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Saturday, 27 February 2021

Egypt’s central bank extends facilities for tourism workers amid COVID-19

The grace period of loans of tourism sector workers have been extended to the end of 2021

Doaa A.Moneim , Monday 7 Dec 2020
tourism in Egypt
Tourists ride a cart in front of the Great Pyramid of Giza after it reopened for tourist visits following the outbreak of the coronavirus disease, in Greater Cairo, July 1, 2020. Photo by REUTERS
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The Central Bank of Egypt (CBE) announced on Monday it has extended its facilities for the tourism sector and its workers for six months amid the ongoing COVID-19 outbreak.

The grace period of loans of tourism sector workers have been extended to the end of 2021. The first instalment will mature in January 2022, the CBE stated.

On 23 March, the CBE allowed banks to extend credit facilities through which clients can repay their loan instalments over two years with a grace period of six months as a response to the harsh impacts of the pandemic that hit the Egyptian economy.

The move aimed at providing enough money to help workers in the tourism sector pay wages and fulfil their financial obligations.

In June, the CBE approved an initiative launched by the finance ministry in May to support the tourism and hotels sector against the severe repercussions of the pandemic in response to President Abdel-Fattah El-Sisi's orders to support the economic and productive sectors affected by the spread of the virus.

The initiative included offering an EGP 3 billion insurance credit for the CBE to give to national banks to provide three-year loans to hotels and tourist facilities with a discounted interest rate of five percent. 

The CBE raised the maximum limit for loans based on the salary of the workers who benefit from the initiative to EGP 25,000, instead of EGP 15,000.

Meanwhile, the CBE also announced that it has extended its initiative that targets backing the tourism sector for an additional year to2conclude by the end of 2021.

The CBE said the beneficiaries will be allowed during this year to file their requests to delay their obligations for banks for maximum three years, adding that banks will approve the requests after considering each case.

It has also extended the initiative to provide retail loans for tourism sector workers for one year, ending in December 2021.

Within this year, banks are allowed to delay the maturity date of loans obtained for consumption purposes as well as the real-estate loans for six months, starting from the maturity date.

Only clients who are committed in their payment can benefit from this action, according to the CBE.

In December 2019, prior to the outbreak of the pandemic in Egypt, the CBE had announced a large financing plan to support the tourism sector, which included increasing the value of its initiative to renovate and develop hotels from EGP 5 billion to EGP 50 billion.

In March, in response to the pandemic, the CBE instructed all banks to introduce further measures supporting the tourism sector, including introducing credit facilities for tourism enterprises to be paid over a maximum of two years with a six-month grace period. 

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