The Central Bank of Egypt (CBE) on Wednesday launched an initiative to settle the debts of companies with unpaid sums of less than EGP 10m, and the debts of individual customers, not including credit card balances, through the end of December 2017, whether legal action has been taken against them or not, for banks participating in the initiative.
According to a CBE statement, the launching of the initiative comes within the framework of the CBE and banks’ role in supporting economic development, and in order to solve the problems of nonperforming debts and reduce the burden on small-scale customers who are serious about repayment, and returning them to economic activity.
The initiative is expected to benefit more than 3,500 companies and 337,000 individuals with the National Bank of Egypt (NBE), Banque Misr, Banque du Caire, Export Development Bank of Egypt, Egyptian Arab Land Bank (EALB), Agricultural Bank of Egypt (ABE), United Bank of Egypt (UBE), and Industrial Development and Workers Bank of Egypt (IDWBE).
According to the initiative, these banks will exempt the defaulting customers from all accrued and unpaid interest, amounting to EGP 16.8bn, if they are committed to paying 100% of the outstanding debt balance through the end of December 2017 by the end of December 2018.
The banks and clients will be exempt from all ongoing legal cases and those eligible for dismissal will be discharged in accordance with the law. All guarantees provided by the customers for their loans will also be released.
The borrowers will also be removed from CBE lists, as well as those of the Egyptian Credit Bureau (I- Score). Furthermore, prohibition on dealing with them will not apply to these debts and they will be recognised as initiative clients for three years from the date of payment.
The total unpaid interest of the initiative’s customers amounts to EGP 16.8bn, of which EGP 12bn is for companies with balances of less than EGP 10m and EGP 4.8bn for individual customers.
The initiative comes in an attempt by the CBE and banks to find solutions that will support small-scale clients and help them recover from their stumbling as part of the banking sector’s role in the economic reform programme.
The CBE called on clients to address the banks’ handling and speed of use of the initiative to eliminate the largest number of nonperforming and outstanding cases in the courts and return them to economic activity.
