The development bank of Austria, Oesterreichische Entwicklungsbank (OeEB) has committed €10m ($10.64m) to the SANAD Fund for MSME (micro, small and medium enterprises) in the Middle East and North Africa (MENA).

Andrea Hagmann, member of OeEB's executive board, said: “The investment in SANAD underscores OeEB's development objectives and expresses our continued commitment to foster economic growth in the MENA region. MSMEs form the backbone of the region's economies and, therefore, providing access to much-needed credit will help create jobs."

The amount will be invested in the senior tranche of SANAD's debt sub-fund to strengthen the fund's capital base and increase support for its partner institutions.

The investment will have the effect of facilitating more than 3,500 new loans to local micro, small and medium enterprises (MSMEs) in the region.

Wolfgang Reuss, Chairman of SANAD's Board of Directors, said: "We are delighted that OeEB has joined SANAD as a strategic partner in spurring economic growth. This investment will allow SANAD to further increase outreach in our target region and facilitate access to finance for micro, small and medium enterprises."

Initiated and funded by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Union in August 2011, the SANAD Fund for MSME provides medium- and long-term debt and equity financing to commercial banks, microfinance institutions and other financial institutions in the Middle East and North Africa.

The purpose of SANAD is to strengthen the local micro-, small and medium enterprise sector and financial markets in line with the principles of responsible finance.

In Africa, eligible countries are currently Algeria, Egypt, Morocco and Tunisia.

The fund’s activities are supported by a technical assistance facility, which provides capacity-building support to partner institutions.

SANAD is a public-private partnership, registered in Luxembourg as a SICAV-SIF, an open-ended investment company able to issue shares and Notes at regular intervals and closings in line with future Fund growth.

Its target investor base is comprised of donor agencies, international financial institutions and institutional private investors, including the European Commission, the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW and Switzerland's State Secretariat for Economic Affairs (SECO).

OeEB has been operating as the official development bank of Austria since March 2008.

It specializes in the provision of long-term finance for the implementation of private sector projects in developing countries, which create sustainable development.

Additionally, OeEB provides technical assistance, which can be used to enhance the developmental impact of projects.