CAIRO, Jan 10 (Reuters) - Egypt's central bank on Sunday issued guidelines on how it will incentivise banks to participate in a "comprehensive programme" to help finance small- and medium-sized enterprises in the latest move to try and create jobs and support its battered economy.

President Abdel Fattah al-Sisi announced the SME initiative on Saturday, saying that Egypt's banks would inject 200 billion Egyptian pounds ($25 billion) into supporting businesses over the next four years. ID:nL8N14T06U

Egypt's economy has been struggling to recover since the popular uprising in 2011 drove foreign investors and tourists away. The uprising was partly fuelled by anger over the lack of job prospects for young Egyptians.

Sisi had pledged to reduce joblessness to 10 percent over the next five years. The unemployment level reached 12.8 percent in December.

The central bank said on Sunday that under the new programme interest rates on loans offered to SMEs would not exceed 5 percent.

In return for issuing the loans, participating banks will be permitted to reduce their level of required reserves held at the central bank by an amount equivalent to what they lend.

In December the central bank raised its overnight deposit rate and lending rate by 0.50 percentage points to 9.25 percent and 10.25 respectively.

The SME programme aims to finance 350,000 companies and create 4 million new job opportunities over a period of four years, a central bank statement said.

It aims to push the percentage of loans awarded to SMEs in the Egyptian economy up to at least 20 percent, the statement added.

Egypt's economy grew by about 4.2 percent in the last fiscal year and the government forecasts growth of around 5 percent in the current 2015/16 year.

However, the World Bank on Sunday cut its projected growth rate for Egypt in 2015/16 to 3.8 percent from 4.2 percent on the back of weaker global growth.

(Reporting by Eric Knecht; Editing by Greg Mahlich) ((Eric.Knecht@thomsonreuters.com; +20 2 23948181; Reuters Messaging: eric.knecht@thomsonreuters.com@reuters.net))

Keywords: EGYPT ECONOMY/SME