Tourism support program extended by three months
SMART POLICY- Tourism companies will be able to receive emergency funding to cover salaries for another three months after the central bank amended its subsidized loan program introduced in response to the covid-19 pandemic, according to a CBE circular (pdf) published Monday. Under the original terms of the initiative, tourism companies were only allowed to use the funding to cover three months of employee wages but under the changes announced this week can now pay wages for up to six months. Companies must also now allocate at least 40% of their loans to paying salaries, down from the 85% previously, and will be able to use the remainder to cover maintenance and operational costs.
Background: The CBE in March modified its EGP 50 bn program to support the tourism sector in response to the pandemic, providing low-interest loans to companies struggling to survive as international travel ground to a halt. The program offers two-year loans to companies which pay a reduced 5% interest rate following a six-month grace period.