The session explored the growing relevance of Sharia-compliant financial instruments and their potential to enhance access to finance for SMEs and entrepreneurs across the Euro-Mediterranean and MENA regions.

Moderated by Ms. Nagla Bahr, Lead Representative of EMGN, Executive Board Member of CGC Egypt, and African Coordinator of the Global Network for Guarantee Institutions (GNGI), the webinar gathered experts, regulators, bankers, and FinTech representatives to discuss:

• The key differences between conventional and Islamic guarantee schemes;
• Sharia-compliant structures and operational frameworks;
• The role of FinTechs, smart contracts, and digital finance in developing innovative guarantee products;
• Opportunities for collaboration between guarantee institutions and Islamic finance stakeholders.

Distinguished speakers included Dr. Mohamed El-Jafari (Senior Independent Expert, Amman), Dr. Mohamed ElBeltagie (Chairman, Egyptian Islamic Finance Association, Cairo), Dr. Homam Hashem (CEO, Kafalah Saudi Guarantee Scheme, Riyadh), Bahaa Aldeen Omar Khashagji (Head of MSMEs, Bank Saudi Fransi, Riyadh), and Mr. Azhar Tasadduq (Founder & CEO, Fauree, Dubai).

Ms. Nagla Bahr underlined: “This webinar provided a valuable opportunity to deepen understanding of Sharia-compliant financial instruments and their potential to strengthen access to finance for SMEs.”

The discussions highlighted the strong interest among participants in continuing the dialogue and advancing collaboration on the development of Sharia-compliant guarantee mechanisms. A follow-up working group and future joint sessions will further explore practical pathways to support Islamic finance innovation across the region.

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Organised by the SME Finance Forum, managed by the International Finance Corporation (IFC), and co-hosted with the Global Finance & Technology Network (GFTN), the Forum is recognised as an official side event of the G20 South Africa Presidency.

The 2025 edition, under the theme “Building Resilience and Creating Opportunities for Growth”, will bring together global leaders from financial institutions, fintech innovators, development organisations, and policy circles to explore practical solutions to address the persistent financing challenges faced by small and medium enterprises (SMEs).

The three-day programme will include:

• Innovative financial instruments and credit guarantee mechanisms
• Public-private partnerships for financial inclusion
• Digital solutions expanding access to capital
• Policy and regulatory frameworks enabling SME growth
• Onsite study visits to leading banks, digital lenders, and SME stakeholders in South Africa

Mrs. Nagla Bahr remarked on the importance of the Forum:

“I believe the Forum is highly relevant for our members, given its diversity and the breadth of topics covered – particularly during such a challenging period for SMEs globally. It offers a unique opportunity to engage with leading voices in SME finance and bring valuable insights back to our regional networks.”

Registration is now open for this global event. For more information and to register, please visit: https://www.globalsmefinanceforum.com/

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Speech By Prof. Rym Ayadi, President of the Euro-Mediterranean Economists Association (EMEA)

Climate change adaptation is an urgent priority for the Mediterranean region, characterized by its high vulnerability to climate-related impacts such as droughts, floods, heatwaves, and rising sea levels. Addressing these risks requires substantial investments in resilient infrastructure, agriculture, water management, and coastal protection. However, financing adaptation projects remains challenging due to perceived risks, limited public budgets, and constrained private investment.

Credit Guarantees as a Financial Mechanism:

Credit guarantees have emerged as a powerful instrument to mobilize private capital for climate adaptation. By reducing perceived risks, credit guarantees encourage financial institutions and private investors to engage in sectors and projects they might otherwise avoid due to uncertainty or lack of familiarity.

In essence, a credit guarantee scheme involves a guarantor (often a public institution or a multilateral development bank) agreeing to cover part of the losses if a borrower defaults. This arrangement significantly reduces the risk for lenders, thereby lowering interest rates and improving borrowing conditions, making financing accessible for adaptation projects.

Relevance for the Mediterranean Region:

In the Mediterranean, credit guarantees can play a pivotal role by:

1. Catalyzing Private Sector Participation: Attracting commercial banks and investors to finance sustainable agricultural practices, resilient infrastructure, and water conservation technologies.
2. Supporting SMEs and Farmers: Offering SMEs and smallholder farmers better access to finance for adopting climate-resilient practices and technologies.
3. Leveraging Public Funds: Using limited public resources to leverage larger volumes of private investment, thus multiplying the overall investment capacity for adaptation.

