Regulatory Alerts2016-03-08
Added · Updated
Circular dated January 11, 2016 regarding encouraging banks to grant loans and credit facilities to companies and small and medium enterprises
The Central Bank of Egypt mandates that banks increase their loan and credit facility portfolio for very small and small enterprises to at least 20% of total facilities within four years. It modifies risk weight requirements for very small and small enterprises, allowing a 75% risk weight instead of annual sales volume thresholds, and permits full deduction of direct Egyptian Pound loans to these entities from the 10% reserve requirement if interest rates do not exceed 5% and specific sectoral and geographic criteria are met. Banks are required to establish specialized organizational units for SME financing and submit a detailed implementation timeline to the Supervision and Inspection Sector by the end of February 2016.