The Central Bank of Egypt (CBE) instructed on 11 January banks to raise their lending to small and midsize enterprises (SMEs) to 20% of their loan books over the next four years, up from 5-10% currently, according to Moody's Investors Services’ estimates. Along with other government-led growth-enhancing reforms, the CBE’s regulation will likely shore up the country’s fragile economic recovery, a credit positive for Egypt (B3 stable), Moody’s said in a Monday statement. However, although the CBE has provided tools to partly mitigate the associated funding and credit risks, the rapid growth in SME loans necessary to reach the 20% target will likely weaken loan performance, a credit negative for Egyptian banks. (Amwal Al Ghad)