The National Bank of Egypt (NBE) has managed to support a number of defaulting businesses and bring their economic activities back to life.
Hisham Okasha, Chairperson of NBE, said that the bank has injected credit facilities amounting to about EGP 3.9bn to help 45 clients, whether at NBE or other banks, pay their debts with the banking sector.
He stressed that this important step comes within the framework of the bank’s strategy towards supporting existing projects, even in the case of failure. This would be done under the supervision of the Central Bank of Egypt (CBE), in an effort to encourage development whose positive effects can be reflected on the Egyptian economy in general.
He pointed out that some of these factories play a vital role in the success of development projects, as they are linked to the manufacture of building materials and supplies, which is the cornerstone of all real estate projects. These projects are given top priority by the state and CBE.
Okasha added that 59 factories re-operated with the proper production capacity. He pointed out that some of those factories were completely halted, and some were on the verge of stopping due to the failure of their owners and a large cash deficit. These factories have the potential to continue operating with the efficiency and capacity expected.
Yehia Aboul Fotouh, Vice Chairperson of NBE, said that restarting these factories resulted in an increase in the volume of sales with a growth rate of 67%, by doubling the production capacity of some factories. This also resulted in an increase in the volume of exports of those factories and opening new foreign markets to provide foreign exchange earnings and support the national economy.
He added that the bank’s support was seen in the improvement of the financial performance of these activities, which qualifies them to fulfill their liabilities, whether to banks or to suppliers of raw materials. Moreover, machines and operating requirements were provided to some of these factories.
Aboul Fotouh pointed out that the factories that the bank floated were involved in various economic activities. There were factories for food, medical supplies, metal products, tourism projects, building and contracting materials, metal products, plastic products, clothing, engineering industries, and other value-added activities for the Egyptian economy.
He revealed that the bank is currently studying the flotation of other troubled cases by pumping about EGP 840m into those factories.
Dalia El-Baz, Vice Chairperson of NBE, said that this step contributed significantly to providing more than 20,000 jobs in various activities and specializations of the projects floated, a role that cannot be overlooked in terms of reducing unemployment rates.
She explained that the bank’s pumping of these credit facilities contributed to maintaining a secure source of income for more than 20,000 families, which provides social stability for them. It also alleviated the financial burdens of owners of these projects and helped them pay their debts and avoid going to court. These credit facilities are pumped after thorough studies carried out by the specialized cadres in the bank to ensure making the most use of the injected money, in accordance with the rules stipulated by CBE in this regard.