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Tuesday, 8 December 2020

Tourism companies, workers get another helping hand

The tourism industry will continue to get a helping hand from the Central Bank of Egypt (CBE) after the bank granted tourism companies debt repayment holidays and more room to take out operating loans, according to two separate CBE circulars (here and here — pdfs). A grace period for all loans taken out since the pandemic took hold in March now expires at the end of December 2021, after having originally been six months following the date of taking out a loan. Companies will then begin paying back the loans in January 2022. The loans also now support monthly wage payments of up to EGP 25k, up from EGP 15k previously, the CBE said.

Debt repayment holidays alongside loans to cover expenses: Until 31 December 2021, tourism companies or any of their employees can walk into their banks and request a repayment freeze of up to three years, the CBE said. Employees may request holidays of up to six months on personal loans, provided they have a good history of meeting repayments.

Also eligible for a payment moratorium: Employees who have taken out loans as part of a 2015 initiative to support tourism workers.

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 to pay wages for up to six months and cover maintenance costs and daily operations.

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