CBE offers support for financially distressed SMEs: Financially distressed SMEs at risk of default will be given more time — and more avenues — to settle their debts under a raft of new decisions the Central Bank of Egypt (CBE) announced this week, according to a press release (pdf). The policy measures come as the CBE looks to alleviate the impact of covid-19 on small businesses.

The decisions involve easing regulations on SMEs…: For starters, small businesses now have a longer time frame to get their ducks in a row before they can be classified by a bank as “distressed.” Credit facilities for the companies will be restructured based on their available funds and their ability to pay, while alternative options — like extending the tenor of their facilities and providing grace periods for payment — will be offered for support.

…and tightening regulations on how banks manage non-performing loans: A unified regulatory framework for managing non-performing loans will be applied to all banks, and will include setting a clear time frame to classify loans as bad debt, as well as clear guidelines for handling them. The statement is unclear on what the new guidelines will be, but they pertain to the scheduling of payments for non-performing loans.

This is the latest in a string of CBE measures to increase SME support: The new measures come as part of the CBE’s financial inclusion strategy, launched in 2019, which outlines SME support as one of its key pillars. The bank had also put in place earlier this year requirements for banks to increase micro, small, and medium enterprises’ share of their loan portfolios.