The Central Bank of Egypt is moving to support defaults in the small business sector

The Board of Directors of the Central Bank of Egypt has issued a package of decisions aimed at supporting small and medium-sized enterprises with the aim of relieving them and supporting them in continuing to work and produce, preserve employment and provide the liquidity necessary to continue the production processes.

The decision comes, according to a statement released today, Tuesday, in light of the directives according to which all sectors of the state must join forces to support customers in difficulties, to remove them from their stumbling block and reintegrate them into the banking sector, and in light of the continuing repercussions of the Corona virus crisis and its impact on various economic sectors, in particular the impact on The ability of small and medium-sized enterprises to satisfy their bonds with banks, which can increase the chances of accumulating debt on them.

The decisions aim to facilitate some of the regulatory compliance for small and medium-sized enterprises relating to their classification as defaulting customers, in light of the fact that they are the most affected by the repercussions of the Corona virus crisis, still today. in course. concessions for defaulting customers in based on their cash flows and repayment capacity, with the introduction of alternatives to support them, including the increase in the duration of the facilities, the restructuring of rate due, as well as the granting of adequate periods of grace.

In a connected context, and in order to unify the practices followed in management of non-performing loans by banks, it was decided to establish a supervisory framework for non-performing loans, since the instructions issued by the Central Bank established the foundations for the treatment of loans covered by guarantees in money and the like in case of their irregularity, as well as the determination of a specific time frame during which the banks will carry out the irregular operations, as well as the procedures to be adopted in cases of planning and liquidation of irregular customers. The decision finally stressed the need to submit in via the situation of irregular loans to the boards of banks of banks continued and to take the necessary measures for them follow-up.

This is in the light of a package of measures adopted at the state level with the aim of restarting factories and companies in order to achieve the desired growth rates. In line with the Central Bank’s current tendency to support small and medium-sized enterprises in in order to support the national economy.

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