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Realizing the vital role played by SMEs in the Egyptian economy and the major constraint for these activities to have access to reliable sources of credit and saving services and the unwillingness of the conservative banking system to recognize this sector, NBD has commenced in 1987 , its Micro Credit programs in collaboration with the USAID, Ford Foundation, UNICEF and CIDA ( two of which are women oriented programs ) in 20 branches.

NBD has accordingly designed its Micro credit concept under a lending system based on the banking culture to achieve the social and national goal in accordance with the Egyptian context . It is designed to be responsive to the immediate short credit needs of small entrepreneurs with no commercial record or license.

NBD's main aim in this respect is to provide new employment opportunities by ways of income generation /self employment /self reliance and satisfying this sector's needs to expand their activities, decreasing production costs , innovating their profession and enhancing their standard of living.

Besides its economic and social objectives aiming at improving the quality of life, SME programs have also been targeted at increasing savings awareness among its clients.

SME target groups are small active borrowers and artisans with no commercial record or license who had never had access to banking services in both rural and urban areas throughout upper and lower Egyptian governorates.
In implementing its program, NBD serves potential borrowers on site in the targeted area.

NBD's methodology for implementing SME credit programs departs from the traditional lending structure in Egypt both in terms of targeted types of borrowers and amounts involved.

Upon simple and thorough study of potential and small borrowers, adequate uncollateralized loans with appropriate repayment schedules are disbursed to clients to fulfill their credit needs . The loans size varies from L.E. 250 to L.E. 10000 and is determined after studying the client's credit needs, sort of activity, income cycle and cash flow.

Our project is currently active within 44 branches in 17 governorates.
The program is continuing at present on a self- sustaining basis. NBD has matched credit funds in all its program from its own resources upon full utilization of credit funds provided by international donors.
NBD provided employment opportunities to 367 individuals working in its programs.
The SME lending program, being applicable to virtually all geographic areas of Egypt, is now expanding to embrace NBD's 68 branches and is being financed from NBD's own resources.
The program also has a popular credit life insurance feature and built in financial incentives for the clients to repay in time, such as cash savings requirements, a refundable late payment assessment, and the likelihood of a large repeat loans.

In a report by DEPRA (Development of Economic Policy Reform Analysis) submitted to both the Egyptian government & USAID on SME, it is indicated that special programs for micro and small enterprises lending within banks also appear to be viable.

NBD has expanded its micro lending program rapidly and achieved profitability in a reasonably short period. This has been achieved through efficient operations, controlled loan losses, close performance monitoring rates and high effective interest rate. The program is reaching a significant number of borrowers, and has been successful enough to warrant a decision to implement it through out the bank's branch network. The Egyptian Ministry of Economy also in its June 1998 report on ( A project for National Policy to develop Micro and Small Enterprises in Egypt ) also indicated that one of worthy noted experiments is that of NBD which presented an excellent model to carry out small enterprise finance successfully through institution and without affecting the bank normal activities.

In a report conducted by the UNDP in collaboration with the World Bank NBD has been chosen as a model for the Middle East which relies on Microfinance best practice techniques.