Circular dated February 22, 2016 regarding the initiative for medium-sized companies operating in the industrial and agricultural sectors

Cairo: February 22, 2016

To: The Chairman of the Board of Directors of the Bank

With reference to the Central Bank of Egypt's initiative to encourage banks to grant facilities to small and medium-sized enterprises (SMEs), issued on January 11, 2016, which directed banks to give utmost care to the smallest and very small companies by providing credit facilities at low interest rates of 5% annually reducing, and in continuation of the efforts made in this regard, and with a keenness to support medium-sized companies in productive sectors, especially the industry and agriculture sectors, in order to achieve real and sustainable development that raises the national product and standard of living, and provides new job opportunities, it has been decided to issue an initiative targeting the availability of medium and long-term financing for regular medium-sized companies operating in the fields of Industry and Agriculture at reduced interest rates determined by the Executive Management of the Central Bank of Egypt as follows:

Item	Value
Reducing Interest Rate (%)	7%
Loan Duration	Up to 10 Years

Based on the above, the Board of Directors of the Central Bank of Egypt, in its meeting held on February 17, 2016, decided the following:

1. The Central Bank of Egypt allocates an amount of 5 billion Egyptian pounds to be lent by banks at lending rates (as of December 7, 2015) to regular medium-sized companies registered with the Industrial Development Authority or newly established in the fields of Industry and Agriculture for the purpose of financing machines, equipment, or new production lines, for a maximum duration of 10 years, subject to the following conditions:

   a. A fixed rate from the date of grant throughout the loan period.

   b- Reduced interest rates (calculated on a reducing balance) determined by the Executive Management of the Central Bank of Egypt are applied.

   c- For regular enterprises, the applied interest rate on the enterprise cannot be changed from the date of grant for the bank during the loan period, and the interest rate can be changed according to the enterprise.

   d- The Executive Management of the Central Bank of Egypt has the right to review the terms for new banks directed to banks according to market considerations once a year, with a maximum limit.

   e- The amount is made available to banks against Treasury bills or bonds renewed periodically.

2. Banks shall repay the loan principal in quarterly installments according to agreed repayment schedules and grace periods. Interest shall be paid monthly.

3. In all cases, the enterprise is not entitled to benefit from the initiative provided by the Central Bank of Egypt except once only, with a maximum amount of 20 million Egyptian pounds through a single bank.

4. The Supervision and Inspection Sector of the Central Bank of Egypt is directed to issue a detailed memorandum including the procedures and rules for implementing the provisions of this decision.

Furthermore, banks wishing to benefit from the initiative must make the subsidized funds available from the Central Bank of Egypt to medium-sized companies operating in the fields of Industry and Agriculture in a manner that achieves added value for the economy, reduces imports, and targets exports.

And take the necessary steps for the implementation of the aforementioned decision effective from the date of its issuance. Please be kind enough to alert the concerned parties. Yours sincerely,

Tarek Amer