Micro, small, and medium-sized enterprises (MSME) and the entrepreneurs that start them comprise a large portion of the Egyptian economy. But MSMEs—often in the informal sector—face a host of challenges, ranging from lack of financial literacy and low access to finance, to difficulty integrating into value chains and challenges navigating bureaucratic red tape.
To counter these trends, DT Global proudly implemented the USAID Strengthening Entrepreneurship and Enterprise (SEED) project in Egypt from 2015 to 2020, which worked to develop the entrepreneurship ecosystem by providing technical support to entrepreneurs, MSMEs, business development services providers, incubators, and financing groups. To commemorate our project close, we are highlighting four major successes from project implementation.
1. Increasing mentorship, investment, networking, and training improved the ability of women entrepreneurs to enter markets and grow their businesses.
Women represent a large percentage of the potential economic sector in Egypt, but often face both discrimination in the entrepreneurship sector and a lack of training. DT Global conducted extensive work with women that culminated in the establishment of the Women Entrepreneurship Network (WEN) and the TIYE women’s angel investment network.
WEN is the first women’s entrepreneur network in Egypt and a value-added initiative for additional women-focused enterprises within the ecosystem to support women-led businesses in scaling up. TIYE is a women-led angel investment network established under WEN’s umbrella, with the goal of increasing the number of women angel investors and providing better access to finance for women entrepreneurs. While for various factors—ranging from customs and traditions to inheritance laws—women entrepreneurs are at a disadvantage in accessing traditional financing, 50% of total enterprises that the USAID SEED project supported were female-owned microenterprises and more than 15,000 women participated in USAID SEED programs to increase access to economic resources.
2. Strengthening business incubators led to an improvement in incubated startups’ ability to access finance and generate revenue.
Incubators—businesses that provide startups with a range of training and technical assistance support—are essential to developing a robust entrepreneurial ecosystem. This is especially true in a context such as Egypt, where entrepreneurs’ access to traditional finance is restricted. But the USAID SEED project found that Egyptian incubators themselves needed support to provide business services in line with international best practices.
To help improve the quality, capacity, outreach, and accessibility of selected incubator services across Egypt, the USAID SEED project provided support to 14 incubators, including in underserved areas such as Qena and Assuit. The project provided incubators with workshops and tailored training to build their capacity in a range of areas, from strategic planning to financial sustainability for startups, and legal training to developing a market information database. Because women are not well integrated into Egypt’s entrepreneurial and startup landscape, the project also provided all incubators with a gender mainstreaming training and toolkit.
In addition to training and technical assistance, the USAID SEED project provided essential information and communications technology (ICT) equipment to incubators to help them establish or expand their working spaces, including digital fabrication equipment, including 3D printers, scanners, and laser cutters. This equipment has enabled technology-related incubators to help the start-ups they support to build better prototypes. This equipment has already paid dividends beyond startup support—one incubator, EiTESAL Business Nurturing Initiative, was able to use this equipment to produce face shields for local healthcare workers fighting coronavirus.
The USAID SEED project’s support to Egyptian incubators has paid off. Four startups from USAID SEED-supported incubators won financial awards at the Cairo Innovates Summit (OTO—one-on-one—from EdVentures, Codey and Mozna from Rwaq, and XIOT from Ebni Borg AlArab). About 25% of the startups working with USAID SEED-supported incubators are female-owned. Startups incubated at USAID SEED-supported incubators have achieved a 189% growth in revenue to date.
3. Establishing One-Stop Shops simplified and accelerated business registration, encouraging informal sector businesses to join the formal economy.
The USAID SEED project aimed to solve a pain point in establishing and formalizing businesses in Egypt: registration. While the process generally entails making trips to three entities over multiple days, over the life of the project we established or activated 10 One-Stop Shops (OSS), through which business owners can file for and receive their registration in one day.
Now at an OSS, a customer service agent receives the request from the business owner and manages the case with on-site representatives of the Tax Authority and Commercial Registry. As soon as the paperwork is done, an automated queueing system refers her to the payment window where she pays for the service and receives her registration. The USAID SEED project trained customer service agents and developed the workflow and Customer Relationship Management system at the OSSs.
The OSSs have succeeded in shortening the time required for registration from four days to 20 minutes at a minimum and two hours as a maximum, helping more than 22,000 business owners to date (20% of whom were women) register their businesses in a simple and efficient manner. In addition to improving the experience for business owners, automation and training also helps to reduce chances for corruption.
4. Increasing the availability of Business Development Services (BDS) providers helps entrepreneurs to develop their businesses.
While it is important to help MSMEs to identify market opportunities and access finance to increase their ability to generate revenue, those efforts fall flat if the MSMEs do not have the business skills needed to capitalize on said opportunities. To mitigate this, the USAID SEED project built the capacity of more than 60 BDS providers from nine governorates to provide training and support to MSMEs and helped to establish 16 new BDS centers in seven governorates.
The project’s BDS training programs and toolkits covered a range of subjects, from global trends and best practices to exhibition management, financial management, and partnership building, including leveraging Corporate Social Responsibility initiatives. In addition to trainings, the project developed a Customer Relationship Management system for BDS providers to help them record and analyze the performance of the clients they serve and the services they provide, and an online Matchmaking Tool to allow MSMEs to search for BDS providers. Finally, the USAID SEED project helped BDS partners to identify and accurately price the most requested services from different client segments, helping with BDS sustainability. As a result, USAID SEED-established BDS providers have helped 1,082 enterprises and MSMEs access BDS services, 65% of which are female-owned.
Looking Back on the USAID Strengthening Entrepreneurship and Enterprise (SEED) project in Egypt
Through training, mentorship, and technical assistance to a range of stakeholders in Egypt’s MSME ecosystem, DT Global is proud to have implemented this USAID-funded project that made a tangible difference in the entrepreneurship ecosystem and the lives of so many Egyptian entrepreneurs. By providing support to a range of businesses and the entities that support them, including ones outside of major city hubs and those owned by women and youth, we were able to make significant inroads in entrenched inequality and have left behind tools, networks, and systems to sustain this work long after the USAID SEED project ends.