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EGP 49bn increase in loans for SMEs in 1 year: CBE deputy governor - Daily News Egypt

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EGP 49bn increase in loans for SMEs in 1 year: CBE deputy governor

CBE met NBG officials to identify bank strategy, no formal request yet to exit Egypt


Banks operating in the domestic market injected EGP 49bn of new loans for small and medium enterprises (SMEs) within one year as part of the Central Bank of Egypt (CBE)’s initiative to finance and support these projects, according to Gamal Negm, deputy governor of the CBE.

In January 2016, the CBE launched an initiative to finance SMEs, to monitor EGP 200bn to be injected over four years.

In response to a question by Daily News Egypt, Negm expected banks to add EGP 200bn by the end of the period set by the CBE, January 2020.

He added that the implementation of this initiative encountered some difficulties at the beginning, as it needed to prepare special infrastructure to deal with these projects, which the banks have already implemented, and are therefore expected to launch the implementation of the initiative in the coming period.

Banks also began expanding microfinance projects, after adding them to the initiative, funding them through financing companies and associations involved in microfinance, Negm said.

In response to a question about the amount of funding banks have offered to microenterprises, Negm said the amount of funding by the CBE has not been defined so far.

In another context, Negm said that banks had invested about EGP 10bn to finance limited and middle-income housing as part of the CBE’s initiative, noting that another EGP10bn were allocated by the CBE to complete the initiative, which banks are expected to start injecting in succession.

“The total dollar inflows received by banks operating in the domestic market amounted to about $59bn since the liberalisation of the exchange rate on 3 November 2016 to date, and banks are currently initiating documentary letters of credit for the import of essential and non-esssential commodities,” according to Negm

On the recent concerns about Egypt’s inability to pay outstanding loan installments in the coming period, Negm said Egypt has never been late in repaying its foreign liabilities, whether loans or interest.
On another occasion, the star Negm confirmed the intention of the National Bank of Greece (NBG) to leave Egypt, but also stressed that the CBE has not yet received a formal request in this regard.

He explained that the CBE recently met officials from the NBG, where they explained their strategy in the coming period, and that there is athe tendencyod, which includes on the part of the bank heading towardsto get out of  exiting all the foreign markets in which it is located, and focusing on Greece only.

He pointed out that the NBG is only a branch of a foreign bank. It does not have a license such assimilar to banks that takeoperating in the form of joint stock companies., Sso if it leavesft Egypt, the bankhe wouldill sell itshis portfolio to those who wish to buy itit.

“Egyptian banks are strong, their financial safety indicators are excellent, and there is no international standard for banks’ financial safety that is not applied to banks in Egypt on time., Bbut the CBE is more conservative within financial safety standards than international standards.”,

In response to a question by Daily News Egypt, Negm stressed that the CBE will not demand banks operating in the Egyptian market to inject new increases in their capital, stressing that banks will be take independent stepsmoving  themselves

Tto support and increase its capital base if it they wishwants to increase theirits activity and expand the volume of theirits business volume in the market.

Regarding the draft of the new law on banks draft law, Negm said that the law is currently being reviewed carefully, stressing that no date has been set for its completion so far, as the CBE is keen not to iissue the lawit until it comes out properly.

As for banks that need to be restructured, such as the  Egyptian Arab Land Bank, the Agricultural Bank of Egypt, and the Industrial and Labour Bank of Egypt, Negm said the CBE is in constant contact with the banks’ administrations on a daily basis.

On Regarding the desire of some Egyptian banks to operatebe present in foreign markets, Negm said that whenever aany bank submits a requestapplies to the CBE for its  to operatepresence  abroad whileand fulfillinghas the required elements forof this matter, the CBEk provides its approval immediately.

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