SME Franchise Finance in Egypt

Credit Risk, GBRW Consulting, GBRW Group, Risk Management, SME Banking, Sustainable & Development Finance

One of the best routes to building a successful business is to replicate an already successful model.

Franchising is a great way to achieve this and covers many more industry sectors than the best known fast-food and coffee franchises. Franchising models can cover businesses as diverse as business and professional services, health and fitness, transport and logistics, travel and accommodation, entertainment, domestic and industrial services, and many more. For banks, franchise customers represent a very interesting customer segment with a significantly improved risk profile and growth prospects.

GBRW was selected to support the Franchising Sector Support Program (FSSP) Loan Agreement between the African Development Bank (AfDB) and the Government of Egypt through the Social Fund for Development (SFD). It comprises a US$ 40million line of credit with the objective of creating 375 franchise outlets directly employing over 7,000 staff. The aim of the technical assistance was to develop a detailed Training Needs Analysis (TNA) for the Programme – identifying gaps in the skills and expertise of the bankers, legal professionals, accountants, consultants and advisors, and other professional services vendors required to support the franchise sector. In addition, a comprehensive credit assessment process manual was developed specifically for the needs of the franchise sector.

Deliverables included:

- A detailed business process mapping exercise for the SFD franchise finance operation;

- The identification and development of ethical franchise concepts for Egypt;

- A thorough Training Needs Analysis for the Egyptian franchise finance sector;

- Practical support in facilitating the different stakeholder and in developing a franchise finance pipeline for SFD; and

- A comprehensive credit assessment process manual focused on franchise finance.