Saudi Arabia will grant Egypt LE1.57 billion ($200 million) for financing Small and Medium Enterprises (SMEs), reported news website Aswat Masriya on Thursday, citing Egyptian international cooperation minister Sahar Nasr.  

The government will allocate LE250 million ($32 million) from the grant to SMEs in Sinai governorate and the rest will be distributed in the governorates with the highest unemployment rates, said Nasr.

The grant will be disbursed to investors as loans through the Central Bank's recently implemented regulations.

Earlier this week, the Central Bank announced a new SME financing programme as part of an ambitious plan by President Abdel-Fattah El-Sisi to boost finances for small enterprises.

The programme requires lenders to apportion 20 percent of their total loan portfolio for SMEs, with interest rates below 5 percent imposed on firms generating between LE1 million ($128,000) and LE20 million ($2.55 million) a year in revenue.

The banks participating in the four-year programme will be able to deduct the loans from their required reserves at the Central Bank.

Saudi Arabia had vowed to issue new loans to Egypt earlier this month, with $1.5 billion allocated to develop Sinai and $1.2 billion to finance oil purchases over the coming three months.