Circular dated November 2, 2020 amending some provisions of the tourism initiative issued under the guarantee of the Ministry of Finance

Cairo: November 2, 2020

Dear Mr. Chairman of the Board,

Greetings,

With reference to the circular letter dated June 16, 2020, and the amendment issued on June 29, 2020, regarding the initiative to finance the repayment of salaries and wages of workers in the tourism sector, as well as basic maintenance and operating expenses, in the amount of 3 billion Egyptian pounds, guaranteed by the Ministry of Finance, and at an interest rate of 5% through the commitment issued by the Central Bank to the Credit Risk Guarantee Company.

In recognition of the efforts made to mitigate the impact of the Corona crisis on workers in the tourism sector, and as a continuation of work to achieve the objectives of the initiative and begin operating establishments, which is one of the most affected sectors and its associated maintenance and operating expenses, an agreement was reached between the Ministry of Finance and the Union of Tourist Chambers to amend some provisions of the initiative to maximize its benefits. Accordingly, the Board of Directors of the Central Bank of Egypt, in its session held on October 14, 2020, decided the following:

1. Amendment of item (2)(a) regarding the repayment of dues of workers in the tourism sector in the form of salaries and wages for a period of three months from the date of granting credit facilities to customers.

To become: Repayment of dues of workers in the tourism sector in the form of salaries and wages for a period of six months from the date of granting credit facilities to customers. And for customers who were granted [facilities] under the initiative, they are allowed to obtain financing to repay an additional three months, bringing the total benefit to six months.

2. Amendment of item (7) regarding allocating 85% of the granted loans to repay salaries and wages of actually insured workers, with a maximum of 10,000 Egyptian pounds per worker monthly, based on the salary statements approved by the establishment, and not exceeding what is fixed in the forms of employment income tax declarations and the company's balance sheet, and allocating the remaining 15% of the granted facilities to finance basic maintenance and operating expenses.

To become: Allocating at least 40% of the granted loans to repay salaries and wages of actually insured workers, with a maximum of 15,000 Egyptian pounds per worker monthly, based on the salary statements approved by the establishment, and not exceeding what is fixed in the forms of employment income tax declarations and the company's balance sheet, and allocating the remaining percentage of the granted facilities to finance maintenance and basic operating expenses.

Furthermore, I would like to emphasize the continued validity of the initiative issued on March 23, 2020, which allowed banks to grant credit facilities to repay salaries, wages, and existing obligations to suppliers and maintenance work for tourism activities. The granted amounts are to be repaid within a maximum period of two years, in addition to a grace period not exceeding 6 months starting from the date of disbursement, during which returns are capitalized. A study is prepared for each customer by the bank, in accordance with the initiative issued pursuant to the circular letter dated January 8, 2020, where it is noted that some banks have stopped granting financing under the umbrella of that initiative without any instructions from the Central Bank to that effect.

Please accept my highest regards,

Gamal Naguib