The Central Bank of Egypt (CBE) has decided to extend the validity period of its initiative to support the tourism sector for an additional year, until the end of 2021.
During that period, any requests for postponement of bank entitlements shall be accepted for a maximum period of three years. The CBE said that the initiative contains indicative determinants, through which banks study each case separately and take the appropriate decision, while the remaining conditions of the initiative remain in effect as they.
The CBE also decided to extend the validity period of the retail loan initiative for workers in the tourism sector for a year, which will also conclude at the end of 2021.
During that period, banks are allowed to carry forward, for an additional six months from the date of their maturity, the entitlements of customers regarding consumer loans and real estate loans for personal housing. This applies to regular customers only, according to the CBE’s 30 September 2020 position, with no delayed interest for that period as the remaining provisions of the initiative remain in effect.
The CBE stressed that the outstanding provisions should not be prejudiced, taking into consideration the requirements of the International Financial Reporting Standard (IFRS9).
It pointed out that, in order to facilitate workers in the tourism sector, it is entitled to postpone the entitlements of those customers who have previously benefited from the retail loan initiative for the sector workers since its issuance on 7 December 2015.
Commenting on this decision, Ehab Abdel Aal, a member of the General Assembly of the Chamber of Tourism Companies and a treasurer of the Cultural Tourism Association and Tamer Nabil, Secretary General of the Investors Association in the Red Sea and member of the Egyptian Hotel Association (EHA), praised this decision. They said that it was much needed, as Egypt’s tourism sector has still not recovered from the repercussions of the novel coronavirus (COVID-19) pandemic.
Abdel Aal said that he extended the period until the end of 2021, because experts project that the country’s tourism sector will recover by October 2021.
Abdel Aal and Nabil also called on the CBE to ensure that Egypt’s private sector banks are flexible and committed to help in facilitating these initiatives.
They both praised all the state’s initiatives and the loans facilities aimed at supporting the tourism sector, and which have been in place since the start of the COVID-19 pandemic. However, they noted the private sector’s intransigence in granting these facilities and loans, whilst also increasing the amount of bureaucracy, making the period for receiving the benefits of these facilities too long.
The CBE also issued on Monday an amendment to some provisions of the initiatives to replace and renew hotels and finance the payment of salaries with the guarantee of the Ministry of Finance.