Egyptian businesses seeking growth capital are set to gain access to a $130 million private equity fund after the European Investment Bank committed $37.5 million to support companies facing persistent financing barriers.

The investment by EIB Global, the bank’s development finance arm, will support Tanmiya Capital Fund II, which exceeded its initial $120 million fundraising target to close at $130 million. The fund will provide capital and managerial support to established Egyptian businesses looking to expand operations, strengthen governance and improve competitiveness.

The deal targets a persistent gap in Egypt’s economy, where micro, small and medium-sized enterprises account for nearly 98% of private sector activity but face high borrowing costs, demanding collateral requirements and administrative hurdles that restrict their access to finance.

Six to eight businesses targeted

Managed by Egyptian private equity firm Tanmiya Capital Ventures, the fund plans to invest in six to eight companies across healthcare, education and training, financial technology, consumer goods, logistics and transportation.

Beyond providing funding, the investment strategy will support businesses in improving management practices and building the capacity needed to scale their operations. The fund is also expected to help create and preserve thousands of jobs in Egypt.

At least 30% of portfolio companies are expected to meet one or more of the EIB’s gender equality financing criteria, extending the fund’s objectives beyond business expansion to include greater gender inclusion.

Financing barriers remain significant

Despite their economic importance, Egyptian smaller businesses face structural obstacles when seeking external capital. These include limited reliable financial records, widespread informality, high interest and borrowing costs, substantial collateral requirements and complex administrative procedures.

Such constraints can make it difficult for otherwise viable companies to secure the long-term financing required to invest, hire workers and compete in growing markets.

The Egyptian government has sought to address the challenge through initiatives such as the Micro, Small and Medium Enterprise Development Agency, which provides financing and business support services to smaller enterprises.

Fundraising exceeds initial target

Tanmiya Capital Fund II secured $130 million at its final close, surpassing its original $120 million target by $10 million, or approximately 8.3%.

The European Investment Bank’s $37.5 million commitment represents about 28.8% of the fund’s final capital. The investment is intended to strengthen access to growth financing for established Egyptian companies while supporting employment and improvements in corporate management.

Tanmiya Capital Ventures, the fund’s manager, will oversee investments in the selected businesses as they pursue expansion and greater competitiveness.