The Central Bank of Egypt (CBE) launched an initiative to subsidise the renovation of hotels, floating hotels, and tourism fleets. Through the initiative, banks will secure EGP 5bn with an interest rate of 10%, extending over a maximum period of 10 years, according to the credit study conducted on each client separately.
In a press release issued on Tuesday, the CBE x that launching this initiative comes as part of its interest towards the tourism sector since 2013. The bank added that several initiatives were posed as a result of recent negotiations and discussions held with tourism investors to understand their needs and the finances required to support the tourism sector.
According to the CBE, the initiative directives stipulated that the main purpose of financing must be for renovation and renewal of hotels, floating hotels, and tourism fleets. Clients seeking funding must also be proven to be committed in repaying their loans.
It stated that local components must also be used in 75% of the renewal process.
The CBE noted that renovation and renewal must abide by the new standards and specifications of the Ministry of Tourism.
Under this initiative, banks will finance 75% of the total cost of renovation and renewal, while clients will bear the remaining 25%.
Egyptian tourism was at an all-time low in 2015 as several countries posed travel bans on Egypt, following the fall of a Russian airliner in Sinai and the accidental killing of Mexican tourists by security forces in the western desert.
As a result, tourism revenue fell in 2016 by 44.3% reaching $3.4bn, according to the CBE Governor Tarek Amer in a meeting with the parliament’s Economic Affairs Committee last month.
The decreased tourism revenue was one of the reasons that contributed to the shortage in hard cash, hence the depreciation of the national currency against the US dollar.