The Central Bank of Egypt (CBE) announced, on Monday, the amendment of some provisions of the tourism initiative issued with the guarantee of the Ministry of Finance.
The amendments include Clause 2, which provides for the payment of salaries for tourism sector workers for a period of six months starting from the date of the credit facilities for clients. The new clause has removed the six-month period, while setting a cap of EGP 30m per client and EGP 40m per client and associates.
The amendment also relates to Clause 4, regarding the three-year period of facilitation, including a general grace period. It provides for a three-month withdrawal period and repayment system over two years.
Clause 5 has been cancelled, which stipulated that the initiative would end with the complete exhaustion of the allocated EGP 3bn. The new amendment stipulates that the initiative would end after exhausting the amount allocated or by June 2021, whichever is closer.
The CBE amended Clause 13, allowing companies benefiting from the initiative, issued on 8 January 2020, to replace and renew hotel accommodation, floating hotels, and tourist transport fleets. This also relates to the amendment issued on 23 March 2020, according to several conditions.
These conditions include that the months of grants do not overlap for each facility granted, and that same-month financing is not obtained twice.
The CBE indicated that in the event that the customer stops paying three consecutive instalments, the prevailing interest rates shall be applied since the date of the grant. If the cessation of payment comes after the commencement of payment, the prevailing interest rates shall be applied since the date of discontinuation of payment.
At the same time, the CBE confirmed that the rest of the terms of the initiative will remain in effect as they are.
In June 2020, the CBE allocated EGP 3bn to the tourism companies financing initiative worth a total of EGP 50bn. The financing came with the aim of granting credit facilities to companies operating in the tourism sector to finance the payment of workers’ salaries.
This is in addition to financing basic maintenance and operating expenses, with the guarantee of the Ministry of Finance.