Regulatory Alerts2017-07-13
A circular dated July 12, 2017 regarding financing small enterprises operating in the agricultural field, agricultural processing, fish, poultry and animal wealth.
The letter, dated July 12, 2017, is addressed to the Chairman of the Board of Directors of a bank in Cairo, Egypt. It refers to the Egyptian Central Bank's initiative of January 11, 2016, which aims to encourage banks to finance small and medium-sized enterprises by offering low-interest credit facilities and mandating that 20% of banks' credit portfolios be allocated to these businesses. The letter also mentions subsequent initiatives that modified the definition of small and medium-sized enterprises and added microfinance to the 20% allocation. Due to the importance of the agricultural sector to the Egyptian economy and the fact that most companies in this sector have a turnover of less than one million Egyptian pounds, the Central Bank of Egypt has decided to reduce the minimum turnover requirement for small businesses in this sector to 250,000 Egyptian pounds, allowing them to access credit facilities at a reduced interest rate of 5%.