CBE gives banks additional year to raise contribution of MSMEs loans to 25%

The Central Bank of Egypt (CBE) announced in a statement today the extension of applying the decision to oblige banks to increase the portfolio of direct and indirect loans and credit facilities for MSMEs from 20% to 25%.

The statement reads as follows: "Referring to the circular dated February 22, 2021, according to which banks are obliged to increase the portfolio of direct and indirect loans and credit facilities for corporates and MSMEs from 20% to 25% of credit facilities portfolio" according to the Bank’s statement of financial position in December 2020 ", with a commitment to direct 10% of them to finance Corporates and small enterprises.

Also with reference to the circular dated 15 December 2022 on the extension of applying these mandatory ratios until 31 December 2023.

At its meeting held on 16 January 2024, the Board of Directors of the Central Bank of Egypt approved the application of the first item of instructions issued by the circular dated 22 February 2021 (which has already been extended for a year ending December 31, 2023) on the obligation of banks to achieve 25% of the bank's credit facility portfolio "according to the Bank’s statement of financial position on December 31, 2020" to finance corporates and MSMEs, and to direct 10% of them to finance corporates and small enterprises for an additional year ending December 31, 2024.

The statement added that banks are free to meet all guarantees that are appropriate with the credit facilities granted in the light of the credit studies prepared for customers, as well as to obtain checks if necessary. CBE also agreed that the rest of the instructions would continue to be applied, unless stipulated.