The Central Bank of Egypt (CBE) said that the services sector, notably tourism, is the second largest economic sector that benefits from bank loans in Egypt, following the industrial sector which ranks first.
The CBE added in a recent report that the services sector obtained 29.75% of total credit facilities granted by banks to customers until the end of October 2017.
A credit facility is a type of loan made in a business or corporate finance context, granted by banks to customers, including revolving credit, term loans, committed facilities, and letters of credit used for importing operations.
According to the CBE, the total credit facilities’ value reached about EGP 1.4331tn by the end of October 2017.
The report said that the private business sector received 61.8% of the total credit facilities, of which 35.4% went to the industrial sector, followed by the trade sector at 9.6%, and the agriculture sector at only 1%.
The report noted that several other sectors, of which only the household sector was named, accounted for 23.2% of the total credit facilities.
According to a general manager of one of the private banks operating in the local market, who spoke on condition of anonymity, the services and industrial sectors receive adequate financing from banks, however, the industrial sector still needs double the funds it was granted so far, with the aim to increase its efficiency and activities. The industrial sector largely contributes to achieving high growth rates and reducing unemployment, he added.
The source pointed out that the services sector is very important, and most countries in the world give priority to this sector along with the industrial sector, stressing that it still needs more funding.
The Egyptian tourism sector was severely harmed after the 25 January 2011 Revolution, forcing banks to stop offering loans to it. However, the CBE launched several initiatives to support tourism, including scheduling employees’ debts and injecting new investments only for renewing touristic facilities.