Examples and Best Practices:

• European Investment Bank (EIB): The EIB has successfully utilized credit guarantees to mobilize substantial private investment in renewable energy projects across the Mediterranean. For example, the EIB-supported program “Green for Growth Fund” significantly improved energy efficiency and renewable energy capacity by providing guarantees that enabled local banks to extend financing to SMEs and municipalities.
• Tunisia’s PROSOL Program: This innovative program leveraged credit guarantees to finance residential and commercial solar water heaters. Supported by a partnership between the Tunisian government, UNEP, and local banks, PROSOL provided partial guarantees, reducing risks for banks and thus increasing access to financing for consumers.
• Morocco’s Agricultural Resilience Initiatives: Morocco employed credit guarantees through programs like the “Green Morocco Plan” which allowed smallholder farmers access to financing for sustainable agriculture techniques, irrigation improvements, and resilient crop varieties, thereby enhancing agricultural productivity and resilience.
• Egypt’s Water and Sanitation Projects: Credit guarantees backed by international financial institutions facilitated private sector involvement in large-scale infrastructure projects aimed at improving water management and sanitation, contributing significantly to Egypt’s climate resilience and public health goals.

Design of a Green Guarantee Instrument:

A specifically tailored green guarantee instrument for financing adaptation and mitigation in the Mediterranean should incorporate several key design features:

1. Targeted Risk Coverage: Clearly defined criteria for eligible projects and sectors such as renewable energy, water conservation, resilient agriculture, and coastal protection to ensure funds directly contribute to climate resilience and mitigation goals.
2. Flexible Guarantee Structures: Offering partial guarantees or first-loss guarantees tailored to different project scales and risk profiles, enhancing attractiveness to various types of investors, from local banks to international financiers.
3. Performance-Based Incentives: Linking guarantees to environmental and social performance outcomes to ensure project alignment with climate objectives and to encourage continuous improvements in resilience and mitigation measures.
4. Robust Monitoring and Evaluation Systems: Establishing transparent monitoring frameworks to track and report climate adaptation and mitigation impacts, thereby increasing accountability and confidence among investors and stakeholders.
5. Capacity Building Component: Including technical assistance and capacity-building programs for financial institutions, project developers, and beneficiaries to ensure effective utilization of financial resources and sustained adaptation impacts.

Connecting Adaptation and Mitigation:

Adaptation and mitigation strategies, although distinct, often intersect and reinforce each other. For instance, investments in resilient agriculture practices like agroforestry simultaneously enhance carbon sequestration (mitigation) and reduce vulnerability to extreme weather events (adaptation). Similarly, sustainable urban infrastructure projects, such as green roofs and urban forests, not only reduce urban heat island effects (adaptation) but also absorb atmospheric carbon dioxide (mitigation). Renewable energy projects in water-scarce regions, such as solar-powered desalination plants, enhance water availability (adaptation) while significantly reducing reliance on fossil fuels (mitigation). Integrated projects addressing both adaptation and mitigation offer greater efficiency, optimize resource use, and maximize climate and developmental co-benefits.

Enhancing ESG and Accelerating SDGs:

Financing climate adaptation and mitigation through credit guarantees significantly enhances organizations’ Environmental, Social, and Governance (ESG) performance by directly addressing climate risks and promoting sustainability. Such financing aligns with investors’ increasing emphasis on ESG criteria, attracting more sustainable capital. Moreover, these financial mechanisms contribute directly to the acceleration of Sustainable Development Goals (SDGs), particularly those relating to climate action (SDG 13), clean water and sanitation (SDG 6), affordable and clean energy (SDG 7), and sustainable cities and communities (SDG 11), thereby promoting holistic, sustainable development across the region.

Roadmap for EMGN to Support Guarantee Schemes:

1. Assessment and Benchmarking: Identify existing gaps and opportunities in regional guarantee schemes through comprehensive assessments and benchmarking exercises.
2. Capacity Building: Develop tailored capacity-building programs for financial institutions and guarantee scheme providers, focusing on climate-related project evaluation and risk management.
3. Networking and Collaboration: Strengthen collaboration among regional guarantee schemes through regular forums, workshops, and joint initiatives to share best practices and successful models.
4. Technical Assistance Facility: Establish a regional technical assistance facility to support the design and implementation of specialized green guarantee products and to enhance institutional capacities.
5. Policy Advocacy: Engage with policymakers to advocate for supportive regulatory frameworks that enhance the viability and scalability of climate-focused guarantee instruments.
6. Monitoring and Impact Evaluation: Implement rigorous monitoring and evaluation systems to track the performance and impact of guarantees, ensuring continuous improvement and transparency.

Conclusion:

Credit guarantees represent a crucial, innovative approach to unlocking private finance for adaptation initiatives in the Mediterranean. By mitigating investment risks and leveraging additional private capital, these instruments not only enhance climate resilience but also contribute to broader economic and social development objectives across the region.

This statement is based on the welcome speech delivered by Prof. Rym Ayadi, “The Role of Credit Guarantees to Finance Adaptation to Climate Change in the Mediterranean,” at the Euro-Mediterranean Guarantee Network (EMGN) Spring Academy 2025, held on 26–27 May in Istanbul, Türkiye.

