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Wednesday, 25 March 2020

CBE extends tourism support initiative with two-year soft loans

REGULATION WATCH- CBE extends its support to the tourism sector with two-year soft loans: The Central Bank of Egypt (CBE) will provide soft loans to tourism companies to pay wages, commitments to suppliers, and maintenance as part of the EGP 50 bn tourism initiative it launched last year, according to an official statement (pdf). Hotels, tour operators, restaurants, and tourism transport companies will be able to access loans with a tenor of two years and a six-month grace period at an interest rate of 8%.

Background: The CBE last year increased funding to support the tourism sector to EGP 50 bn, allowing more companies in the sector to access soft loans to renovate and upgrade tourism infrastructure then reduced the interest rate on this initiative along with two others earlier this month following its emergency 300 bps rate cut to help struggling businesses cope with the repercussions of the covid-19 outbreak.

In related news: The Hotels chamber is in negotiations with the Manpower Ministry to access the emergency fund to pay six months’ of salaries to hotel staff from April. A senior official in the sector said that some 500k employees are entitled to receive support from the fund but that there was disagreement with the ministry about whether it should cover the salaries of around 200k seasonal workers. The labor emergency fund was set up in 2002 to provide assistance to workers in businesses that have closed.

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