The Central Bank of Egypt (CBE) said that the volume of credit facilities granted by banks operating in the domestic market to their customers reached about EGP 1.84tn by the end of November 2019, a decrease of EGP 13.3bn (0.7%), between July 2019 and November 2019.
The CBE attributed this decline to the decrease in government credit facilities by EGP 56.1bn. In contrast, the balance granted to non-government credit facilities increased by EGP 42.8bn, growing at a rate of 3.3%.
The CBE explained that the increase in balances granted to non-government facilities came as a result of the increase in the volume of facilities in local currency by EGP 51bn, while facilities in foreign currencies decreased by EGP 8.2bn.
Credit facilities refer to loans granted by banks to their customers, in addition to letters of credit and guarantee to cover imports.
The CBE indicated in its monthly report issued on Sunday that the private business sector obtained about 59.2% of total non-governmental credit facilities granted by banks to various economic sectors.
It said that the industrial sector came in the forefront of the sectors funded by banks, as it got about 32% of these facilities, followed by the services sector which accounted for 26.2% of them, then the trade sector with 10.8%.
As usual, the agriculture sector received the lowest percentage of the credit facilities granted by banks to various economic sectors, as it acquired only 1.8% of the size of these facilities until the end of November 2019.
According to the CBE, there are other sectors that were not mentioned in detail, especially the household sector, which received about 29.2% of the size of these facilities.
The household sector holds a large share of the volume of loans with banks, and this stake is expected to increase during the coming period, after the CBE raised the maximum loan instalments percentage to 50% of the total borrower’s income instead of 30%.
This comes while the agricultural sector still suffers weak financing, due to the banks avoiding its finance, except the Agriculture Bank of Egypt (ABE) that specialises in financing and servicing this sector.
Earlier this month, the government and the CBE launched an initiative to finance the industrial sector with EGP 100bn, which would raise the volume of financing directed to this sector.