In her address, Prof. Ayadi emphasized that: “Credit guarantee schemes are essential levers to unlock private investment and bridge the financing gap in climate adaptation and mitigation. By effectively managing risk, aligning incentives, and enhancing ESG performance, they empower Mediterranean communities and businesses to build resilience, drive sustainable growth, and collectively accelerate the journey towards achieving the Sustainable Development Goals.”

The Spring Academy of 2025 was organised by the Euro-Mediterranean Guarantee Network (EMGN), led by the Euro-Mediterranean Economists Association (EMEA) and the European Institute of the Mediterranean (IEMED) in collaboration with the Development Guarantee Group, the Green Guarantee Company,  and the International Labour Organization (ILO). The Academy is hosted by the Union for the Mediterranean (UfM) as a side event to the Sustainable Digital Week.

Link to Prof. Ayadi’s speech video

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The event was organised by the Euro-Mediterranean Guarantee Network (EMGN), led by the Euro-Mediterranean Economists Association (EMEA) and the European Institute of the Mediterranean (IEMed), in collaboration with the Development Guarantee Group, the Green Guarantee Company, and the International Labour Organization (ILO). It was hosted by the Union for the Mediterranean (UfM) as a side event to the Sustainable Digital Week.

The Academy kicked off in Istanbul with opening remarks by Mr. Joan Borrell, Deputy Secretary General of the Union for the Mediterranean (UfM). This was followed by a welcome speech by Prof. Rym Ayadi, Founder and President of the Euro-Mediterranean Economists Association (EMEA), and Professor at Bayes Business School, City St George’s, University of London, on “The Role of Credit Guarantees to Finance Adaptation to Climate Change in the Mediterranean”.

Prof. Ayadi underlined that:

“Credit guarantee schemes are essential levers to unlock private investment and bridge the financing gap in climate adaptation and mitigation. By effectively managing risk, aligning incentives, and enhancing ESG performance, they empower Mediterranean communities and businesses to build resilience, drive sustainable growth, and collectively accelerate the journey towards achieving the Sustainable Development Goals”

This edition of the Academy brought together EMGN members and guest institutions from Finland and Kosovo to share operational experiences and innovative practices in green product design and ESG integration. Over two days, participants engaged in peer-to-peer exchanges, case presentations, and expert-led sessions focused on how Credit Guarantee Institutions (CGIs) can play a pivotal role in driving the green transition.

Day 1 centred on Green Guarantee Schemes in Action, highlighting practical approaches to product development, impact measurement, and collaborative financing models.

Day 2 focused on ESG Monitoring and Integration, exploring tools and strategies to embed ESG principles into the institutional frameworks, risk management, and reporting systems of CGIs.

Sessions featured insights from leading experts representing the Green Guarantee Group, Development Guarantee Group, Green Guarantee Company, KPMG Ghana, and the ILO. The Academy underscored the importance of aligning guarantee schemes with international sustainability standards and increasing transparency in environmental, social, and governance dimensions.

On-site were present 16 Members of EMGN, external participants, and associates, including representatives for Tamwilcom Morocco, BPIfrance, JLGC Jordan, AECM Brussels, Kafalah Saudi Arabia, HDB Greece, CGCI Algeria, and guest speakers from KGF Kosovo, Development Guarantee Group. The event was organized by Christine de Visser, Project Manager (EMEA) and Nicolas Medrano, program officer (IEMed). Online where connected colleagues from the YLG Yemen Loan Guarantee, CGC Egypt, and ‘Sotugar’ Tunisia.

The event concluded with the presentation of participation certificates by Christine de Visser, Project Manager at the Euro-Mediterranean Economists Association (EMEA) and Said Charma, Senior Economic Advisor at the Union for the Mediterranean.

Highlights:

