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| Egypt Student Loan Facility |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26554 |
| Company name | Magrabi Hospitals & Centers, Ltd. |
| Country | Egypt |
| Sector | Education Services |
| Environmental category | C |
| Department | Health and Education |
| Status | Pending Approval |
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| Date SPI disclosed | May 21, 2008 |
| Projected board date | June 23, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed project is a student loan program for university students in Egypt, whereby IFC will share risk on the portfolio of loans. The loan portfolio will be originated and managed by an experienced bank on a commercial basis. The maximum size of the portfolio will be $39 million equivalent.
Loans will be used by students to pay tuition at private universities for undergraduate and graduate education. The maturity of the loans will be up to eight years which will enable students to repay the loans from their earnings after graduation. |
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| Project sponsor and major shareholders of project company |
Students and their families in Egypt are finding it more and more difficult to pay for tuition fees at private universities. The Al-Noor Magrabi Foundation, Sawiris Foundation for Social Development and the Al-Alfi Foundation are contributing funds to establish a student loan program. This loan program will make education accessible by providing a financing source for tuition fees.
The Al-Noor Magrabi Foundation was founded in 1999 by Akef Magragi, owner and founder of the Magrabi Group. This privately owned hospital and healthcare group was founded in 1955 and operates in KSA, Egypt, UAE, Oman, Qatar and Yemen. Sawiris Foundation for Social Development was established in April 2001, with an endowment from the Sawiris family, whose members are Egyptian business entrepreneurs in construction, telecommunications, and tourism. Mr. Moataz Al-Alfi is a well known Egyptian businessman.
The bank who will be funding and administering the student loan portfolio is Credit Agricole Egypt (CAE). CAE was established in September 2006 following the merger of Calyon Bank Egypt, the Egyptian affiliate of Crédit Agricole Group, and the Egyptian American Bank. CAE is majority controlled by Credit Agricole Group. The Credit Agricole Group is among the top financial institutions in the world by capital base and has operations in 60 countries across the world. |
| Total project cost and amount and nature of IFC's investment |
| The maximum portfolio size will be $39 million equivalent. The proposed IFC investment is in the form of a risk sharing facility with the bank. IFC will share senior risk on the portfolio of up to a maximum $17 million equivalent. |
| Location of project and description of site |
| Students borrowing from the program will be Egyptian citizens attending private universities located in and around Cairo, Egypt. Credit Agricole Egypt who will be administrating and working alongside the universities, has headquarters based in downtown Cairo. |
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| Anticipated development impact of the project |
| The project is expected to have high development impact as it will provide benefits for students, universities and banks. The Facility will address the lack of a student financing product in the Egyptian market, potentially giving whole new pools of students’ access to education. The universities will benefit from increased enrollments and the enrollment of all academically qualified students. The Facility will demonstrate to the bank that education financing can be a viable and profitable business and increase the bank’s access to new customers. |
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| IFC's expected development contribution |
| IFC’s role in this project has been to bring all parties together and to structure the program. IFC has developed and launched similar risk sharing facilities in Indonesia, Chile and Brazil and this experience in both structured finance products and student lending has placed IFC in a unique position to take the lead in structuring this Facility. Credit Agricole Egypt has not had prior experience in student loans, and IFC’s participation is therefore seen as crucial to provide comfort to the bank and to enable them to provide student loans at reasonable interest rates. |
| Environmental and social issues - Category C |
| This project has been classified as a Category C project according to IFC’s Environmental and Social Review Procedure. No further review is required. |
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| For inquiries about the project, contact: |
Dr. Akef Magrabi
Al Noor-Magrabi Foundation
El-Sayeda Nafisa Square
P.O. Box 124 Manial El-Roda
11553 Cairo
Egypt
Credit Agricole Egypt
Cairo Center Building
2 Abdel Kader Hamza Street
Cairo
Egypt |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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