship policy.
OECD-Egypt SME policy report provides a detailed and actionable framework to help Egypt’s entrepreneurs thrive. From improving access to finance and simplifying regulations to strengthening digital readiness and localising support, the report outlines a wide-ranging approach to tackle the most pressing challenges faced by entrepreneurs. If effectively implemented, it has the potential to unlock new growth, foster more inclusive economic participation and create a more dynamic and competitive private sector, led by the very people who are building businesses across Egypt every day.
