The Central Bank of Egypt (CBE) has allocated EGP 5 billion ($647 million) for the banks to loan to medium sized enterprises in the industrial and agricultural sectors.

The loans will be given to performing clients at a 7 percent reduced interest rate over periods of up to 10 years to finance new machinery, equipment, and production lines, the CBE said in a statement published on its website on Monday evening.

Last month, the CBE issued a directive requiring banks to allocate 20 percent of their total loaning portfolio for SMEs, with interest rates of up to 5 percent imposed on firms generating between EGP 1 million and 20 million a year in revenue.

The instructions were part of an initiative launched on 9 January by President Abdel-Fattah El-Sisi, who announced that Egypt’s banks would give EGP 200 billion in loans to small and medium enterprises over the next four years.

The nationwide programme aims to finance 350,000 businesses, creating 4 million new jobs during that period, according to the CBE.

The EGP 5 billion will be allocated over tranches, the CBE said on Monday.

Egypt has cut its growth forecast to between 4 and 4.25 percent of GDP, from a previous target of 5 percent, Minister of Finance Hany Kadry Dimian told Bloomberg on Monday.

The minister cited falling tourism revenues following the crash of a Russian commercial airliner last October as a major reason behind the revised figure.