• Guarantee institutions have the potential to play a pivotal role in unlocking climate finance by de-risking green investments, attracting private sector capital, and enabling the flow of funding toward sustainable projects, especially in emerging and developing economies where financing gaps are significant.
• The Green Guarantee Group’s mission focuses on scaling innovative, climate-aligned solutions and supporting ESG integration and risk-sharing ahead of COP30.
• A good practice from Kosovo, the Kosovo Credit Guarantee Fund showcased a green guarantee product supporting MSME investments in energy efficiency (EE) and renewable energy (RE), offering up to 70% coverage and favorable fees, along with strong non-financial support through staff training and the “Esave” platform for managing and tracking green loans.
• A good practice from Finland, showcased Finnvera’s approach to supporting the green transition by embedding climate and environmental criteria into its loan operations, offering practical insights on project screening and aligning finance with sustainability goals.
• A key highlight from the academy was the introduction of SAFE—Scaling Alternative Finance for Entrepreneurs—a pioneering funding initiative supported by Germany and the EU, offering investment-grade guarantees to alternative finance institutions to expand green and inclusive finance for MSMEs, especially women-led and green-focused businesses across MENA and beyond.
• Morocco’s Green Invest initiative, showcased Tamwilcom’s blended approach of guarantees and joint financing to support the green economy, including the integration of carbon footprint requirements for all guaranteed projects to drive sustainable investment.
• A key highlight from Jordan Loan Guarantee Company was its Green Finance Guarantee Program, designed to reduce credit risk and boost green lending to MSMEs, fully aligned with the Central Bank of Jordan’s Green Finance Strategy, and supported through close collaboration with banks to promote sustainable investments and environmental standards in lending. The program offers up to 85% guarantee coverage for projects in Amman, 90% for projects outside Amman or led by women.
• The Environment Fund Initiative showcased the power of collaboration between different actors, with Kafalah and the Saudi Environment Fund working together to support green investments. The program also includes a strong client incentive: good clients who repay their loans without any delayed payments qualify for the Environmental Fund to cover 100% of the interest paid.
• Core ESG actions for guarantee institutions include: strengthening ESG governance by appointing senior focal points and embedding ESG in board strategy; developing a clear ESG policy aligned with national and international standards; designing ESG-linked guarantee products with incentives; integrating ESG criteria into risk appraisal and due diligence; building staff and partner capacity through training and technical support; and establishing robust ESG monitoring, reporting, and disclosure practices.
• Bpifrance’s Climate Plan, launched in 2020 aims to accelerate the green transition, support renewable energy, and finance greentech innovation, while also playing a crucial advisory role to public authorities on ESG and CSR through data, expertise, and policy engagement.
• Key challenges in promoting green finance, include low MSME awareness, limited financial incentives, and insufficient bank staff capacity.
• Credit Guarantee Schemes can embed ESG principles through aligned policies, ESG-integrated guarantee design, risk-based application appraisal, and ongoing monitoring and evaluation. Drawing on Yemen’s experience, the session emphasized adaptive, context-sensitive approaches for responsible finance, especially in fragile and conflict-affected markets.
• The International Labour Organization, provided Credit Guarantee Institutions with practical guidance on integrating social factors—such as labour rights, job quality, and inclusivity—into their impact management, reinforcing the critical role of the social dimension in sustainable and inclusive finance.

Link to Prof. Ayadi’s statement

Link to Prof. Ayadi’s speech video

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Organised as a follow-up to the EMGN Spring Academy 2025, the session explored the critical yet often underutilised role of guarantee institutions in advancing sustainable development in the Southern and Eastern Mediterranean. The panel examined how guarantee schemes reduce investment risk, facilitate access to finance for SMEs, and promote alignment with Environmental, Social, and Governance (ESG) principles and the Sustainable Development Goals (SDGs).

Panelists included: Lasitha Perera, CEO, The Development Guarantee Group & Green Guarantee Company (UK); Amal Jaradat, Deputy Director General, Jordan Loan Guarantee Corporation (Jordan); Abdelmoughite Abdelmounem, Chief Strategy Officer, Tamwilcom (Morocco); and Almutasem Alkhateeb, Senior Business Development Specialist, Kalafah (Saudi Arabia).

The discussion offered actionable insights for entrepreneurs, policymakers, and financial institutions on designing inclusive financial tools that support green investment and social resilience in the region.

The UfM Digital Sustainable Week, organised by the Union for the Mediterranean (UfM) in collaboration with the German Development Cooperation, brought together regional stakeholders to explore the intersection of Artificial Intelligence, sustainable trade, and investment in fostering inclusive and green growth.

The EMGN Spring Academy 2025 was organised by the Euro-Mediterranean Guarantee Network (EMGN), led by EMEA and the European Institute of the Mediterranean (IEMED), in collaboration with the Development Guarantee Group, the Green Guarantee Company, and the International Labour Organization (ILO). The Academy was hosted by the UfM as a side event to the UfM Digital Sustainable Week.

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This edition of the academy will bring together EMGN members and invited institutions to share experiences and operational practices in green product design and ESG integration. The program will highlight how Credit Guarantee Institutions (CGIs) can develop innovative green guarantee schemes, align with international sustainability frameworks, and respond to increasing regulatory and market demands for environmental, social, and governance (ESG) transparency.

The two-day event will feature interactive peer-to-peer sessions, presentations of green guarantee practices from the EMGN network and guest institutions from Finland and Kosovo, and sessions with leading experts from organizations such as the Green Guarantee Group, the Development Guarantee Group, the Green Guarantee Company, KPMG Ghana, and the International Labour Organisation.

Day 1 will be dedicated to Green Guarantee Schemes in Action, with a focus on practical approaches to product design, impact metrics, and collaborative financing models.

Day 2 will cover ESG Monitoring and Integration, exploring actionable strategies for embedding ESG criteria into institutional operations, risk frameworks, and reporting systems.

Moderated by experienced facilitators and international specialists, the academy aims to strengthen cross-regional collaboration and equip CGIs with the tools to advance the green transition through more effective and responsible guarantee mechanisms.

