An official Central Bank of Egypt (CBE) source has revealed that there are over 5 million beneficiaries of the CBE initiative to postpone loan installment payments. This includes both individual citizens and companies.
The source said, in statements to the Middle East News Agency (MENA), that there are 4.94 million individuals who postponed payment. Approximately 74,879 companies and legal entities have delayed repayments on loans.
The CBE has already issued an initiative to postpone all repayments without delay fines or fees. The initiative also covers companies and individuals who have been irregular in repaying instalments, and comes as part of measures in the face of the coronavirus pandemic.
For their part, banks operating in the Egyptian market announced their commitment to the CBE initiative, and were quick to clarify the details of that initiative.
The National Bank of Egypt (NBE) said all installment claims and dues from its customers will be suspended for six months from March, and will end in September 2020.
The NBE added that it will review all repayment plans for workers with companies and entities that enjoy partnerships with the bank. The bank announced it will inform these customers, by mid-April, of the modified instalments.
SAIB Bank announced that it will defer loan installments from all customers, including on mortgages, for a period of six months. It has also deferred the minimum payment claim on credit cards for a period of 6 months, starting with the debt owed in March. SAIB Bank added that interest rates will continue as normal.
The bank emphasised it is exempting late payment commissions on credit cards, and will stop local cash withdrawal fees from all ATM machines. Credit and debit card use limits will be increased, with the bank implementing the limits set by the CBE, including on prepaid cards. The bank will also allow free prepaid cards to be issued for both current customers and non-customers.
Tarek El-Khouly, Chairperson of SAIB Bank, said the decision to activate the CBE’s precautionary measures comes at a time when there has been controversy on the part of those obtaining micro-loans from companies and NGOs. This is in light of these bodies refusing to postpone customer loan repayments and instalments, and a continued demand for normal installment collection.
It has been reported that microfinance companies have sent text messages to clients prompting them to pay installments on time. These have also stressed that the postponement decision does not apply to the companies as they are affiliated with the Financial Regulatory Authority (FRA), and not the CBE.
Aman Microfinance Company has agreed to defer the instalments for April, subject to full payment until the end of March, according to the contracted rates of return with the client at the time of the contract.
Mohamed Omran, Head of the FRA, announced the formation of a working group in the Microfinance Unit to follow up on the effects of coronavirus on this area.
This unit currently has 11 employees covering 56 of the largest entities engaged in microfinance activities, representing 98% of the market.
Omran said that the crisis management plan aims to deal with any client complaints received by the authority. He drew attention to the working group which assesses customer conditions, develops effective solutions to their problems, and monitors constraints to intervene first-hand. He added that it is empowered to take decisive and speedy action on any complaints, considering that there are 3.1 million beneficiaries of microfinancing to a tune of over EGP 17 bn.