Central Bank of Egypt gives $128mln to support tourism

CAIRO: The Central Bank of Egypt has issued 2 billion Egyptian pounds ($128 million) in tranches to support the tourism sector.

According to a statement by the bank, the first tranche will start with an amount of 1 billion Egyptian pounds for the Credit Risk Guarantee Company. This is to ensure the balances of the guarantees issued by the company for banks, to cover part of the associated risks and to finance tourism companies.

The statement said that the move comes within the initiative to replace and renew land hotels, floating hotels and tourist transport companies. It does not include the 3 billion Egyptian pounds that was allocated from the Ministry of Finance’s initiative.

The Egyptian Central Bank said that the decision was in light of the initiative issued in January 2020 and its amendments, according to which an amount of 50 billion Egyptian pounds was made available through banks at a return rate of 8 percent.

The move is part of the monitoring of the initiative’s performance and the Central Bank’s desire to continue supporting the tourism sector in light of the coronavirus crisis and its continuing impact.

The statement said that the decision stipulated that the maximum limit of the facility guaranteed by the pledge should not exceed 400 million Egyptian pounds for one client, the client and the parties associated with it.

According to the new decision by the bank’s board of directors, facilities can be granted as part of the initiative to replace and renew accommodation hotels, floating hotels and tourist transport companies at a value that exceeds the prescribed maximum, without benefiting from the pledge issued in favor of the Credit Risk Guarantee Company. This is in addition to using the pledge to guarantee facilities for new customers or increase the existing facilities.

The Egyptian Central Bank said that the initiative applies to financing the replacement and renewal of tourism facilities that already exist and not those under construction.

It also said that customers who were proven to be involved in fraudulent operations with the bank in the past should not be allowed to benefit from the initiative.