The Spring Academy of 2025 is organised by the Euro-Mediterranean Guarantee Network (EMGN), led by the Euro-Mediterranean Economists Association (EMEA) and the European Institute of the Mediterranean (IEMED) in collaboration with the Development Guarantee Group, the Green Guarantee Company,  and the International Labour Organization (ILO). The Academy is hosted by the Union for the Mediterranean (UfM) as a side event to the Sustainable Digital Week.

Link to the event agenda

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Held against the backdrop of economic inequality, limited SME access to finance, and the increasing impact of climate change, the conference underscored the critical role of local credit guarantee schemes (CGS) in fostering economic resilience and sustainability across the Mediterranean. Despite the significant role of CGS, discussions highlighted that their use remains limited within SME lending portfolios. The event served as a platform for financial leaders to deliberate on best practices, policy recommendations, and mechanisms to enhance the outreach and impact of these schemes.

The conference opened with welcome speeches by Hicham Zanati Serghini, CEO of TAMWILCOM; Mohammed Tarek Bchir, Acting Head of the Department of Treasury and External Finance, Ministry of Economy and Finance, Kingdom of Morocco; Nagla Bahr, EMGN Lead Representative and Executive Board Member of CGC Credit Guarantee Company – Egypt; and Nasser Kamel, Secretary General of the Union for the Mediterranean.

Following the welcome speeches, Roger Albinyana, Managing Director of IEMed, and Prof. Rym Ayadi, Founder and President of EMEA, addressed the audience with opening remarks. In her speech, Prof. Ayadi emphasized the importance of guarantee schemes, stating, “Guarantee schemes must not only de-risk finance but also de-risk the future—by equipping businesses, financial institutions, and workers with the skills to navigate uncertainty and drive sustainable growth.”

Key Sessions and Discussions

Session 1: EMGN Members’ Impacts and Success Stories

The first session, titled “EMGN Members’ Impacts and Success Stories,” featured a presentation by Christine de Visser, EMEA Project Manager, on “EMGN Impact and Consolidated Report on Members’ Performance.” This was followed by a discussion on key takeaways from EMGN’s CEOs and success stories, featuring:

• Taoufiq Lahrach, Deputy CEO, TAMWILCOM
• Adnan Naji, Director General, Jordan Loan Guarantee Corporation
• Homam Hashem, CEO, Kafalah

The session concluded with the presentation of the “ILO Think Impact Toolkit for Guarantee Instruments” by Tomoka Omoto, Officer in Sustainable Investing and Just Transition Financing at the International Labour Organization (ILO).

Session 2: Mainstreaming Local Credit Guarantees – Perspectives from Stakeholders

The second session focused on perspectives from lenders and investors on expanding the outreach of Credit Guarantee Schemes (CGS) and their role in climate change initiatives. Panelists discussed the significance of guarantee mechanisms, the challenges faced, and opportunities for enhancing their impact. Speakers:

• Nabil Badr, Deputy Head of Banking Supervision, Bank Al-Maghrib
• Nejia Gharbi, Director General, Caisse des Dépôts et Consignations (CDC), Vice President, MED Confederation
• Panagiotis Tournavitis, CEO, Cooperative Bank of Karditsa
• Tarik Haddi, CEO, Azur Innovation Fund

The session was moderated by Roger Albinyana, Managing Director of IEMed.

Session 3: Perspectives from International Financial Institutions and Multilateral Donors

The third and final session, “Mainstreaming Local Credit Guarantees: Perspectives from International Financial Institutions (IFIs) and Multilateral Donors”, examined how international organizations could integrate Mediterranean Credit Guarantee Schemes (CGS) into their operations. Discussions revolved around economic development, green finance integration, and funding opportunities for regional schemes.

Moderated by Nagla Bahr, EMGN Lead Representative and Executive Board Member of CGC Credit Guarantee Company – Egypt, the panel featured:

• Janne Rajpar, Office Director in Morocco, KfW Development Bank
• Houda Zinoun, Senior Investment Officer, Financial Institutions Group, International Finance Corporation (IFC)
• Fadwa Bennani, Senior Financial Sector Specialist, The World Bank
• Ismail Mahamoud, Principal Investment Officer, African Development Bank
• Lamiae Derraji, Principal Banker – Financial Institutions, EBRD
• Adrien de Bassompierre, Head of EIB Representation in Morocco, European Investment Bank (EIB)

The EMGN 5th Annual Conference concluded with closing remarks by Nagla Bahr and Chris De Noose, President of the MED Confederation, marking the end of a successful event aimed at strengthening credit guarantee mechanisms and enhancing SME access to finance across the Mediterranean region.

After the end of the Annual Conference, EMGN members were invited to attend the Steering Committee meeting of the Network.

Prof. Ayadi’s speech at the 5th Annual Conference “Guaranteeing the Future: Empowering Skills for Resilient Finance in the Euro-Mediterranean” is available here.

