Circular dated December 3, 2019 regarding conducting a field inquiry about suppliers of credit clients

Cairo on: December 3, 2019

Dear Mr. Chairman of the Board,

Greetings,

With reference to the credit granting guidelines issued by the Central Bank of Egypt pursuant to the circular letter dated September 17, 1987, and its subsequent circular letters, and their inclusion of the "necessity that granted credit facilities be based primarily on a deep study of the client's financial position, business results, good reputation, and adherence to fulfilling obligations on time, as well as the purpose for which it is sought and the repayment method and style, among other considerations that may outweigh the importance of provided guarantees."

And in order to emphasize the importance of banks exerting the necessary effort to study the client's activity and verify the use of the facility for the purpose it was granted, and to ensure the integrity of the commercial process upon which financing is granted, I would like to alert your bank to the necessity of doing the following before taking a decision to grant credit to clients for working capital financing consisting of paying supplier invoices:

• Obtaining an approved list from the client regarding suppliers.
• Conducting a field inquiry about local suppliers.
• Obtaining a copy of the commercial registry for suppliers before conducting any transactions on their behalf.

These instructions shall apply from the date thereof, and regarding suppliers of existing clients, a grace period of three months shall be granted to regularize the situation to conduct the field inquiry.

Please be so kind as to take the necessary action to implement the aforementioned decision.

And please accept the highest respect,

Gamal Nagm