Original article: https://ufmsecretariat.org/human-story/nagla-bahr/

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!