In many parts of the developing world, particularly in Africa, MSMEs act as essential drivers for employment, growth, and economic welfare. MSMEs account for over 90% of all businesses in sub-Saharan Africa and Northern Africa, contributing upwards of 40% to the GDP on average within each region.
Moreover, approximately 60% of workers in sub-Saharan Africa are employed by MSMEs, accounting for at least 45% of new jobs in Northern Africa (including Arab economies), many of which are taken up by women and youth. These figures highlight that the promotion of MSME development is crucial not only for a thriving economy but also for sustainable livelihoods and enhanced income generation. As one of the largest and fastest-growing markets in Northern Africa with an annual growth rate of 3.6% between 2019 and 2020, Egypt possesses a strong MSME market that has historically been a key driver of its economic growth. It is estimated that MSMEs account for over 90% of active enterprises in Egypt (3.7 million) and represent the third-highest density of MSMEs in the whole of Northern Africa5. In 2017, MSMEs in turn contributed nearly 80% of GDP and nearly 75%of total private sector employment
The objective of this project is to apply and test this value-driven and customer-centric approach in the Egyptian context in order to demonstrate the commercial viability for insurers to serve the MSME market with holistic risk solutions in three prioritised value chains: retail/fast-moving-consumer goods, dairy, and tomatoes. These value chains were selected, in collaboration with the project partners, for their current and potential contribution to inclusive economic development priorities, as well as their commercial viability.
By making these findings available to the Egyptian industry more broadly, this study also aims to catalyse other industries and players to innovate to better serve MSMEs using a segmented and value-driven holistic approach.