It noted that Egypt is running out of easy ways to privatise. The magazine said that the programme is slowing down as it reaches the heavyweight public sector banks and insurance companies, both burdened by dodgy loans and accounting malpractices. However, the report said that this weak performance was offset by an 11 per cent increase in the market capitalisation which reached LE79 billion in 1998 compared to 71 billion the pervious year. The report attributed this to the significant new offerings by private companies such as Mobil and Orascom. Turning to the atmosphere in which private sector companies are working, The Economist focused on the difficulties facing smaller private businesses in acquiring needed finance.
Egyptian bankers are reluctant to give loans to small businesses for fear of default.
They also demand feasibility studies and business plans that the credit seeker cannot provide. What complicates this problem is that most of small-size businesses do not own their own premises so they can't use them as collateral for getting loans. They are also plagued by problems such as regulatory constraints and overlapping central and local government codes. The Economist said that the entrepreneur who wants to acquire a license to trade has to comply with at least 11 laws. The magazine also pointed out that the overall government's regulatory and legal systems are still troublesome.