Back to the complete issue
Monday, 3 February 2020

Egypt’s banks told not to take legal action against struggling factories

Banks will be required to call off any legal action they’re taking against factories that are unable to pay off their debts as part of a Central Bank of Egypt (CBE) debt relief initiative, CBE Governor Tarek Amer said in a circular to local banks carried by Youm7. The banks also have to hand back cheques written by the factory owners, and require only promissory notes in the future, according to the circular.

Background: The government and the CBE launched a two-part initiative in December aimed at boosting local manufacturing. The first part gave medium-sized factories with annual sales revenues of less than EGP 1 bn access to subsidized loans. The second, meanwhile, required banks to write-off bad loans made to financially-strained factories — starting with loans of up to EGP 10 mn, as a first phase that is in place until the end of the year, and extending to loans exceeding this amount later.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.