The headquarters of Egypt's Central Bank are seen in downtown Cairo (Reuters)
The Central Bank of Egypt (CBE) has added newly founded medium-sized enterprises and small firms that are affiliated with big entities to its EGP 100 billion financing initiative to support the industrial, agricultural and construction sectors.
The action was taken in order to help these firms recover amid the COVID-19 crisis by providing loans under the initiative at an 8 percent decreasing interest rate, the CBE said in a statement.
In December 2019, the central bank launched an initiative to support the industrial sector that provided loans to the manufacturing and agriculture sector at a decreasing interest rate of 10 percent.
The bank then began to include more sectors as beneficiaries, and decreased the interest rate to 8 percent, in order to contain the negative consequences of the coronavirus crisis.
Total sums provided through CBE initiatives so far exceed EGP 700 billion, including EGP 360 billion to back the SME sector, EGP 100 billion to support the industrial and agricultural sectors, EGP 100 billion to support the real estate sector -- EGP 50 billion for real estate developers, and EGP 50 billion for real estate housing for the low income classes -- in addition to a number of initiatives to support the tourism sector, remove the debts of stalled factories, and postpone loan repayments.
On Wednesday, the central bank announced that it has approved, in cooperation with the finance ministry, the provision of EGP 3 billion to pay salaries in the tourism sector, out of the EGP 50 billion that was designated for maintenance and renovation in the sector.
The central bank also said that the firms that seek to benefit from the initiative must commit to not reducing their workforce from its size in December 2019.
On 11 May, the finance ministry launched an initiative to support the tourism sector against the harsh impacts of the COVID-19 pandemic.
Finance Minister Mohamed Maait said the initiative came 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 includes offering an EGP 3 billion credit guarantee to the Central Bank of Egypt (CBE), for it in turn to give national banks funds to provide three-year loans to hotels and touristic facilities with a 5 percent interest rate, Maait said.
He said that the initiative covers the salaries of employees working in hotels and touristic facilities, which will provide lists of employees’ names and bank accounts in order for their salaries to be directly transferred.
The initiative also covers operation costs and employees' salaries in small and medium-sized enterprises.
Maait said a committee comprising representatives from the finance ministry, the CBE, the tourism and antiquities ministry, and banks that will offer loans has been formed to follow up on the implementation of the initiative.
He added that hotels and touristic facilities have been exempted from paying real estate taxes and dues on these facilities for six months.
In April, Planning Minister Hala El-Saeed said that tourism revenues in the current 2019/2020 fiscal year, which ends on 30 June, are expected to be about $11 billion, instead of the $16 billion expected before the pandemic.