The Agricultural Bank of Egypt (ABE) has announced an initiative to settle EGP 6.3bn in bad debt belonging to about 328,000 defaulting clients with the bank.
The initiative allows for a complete settlement of the bank’s non-performing loan portfolio, which amounts to about EGP 6.3bn. It includes a total principal debt of about EGP 3.9bn, and a total accumulated returns of about EGP 2.4bn, owed by the farmers.
It focuses on hundreds of thousands of small farmers, and comes as part of the support for Egypt’s agricultural sector.
The initiative aims to enable faltering agricultural sector clients to deal again with the banking sector, and ensure their return to work and production. It will do so in a way that contributes to providing greater opportunities for earning, and creating job opportunities.
The final execution of the entire debt for clients whose original debts are EGP 25,000 or less will be carried out, along with all accumulated returns after defaulting. In addition to this, the clients will be removed from the blacklists at the Central Bank of Egypt (CBE) and the Egyptian Company for Credit Inquiry I-Score.
Clients will also be able to benefit from a waiver of all cases between the bank and the customer, should there be any present. The total beneficiaries included in this segment of the initiative stands at about 307,000 clients, most of whom are small farmers.
The total principal of the debts that will be dropped from these clients is about EGP 415m, in addition to the proceeds which amount to about EGP 226m.
Under the initiative, 50% of the debts will also be dropped for defaulting clients whose debts amount to between EGP 25,000 and EGP 10m, both for individuals and companies. This will take place provided that the customer pays 50% of the original debt, whilst dropping all returns and waiving all cases.
The total finances of beneficiaries included in this segment of customers account for about EGP 21,000, with a total principal debt of about EGP 3.5bn, in addition to the returns that amount to about EGP 2.2bn.
