Skip to content

Mapping Financial Instruments in MENA

We frequently hear from our stakeholders that access to finance is one of the top priority factors to be addressed in the ecosystem of green entrepreneurs and it has to go hand in hand with other initiatives such as capacity building, technical and policy support. Therefore, during the last two years and in parallel to those activities developed by the Green Entrepreneurship Programme, SwitchMed partnered with the European Federation of Ethical and Alternative Banks (FEBEA). The programme, guided by a vision of establishing a SwitchMed Green Impact Investing Network, has been working to identify and attract other investment networks as well as international and national financial sectors in the MENA region. Thus, we conducted specific missions in pilot countries (Egypt, Tunisia, Morocco, Lebanon and Jordan) to assess the finance ecosystem and the interest of financing institutions regarding investments in eco-innovative or green businesses.

Morocco offers a small ecosystem for the development and financial support of start-ups. The lack of available financing, especially for start-ups and specifically, for green entrepreneurs is confirmed by the fact that banks remain very risk-averse, although there is indeed an interest in new products.  More findings in the final report.

In Egypt, funds for start-ups and green entrepreneurs are normally locally raised and the main investors tend to be existing Egyptian entrepreneurs who want to help develop young Egyptian start-ups. Have a look at the final report.

Despite having a large number of banks in Tunisia, there are still very few funding opportunities for SMEs and/or start-ups. The banks tend to be risk averse and funding seems to be a slow and bureaucratic process that requires a high level of guarantee/ (or) a number of guarantees in place. During the mission, only a few initiatives developed by non-commercial banking institutions with regard to the Green Economy were detected and entrepreneurs do not seem to be aware of them. Check the final reports showing the main findings.

Lebanon has a very sophisticated and well developed financial ‘ecosystem’, especially if we compare it to other countries in the region. However this financial ecosystem remains very focused on the ICT sector. The country offers a very large number of banks and its banking sector shows an excess of liquidity that should potentially allow private sector to easily access capital. However access to finance for early stage SMEs and start-ups (including green start-ups) seems to be a problem for several reasons, mainly related to business models that are difficult to assess and a lack of harmonised criteria to do this. Check the final report here.

In Jordan, access to finance remains as a struggle and there are two challenges that currently stand between innovative green entrepreneurs and financing, which are:
  • Limited awareness of green innovation locally, at both community and institutional levels, is narrowing down financing options for such businesses. Currently in Jordan, renewable energy is the only green economy sector that proves viable for investors to dig in.
  • Green innovation’ market value is not yet recognized by Jordanians, making it difficult for green entrepreneurs to prove market access when approaching financial actors. More finding in the final report.

The lack of available financing for start-ups remains also significant in Palestine, where very little understanding of eco and green projects was evident among bankers and financial institutions employees. In fact, very little support was provided by those intuitions and by the government to such projects. In addition, Green Switchers are facing also legislative, awareness and incentives problems according to the final report drafted after our investigation.