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CBE allocates EGP 3bn from tourism initiative for salaries, maintenance works Finance Ministry approves EGP 3bn in credit guarantees for banks to cover 5% interest financing granted to maintain tourism employment
The Ministry of Finance has approved EGP 3bn credit guarantee for the Central Bank of Egypt (CBE) to cover financing granted to the tourism sector. The CBE, in turn, allocated EGP 3bn from its EGP 50bn tourism support initiative towards paying salaries of tourism employees and maintenance works, while the rest of the finance will go to renovation works. The initiative also includes providing soft loans to tourism companies at decreasing interest rate of 5% for maintenance and operation expenses. The move comes in light of President Abdel Fattah Al-Sisi's directives to support the sectors most affected by the coronavirus (COVID-19) pandemic, particularly the tourism sector. This initiative to provide support to Egypt's long-suffering tourism sector was issued in cooperation with the Ministry of Finance. The guarantee will be used to issue a pledge of EGP 3bn in favour of the Credit Risk Guarantee Company. It will cover 100% of the risks associated with financing tourism sector companies, and it is anticipated that it will motivate banks to finance those companies under the current circumstances. Egypt attaches particular interest to the tourism sector, as one of the country's most important sources of income. Tourism worldwide has taken a particular hit in the current pandemic situation, as many countries have put in place either severe restrictions or total bans on international travel. Since 2011, Egypt's tourism sector has undergone repeated knocks, with the CBE issuing many initiatives, both to support the sector's companies and workers. Both regular and irregular customers will be allowed to benefit from the initiative, including companies that manage residence hotels, floating hotels and tourism projects. Companies managing travel agent services, reservations, tourist trips, land tourist transport, restaurants and leisure activities in tourist areas also fall under the initiative. The CBE has obliged banks to ensure tourism companies who obtain this funding do not reduce staff or wages on the back of the ongoing coronavirus pandemic.