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Local credit guarantee schemes play a crucial role in mitigating the risks for lenders and investors, thereby facilitating increased lending to SMEs. These guarantees help SMEs secure the necessary funds to grow, innovate, address new challenges as per the climate change, and contribute to economic development. Mainstreaming these schemes can significantly enhance financial inclusion and economic resilience across the Mediterranean region.

However, CGS’ usage in the region is often limited to a relatively small share of the SME lending portfolio as well as the need for expanding guarantee products addressing the new challenges, which might imply that there remains a significant growth potential.

It is within this context that the Euro-Mediterranean Guarantee Network (EMGN) organises its fifth Annual Conference, with the aim to provide a platform for stakeholders to delve into the strategies and best practices for better integrating local credit guarantees into the international and national financial systems of Mediterranean countries and in fine enhance their financial resources, expand their risk frame to incorporate new challenges as in climate change aspects, which should consequently vitalize their role and increase their outreach. The conference will highlight the main new challenge of climate change, explore the perspectives of the lenders, investors, international financial institutions (IFIs), and multilateral donors on how to optimise these schemes to support SMEs’ access to credit in the region.

The event is co-organised by TAMWILCOM, the European Institute of the Mediterranean (IEMed), the Euro-Mediterranean Economists Association (EMEA) and the MED Confederation.

Members of the EMGN will be invited to attend the Steering Committee meeting, on 20 February at 15:00 local time.

Link to the event agenda

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It was organised by the Euro-Mediterranean Guarantee Network (EMGN), led by the Euro-Mediterranean Economists Association (EMEA) in collaboration with The Change Initiative and TEDx Ambassador (TED), Coach and Presenter at TED & TEDx, Mr. Ajit Sharma. The Academy was hosted by CGC Egypt, a Credit Guarantee Company in Egypt, and a member of the EMGN Network.

The main aim of this academy was to enrich participants’ knowledge and share operational challenges & best practices among CGS (Credit Guarantee Schemes) to enhance their communication strategies towards stakeholders. This academy program prioritised peer-to-peer learning, with EMGN members exchanging methodologies and practices, and included presentations and roundtable discussions on common challenges such as raising awareness of their product among MSMEs, CGS relationships with banks, international development agencies and regulators.

The Academy opened with welcome addresses by Ms. Nagla Bahr CGC BoD Executive Board member and Chairwoman of EMGN and an introductory speech on the importance of good communication for Guarantee Funds by Prof. Rym Ayadi, Founder and President of the Euro-Mediterranean Economists Association (EMEA).

Prof. Rym Ayadi highlighted in her speech that “effective communication is the cornerstone of any successful guarantee scheme. By fostering transparency, simplifying access, building trust, and improving reporting these institutions can serve to empower MSMEs across the Mediterranean to unlock their full potential. EMGN stands at the forefront of this mission, bridging the knowledge gap and promoting cooperation across the region to ensure that no business is left behind.”

On-site were present 24 Members of EMGN, external participants, and associates including representatives for Tamwilcom Morocco, CGC Egypt, LGF Libya, JLGC Jordan, AECM Brussels, Kafalah Saudi Arabia, HDB Greece, CGCI Algeria, and guest speakers from GiZ and from Banque du Caire. Online where connected colleagues from the YLG Yemen Loan guarantee, and additional participants from CGC Egypt.

The Autumn Academy 2024 received remarkable ratings from its participants with an average overall score of the thematic session of 4.53/5, and an overall score of the organization of the academy of 4.67/5

The Autumn Academy 2024 closed with the concluding remarks and the presentation of participation certificates by Ms Nagla Bahr, CGC BoD Executive Board member of CGC Daman Egypt and Chairwoman of EMGN

Key highlights from the EMGN Autumn Academy 2024 training workshop:

