Regulatory Alerts2017-10-16
A circular dated October 4, 2017 regarding unifying the expenses included in the return price of small and medium enterprise initiatives
The Central Bank of Egypt has outlined measures to expand lending opportunities for small and medium-sized enterprises (SMEs) by reducing interest rates. These new policies, which took effect from November 1, 2021, include offering loans at a lower rate of 5% and a further 66% in February, targeting SMEs in industries such as manufacturing, agriculture, and renewable/alternative energy. This will facilitate financing for working capital for SMEs in these sectors with a reduced interest rate of 16%. In addition, the Central Bank has decided to continue implementing previous measures to ensure that banks pass on savings from lower interbank rates to borrowers, exempting employees from some fees and charges. The Central Bank's goal is to maximize benefits for SMEs, ensuring that interest rates are set at a fixed rate for each program without any increase. This includes loan fees excluding service charges, business bank account fees, tax, and penalties as per the law. These measures will go into effect from November 1st." The original text has been condensed into this concise summary: The Central Bank of Egypt is providing more lending opportunities for small and medium-sized enterprises (SMEs) at lower interest rates to facilitate financing. They plan on ensuring banks pass on savings from lower interbank rates by exempting employees from some fees and charges, and have fixed interest rates without any increase, targeting manufacturing, agriculture, and renewable/alternative energy industries. Measures will go into effect starting November 1st.