Banks support Egypt’s tourism sector with EGP3bln guaranteed by Finance Min.

Ministry of Finance agreed to issue a guarantee of 3 billion Egyptian pounds for the Central Bank of Egypt (CBE), to be used to support the tourism sector and its workers.

The Board of Directors of the CBE agreed to allocate 3 billion pounds out of the  50 billion  pounds available for the initiative to replace and renew tourist facilities, in order to finance the payment of salaries and wages of workers in tourism sector with the aim of supporting them in preserving employment.

The initiative includes reimbursement of maintenance and operation expenses with a 5 percent decrease in interest, in light of President Abdel Fatah al-Sisi’s keenness to support the sectors most affected by coronavirus pandemic, especially the tourism sector.

The guarantee will be used to issue a pledge of  3 billion pounds  in favor of the credit risk guarantee company, in order to cover 100 percent of the risks associated with financing the tourism sector companies, which will motivate banks to finance these companies under the current circumstances.

In March, CBE decided to grant tourism facilities two-year loans, in addition to a grace period of 6 months, to pay the salaries of employees as well as their obligations towards suppliers and maintenance work.

CBE referred to the initiative issued to support the tourism sector through allocating around 50 billion pounds to finance companies and tourist facilities that want to replace and renew hotels and tourism transportation fleets at a rate of 8 percent. “A new article was added to the initiative that includes the provision of credit facilities for a period of 2 years.”

By the end of 2019, CBE announced the largest financing plan to support the tourism industry, which includes increasing the value of its initiative to renovate and develop hotels from 5 billion pounds to  50 billion pounds.