Egypt's central bank raises maximum of financing in initiative to replace, renovate hotels

CAIRO – 19 May 2021: The Board of Directors of the Central Bank of Egypt decided to amend some provisions of the initiative to finance the replacement and renewal of accommodation hotels, floating hotels and tourist transport fleets with a decreasing rate of 8 percent.

CBE clarified in its periodic book issued Wednesday, that the bank is scheduled to finance a maximum of 90 percent instead of 75 percent of the total cost of replacement and renewal, provided that the customer bears the remaining percentage, with the payment of the customer’s share in a proportion proportional to the bank’s share, based on the bank’s study of the customer’s future cash flows.

According to the Central Bank, the credit risk guarantee company guarantees 70 percent instead of 60 percent of the credit risk for the facilities granted, provided that banks bear 30 percent instead of 40 percent before asking the company to disburse the guarantee.

It indicated that this comes in light of the continuous follow-up of the performance of these initiatives and with the aim of continuing to support the tourism sector and its workers in light of the continuing effects of the coronavirus crisis.

The CBE noted that due to the expectation of an increase in tourism activity in the coming period, this necessitated the necessity for hotels and tourism companies to carry out maintenance and operation works for all their facilities and their transport fleets in preparation for receiving the expected tourist groups.

Last February, the Board of Directors of the Central Bank of Egypt decided to amend the initiative to finance tourism companies with the guarantee of the Ministry of Finance, which includes allocating LE 3 billion from the value of the amount allocated to the initiative to finance tourism companies amounting to LE 50 billion.