The Central Bank of Egypt (CBE) launched an initiative to relieve 3,500 companies and 337,000 individuals from interest payments on non-performing loans, according to a press release issued on Wednesday.

The outstanding interest payments for the targeted businesses – those with less than EGP 10 million in assets – and individual borrowers are estimated at EGP 16.8 billion.

The debt relief initiative will be implemented for borrowers who repay in cash the principal on the loan before 31 December 2018.

This includes borrowers who face lawsuits.

The initiative targets borrowers from the following state-owned banks: Banque Misr, the National Bank of Egypt, Banque du Caire, the United Bank, the Export Development Bank of Egypt, the Egyptian Arab Land Bank, the Agricultural Bank of Egypt, and the Industrial Development & Workers Bank of Egypt.

The CBE initiative also stipulates that if the principal on the loan is paid back, the banks and the clients will drop all lawsuits concerning non-performing loans, collateral will be given back to borrowers, and the debtor will be removed from black lists of the bank and the Egyptian Credit Bureau "I-Score."

Out of the EGP 16.8 billion in outstanding interest payments, EGP 12 billion are owed by businesses, and EGP 4.8 billion by individual borrowers.

The bank said that the initiative targets saving small businesses and clients from financial hardships, as part of the role of the banking sector in the economic reform programme.