Social Entrepreneurship in Egypt: Challenges and Opportunities
(Pictured: Abduallah Abdel Qassim, 47, a partner in aluminum shop making window frames that received microloan from Social Welfare Fund for equipment. Image credit: World Bank Photo Collection).
High rates of youth unemployment across the Middle East and North Africa were a major catalyst for the Arab Spring revolutions. To help address this pressing issue, the Development Marketplace is preparing for a country-level competition in Egypt early next year. The proposed DM competition will focus on social entrepreneurs with projects that have a strong impact on creating sustainable job opportunities, especially for low-income and marginalized groups. The main focus of the Egypt DM will be on supporting projects in the agricultural supply chain sector.
In order to understand the bigger picture of social entrepreneurship in Egypt, I spoke with Ehaab Abdou, who recently joined the Development Marketplace team to develop the Egypt DM program. Prior to coming to the Bank Ehaab was an Ashoka Fellow and advisor for the Middle East Youth Initiative at Brookings. For Ehaab, there are three main challenges facing social entrepreneurship in the MENA region and in Egypt in particular:
– Social entrepreneurship infrastructure is missing. There are few supporting intermediaries that are present in the region, such as SE incubators, angel investor networks, replication funds, etc, that SEs require to develop and go to scale.
– Policy and regulatory frameworks are restrictive. Capital market laws must be amended to encourage social investment funds to participate in the region. In addition, under current laws, NGOs are not allowed to be self-sufficient through hybrid models; they remain heavily donor-driven.
– Cultural mindsets and educational systems don’t provide a supportive environment for SEs to flourish. Few would argue that critical thinking and analytical skills are essential for building a new generation of social entrepreneurs. However, schools in the region need to encourage critical thinking and reasoning skill sets to develop in the classroom. Additionally, a greater emphasis on community service would expose budding entrepreneurs to recognize and find solutions to the problems in their local communities.
Although the social entrepreneurship field in Egypt has its challenges, there have been some recent positive trends. The SE ecosystem is growing; for example, Technoserve is likely to expand its work to Egypt, joining other major players like Ashoka, Acumen, Endeavor, Schwab, and Skoll Foundation, all of whom have been working in the region for the last few years.
Plans to hold public-private dialogues around the restrictive regulatory framework are in the making. Additionally, civil society groups interested in becoming implementing partners of the Egypt DM program have expressed a desire to work collaboratively and not competitively. There is a strong sense of urgency now to build on this recent momentum and offer social innovators in Egypt the support they need to transform society. (Pictured: A Yemeni woman entrepreneur who rents the use of this pool table to the residents of her town. Image credit: World Bank photo collection).
As Ehaab asserts:
“For social entrepreneurship and inclusive business models to thrive and play their desired and much needed role in the region’s development, we have to create the necessary ecosystem which includes the missing intermediaries as well as addressing the restrictive legal and regulatory framework.”