• Several megatrends are shaping the future of communication including; digital transformation, sustainability and social responsibility, globalization, and data privacy. Credit guarantee institutions (CGIs) can adapt their communication strategies in response to the identified megatrends to effectively navigate the changing communication landscape and better serve their clients and stakeholders.
• Effective communication with SMEs requires a clear understanding of their unique barriers, such as limited financial literacy, access to information, and comprehension of available financial products. Tailored messaging should prioritize simplicity and actionable insights, clearly demonstrating how financial services and development initiatives can drive SME growth. Additionally, implementing adaptive strategies that incorporate feedback allows for ongoing refinement of communication efforts.
• Success stories and testimonials are essential for a value-based approach, illustrating how credit guarantee programs help businesses solve problems and achieve better results. They provide social proof and credibility, fostering trust while offering emotional appeal and inspiration. Additionally, these stories help overcome objections and reduce perceived risks by showcasing the real-life benefits and outcomes of these programs.
• Tamwilcom shared their good practice of communication strategy which involves collaborating with partner financial institutions to provide comprehensive information and training on products and procedures. Raising awareness among eligible beneficiaries about available guarantee and financing options. Additionally, supporting local institutional players further amplifies impact and fosters collaboration within the community.
• CGCI also shared their experience in enhancing communication with banking partners through modern digital channels. This includes providing real-time information on guarantee products, events, and news via a dedicated website, maintaining an active presence on social networks like Facebook and LinkedIn, and conducting targeted email campaigns with regular updates for partner banks.
• From the banks’ perspective, to enhance communication and collaboration, CGIs should consider utilizing digitized communication channels (such as digital platforms, big data, AI, and advanced data analytics), providing capacity-building for bank staff, simplifying their processes, and tailoring their products to current needs, including green finance and financing for women and youth.
• JLGC shared their experience collaborating with the Central Bank of Jordan, which contributed to the launch of several initiatives that enabled small and medium-sized companies to secure appropriate financing at lower costs and on favorable terms through various financing windows backed by JLGC guarantees.
• The future involves continued collaboration with international partners to create sustainable financing solutions that empower local businesses. However, both parties face several challenges, including differing terminology, lengthy processes, limited awareness, and regulatory barriers. To effectively communicate with development agencies, it’s essential to find common ground, use language that resonates with them, reach out to the appropriate contact person, present a compelling profile, and clearly define a specific goal.
• Finally, the academy participants were introduced to storytelling, which fosters emotional connections, simplifies complex information, engages stakeholders, and enhances message retention. It builds trust and credibility while making the institution’s vision and services more relatable to clients.

The EMGN Academy is promoted by the Euro-Mediterranean Economists Association (EMEA), the European Institute of the Mediterranean (IEMed) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). EMGN Academies are carried out as part of a project financed by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH commissioned by the Government of the Federal Republic of Germany, namely: “Innovation Fund Jobs through Trade and Investment in the Southern Neighbourhood of the EU”.

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Additionally, experts will be invited to discuss communication strategies with international Development agencies and local banks and to teach participants the art of mastering storytelling. Moderated by a professional moderator and expert in communication, the academy promises to be rich in interactions, foster collaboration, and bring valuable insights for participants to apply within their institutions to enhance their operations.

The Autumn Academy of 2024 is organised by the Euro-Mediterranean Guarantee Network (EMGN), led by the Euro-Mediterranean Economists Association (EMEA) in collaboration with The Change Initiative and TEDx Ambassador (TED), Coach and Presenter at TED & TEDx, Mr Ajit Sharma. The Academy is hosted by CGC Egypt, a Credit Guarantee Company in Egypt, and a member of the EMGN Network. EMGN Academies are carried out as part of a project financed by the German Agency for International Cooperation (GIZ) commissioned by the Government of the Federal Republic of Germany, namely: “Innovation Fund Jobs through Trade and Investment in the Southern Neighbourhood of the EU”.

Download EMGN Autumn Academy 2024 booklet

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The Mediterranean region faces pressing challenges such as environmental degradation, climate change, and economic inequality. In response to these global concerns, the green economy emerges as a path to sustainable development and shared prosperity. However, shifting towards sustainable practices and technologies requires significant investments. Therefore, innovative financial mechanisms for small and medium-sized enterprises (SMEs) are crucial to drive sustainable progress in the Mediterranean region.

Micro, small and medium-sized enterprises (MSMEs) account for 90-95% of all registered companies of the Mediterranean region, employing two-thirds of the labour force in the formal sector. MSMEs are a tool to create long-term employment and have the potential to become the main drivers of sustainable regional development, not only in terms of economic growth but also by boosting industrial innovation and infrastructure, promoting socioeconomic inclusion, and advancing the green and digital transitions.

Nonetheless, MSMEs continue to be excluded from financial markets. Thus, there is a pressing need to establish adequate mechanisms to favour investments and help their growth and success. Supporting this sector is one of the main professional objectives of Nagla Bahr, the chairwoman of the Euro-Mediterranean Guarantee Network (EMGN).

“I had always wanted to study economics. Since I was very young, I have always been curious to understand how the world works and unveil its power games and, to me, that is what economics is about,” Nagla told the UfM. After getting her degree, her close contact with EU-funded projects in Egypt led her to specialise in economic development.

Nagla has always viewed start-ups as the main motors of the economy and potential drivers of sustainable development. Because of this, she decided to enter the credit guarantee industry to support and empower SMEs and ensure their launch and continuity. In her own words: “Not only do I love what I do, but I also believe in what I do.”

During the early stages of Nagla’s career in the credit guarantee industry, meetings would take place sporadically between certain North African and Southern European countries. Nonetheless, she believes there lacked a solid structure that could help consolidate North-South relations in the Mediterranean. It was in this context that the UfM appeared to fill this role in 2012, which led to the labelling of the Euro-Mediterranean Guarantee Network (EMGN) in 2022. The UfM label is an endorsement of projects of high quality and potential which helps to increase awareness and visibility and facilitates access to a network of potential donors and partners, capitalizing on the convening power of the UfM.

“The UfM has acted as an irreplaceable umbrella to facilitate the connection between the North and the South of the Mediterranean region in the credit guarantee industry,” she said.

