Egyptian banks to forgive interest on certain loans
The Central Bank of Egypt is willing to overlook the interest on some customers' loans to recover principal that otherwise might not be repaid.
CAIRO — The Central Bank of Egypt (CBE) has launched an initiative to help some struggling companies and individuals repay their loans and regain their credit standing, which in turn will help banks resolve nonperforming loans.
The initiative covers companies whose nonperforming loans don't exceed 10 million pounds (around $558,500), as well as individuals' loans, excluding credit card balances. Participating customers who repay 100% of their loan principal by the end of this year will be exempted from all accrued and unpaid interest — an amount totaling 16.8 billion Egyptian pounds ($938 million as of July 10).
According to a June 27 CBE statement, more than 3,500 companies and individuals will benefit from the initiative through eight banks: the National Bank of Egypt, Banque Misr, Banque du Caire, the Export Development Bank of Egypt, the Egyptian Arab Land Bank, the Agricultural Bank of Egyptian, the United Bank of Egypt and the Industrial Development and Workers Bank of Egypt. CBE implemented the initiative June 27, targeting customers who are serious about settling their debts and can return to economic viability.
Medhat el-Sherif, undersecretary of the parliamentary Commission for Economic Affairs, told Al-Monitor by phone, “The CBE’s initiative will have a positive impact because of the large number of beneficiaries that it targets, especially [small- and medium-sized enterprises (SMEs)] with limited debts.”