The EMGN project seeks to improve access to financing for MSMEs by uniting Credit Guarantee Schemes (CGS) operating in the Euro-Mediterranean region. It focuses on four interrelated actions: training, research and development, advocacy and communication, and knowledge sharing. Nagla, as the chairwoman of the project, says the exchange of best practices has enabled Southern Mediterranean countries to get ideas from the more solidified markets and industries of Northern countries. At the same time, she pointed to how Northern Mediterranean countries have been able to learn innovative strategies and approaches that Southern countries have been bringing to the table.

The EMGN is a key initiative to help MSMEs, especially those led by young people and women entrepreneurs, close the finance gap in the Mediterranean region. Nagla, while describing start-ups as the motors of our economies, presented CGS as the main facilitators for investment, thus as a great way for entrepreneurs to receive the needed funding to turn their ideas into businesses.

Between the period of 2020 and 2023 the EMGN has:

• Grown the network from 8 full members to 11 full members and 5 associate members, strengthening its Euro- Mediterranean dimension.
• Organised 7 Training Academies with around 100 participants trained on digitalisation, green guarantee, and risk management.
• Established 3 working groups on data collection, digitalisation and regional counter-guarantee to research and develop new product ideas.
• Increased cooperation between EU Guarantee schemes and Southern and Eastern Mediterranean Guarantee.
• Increased awareness on the impact of Credit Guarantees for MSME’s access to investment.

The CGS members of the EMGN have also estimated that between 70-90% of MSMEs would not have been able to receive a loan without a guarantee, proving their impact and relevance.

Reflecting on her hopes for the credit guarantee industry in the future, Nagla argued that the sustainability of our economies demands more robust and resilient credit guarantees in the Mediterranean region that deliver efficient financial tools and can anticipate and overcome market disruptions. To achieve these goals, initiatives like the EMGN gain special relevance as a key platform to showcase best practices, exchange knowledge, and enhance the importance of CGSs in the region.

When asked what advice she would give any young entrepreneur, Nagla emphasised the importance of education. As she stated, it is not only about having a great and innovative idea but also about having the financial, marketing, administration, and legal skills for young people to be able to start their own businesses.

Keep reading about the initiative she champions here!

The post <strong>EMGN Chairwoman Ms Nagla Bahr featured at UfM website</strong> appeared first on EMGN.

Enhancing access to finance for Micro, Small and Medium Enterprises (MSMEs) is high on policy makers’ agenda around the world, due to their role in the overall development and inclusive growth of nations. MSMEs are an important sector in the MENA region and have contributed immensely to the region’s socio-economic development. As the largest employer in the region, MSMEs play a significant role in reducing unemployment rates and stimulating economic development and innovation. However, their viability and growth can be restricted by lack of access to credit and equity, which results in a less vibrant private sector (Ayadi et al., 2021). In particular, MSMEs in emerging economies identify access to finance as a key barrier to their growth. According to the SME Finance Forum, the MENA region has the highest proportion of MSME finance gap compared to potential demand, measured at 85%. Access to credit for MSMEs is limited by a number of factors, including information asymmetries, as these enterprises are more opaque than large firms, and lack of collateral (Ayadi & Shaban, 2021; Barajas et al., 2020).

One of the key tools used by regulators and policy makers to enhance MSMEs’ access to finance is guarantee schemes. These schemes act as mechanisms of risk transfer, under which a guarantor (the guarantee scheme) ensures the lender (financial institutions; mainly banks) against a proportion of the possible losses incurred when extending a loan. This helps banks overcome collateral and information asymmetry constraints. The role of Credit Guarantee Schemes (CGSs) became clear during the COVID-19 crisis, as governments in the region provided financial support to credit guarantee schemes, to channel them to sectors in need (Ayadi & Sha’ban, 2021).

Hence, the development of CGSs in the region can have a clear impact on MSME access to finance. In recent years, CGSs witnessed significant growth, not only in terms of volume but also in product innovations, operations and digitalisation.

This policy paper provides an analysis of the role of CGSs in promoting access to finance for MSMEs and the impact of digital strategies. First, this paper provides an overview of MSME financial inclusion in the region and the challenges faced by these firms in accessing formal banking services. Second, it reviews the design and performance of guarantee schemes operating in Egypt, Tunisia, Lebanon, Jordan, Morocco and Algeria (EMGN members from the Southern Mediterranean). The analysis is based on a comprehensive literature review, desk research, a survey and meetings conducted with guarantee schemes operating in these countries. The paper clarifies the role of guarantee schemes in enhancing access to finance for MSMEs and how digital solutions have the potential to enhance their outreach. Finally, it provides policy recommendations on how to strengthen their role.

Link to publication

The post <strong>EMEA published Policy Paper under EMGN on “Guarantee Schemes and MSMEs’ Access to Finance”</strong> appeared first on EMGN.