The Agricultural Bank of Egypt (ABE) has been supporting the state’s efforts to develop Upper Egypt in the recent period through promoting and creating investment opportunities in the agricultural sector, and supporting small farmers and producers. This is in line with the directives of President Abdel Fattah Al-Sisi to improve the quality of life of people in Upper Egypt, in cooperation with the Central Bank of Egypt (CBE).
In a statement last week, ABE Chairperson Alaa Farouk said the bank always worked on opening new horizons for investment in Upper Egypt through expanding agricultural loans of all kinds. The bank also financed national initiatives and projects that aim to support agricultural and livestock production. They included modern irrigation, veal production, milk collection centres, and micro enterprises. The bank also played a developmental role in rural areas through joining the presidential initiative “Decent Life” and other similar initiatives.
Farouk revealed that the bank’s loan portfolio increased to about EGP 14.2bn in November 2021, with an annual growth of about 50%. Upper Egypt accounted for about 26% of the bank’s credit portfolio during 2021. The total loans allocated to support agricultural production in Upper Egypt amounted to EGP 2.863bn in 2021, of which EGP 1.6bn was directed to support the cultivation of sugarcane.
In the framework of contract farming, the bank had tripartite contracts with all sugar cane factories and farmers in Upper Egypt. In addition, the ABE doubled its credit facilities for agricultural production, in order to help small farmers cope with the rise in agricultural costs and production requirements.
According to Farouk, the total loans directed to finance the national project to revive veal production in Upper Egypt amounted to about EGP 1.2bn, to raise 81,862 head of cattle, benefiting about 7,800 clients.
Farouk stressed that the bank contributed massively in the “Decent Life” initiative for the development of villages, with a focus on Upper Egypt. The initiative includes granting financing for agricultural activities to increase farmers’ income, generate jobs, and achieve financial inclusion.
He added that the bank launched a financial awareness campaign in all the villages targeted by the initiative, in line with the CBE Governor’s directives to maximise the role of the banking sector in terms of supporting the national economy and improving citizens’ standard of living by providing banking services that suit everyone. The awareness campaign started in Assiut and Qena.
Farouk stressed that the ABE had the largest branch network in Egypt, with about 1,200 branches nationwide, including 451 branches in Upper Egypt alone. The bank started developing 282 branches in Upper Egypt, at a cost of EGP 1.4bn, in addition to other 58 branches that were recently developed, at a cost of EGP 290m.
Moreover, the bank has been working on a plan to have the largest number of ATMs in villages. It has already installed 1,000 ATMs over the past three months, with the support of the CBE, including 491 ATMs in Upper Egypt, at a cost of EGP 242m.
Farouk said that the bank attached importance to financing small and micro enterprises, as they were the focus of economic development and contributed to providing direct and indirect jobs. The total funds provided by the bank, through the microfinance programme “Bab Rizk” in Upper Egypt, amounted to about EGP 34m, benefiting 3,800 people. Women accounted for 55% of the total beneficiaries of the programme.
He added that the bank financed the replacement of 606 obsolete pick-up trucks with a total financing of about EGP 110.098m, until the end of last September, in the governorates of Aswan, Qena, and Sohag. The measure aims to develop mass transportation and provide safe transportation services for citizens.
The bank’s leaders conducted many inspection tours in Upper Egypt, and met with governors, representatives, and executive leaders in these governorates, which resulted in signing many cooperation protocols. The bank also organized public meetings in the governorates of Qena, Assiut, Minya, and Fayoum to support low-income families and achieve financial inclusion in the Egyptian countryside.
Farouk also revealed that the bank restructured livestock loans that were offered with high interest rates during previous years. The bank will reduce the interest rate on them to help borrowers repay them and protect them from defaulting, provided that they pay 15% of the loan value, and the rest will be rescheduled over up to seven years.
He explained that customers subject to the restructuring conditions will be able to benefit from the initiatives of the CBE by obtaining loans with interest rates ranging between 5% and 8%, to encourage them to continue production and support their existing projects, as long as they prove their seriousness in investing and using the loans for the designated purposes.
A new initiative was launched by the ABE recently to settle its debt disputes with customers, in implementation of the directives of Tarek Amer, the Governor of CBE, to mitigate the negative effects of the COVID-19 pandemic on small and micro enterprises and enable them to be part of the banking system again.
Farouk explained that the new initiative provided a complete settlement of about EGP 4bn of debts in the bank, benefiting more than 45,000 customers. He pointed out that under this initiative, the entire debts of retail banking customers whose debts reached EGP 100,000 on 30 November 2021 will be eliminated with a total of EGP 400m, benefiting about 7,500 customers.
The initiative also includes eliminating the debts defaulting customers amounting to EGP 25,000, benefiting 13,000 customers, most of whom are small farmers, with a total debt of about EGP 76m. Additionally, the debts of 1,000 deceased defaulting customers, whose loans were not repaid until November 30, worth EGP 64m will also be eliminated.
Under the initiative, 50% of the debts of retail and corporate defaulting customers will also be eliminated, worth EGP 10m, provided that they pay off 50% of the original debt, whether in one batch or in instalments. More than 24,000 clients benefit from this aspect of the initiative. Their total debts amounted to EGP 3.4bn.
Farouk said the bank started reviewing and updating all credit categories for agricultural activities for the third time within a year, to cope with market changes and help farmers face the high costs of agricultural and production requirements, in coordination with the Ministry of Agriculture.
He added that the bank is currently working to restructure the Egyptian Company for Agricultural and Rural Development (ECARD), to enhance its capabilities in providing all production requirements in general, in addition to other services.
Farouk stressed that the bank is fully prepared to enter into partnerships with serious investors, whether by providing land or capital and financing. It will ensure that their projects are successful, provided these investors are serious and able to successfully manage their projects.
He noted that the bank supported agricultural and livestock industrial projects, which represent a value-added and provides direct and indirect jobs for rural workers. He stressed that all the bank officials’ tours outside Cairo and new development areas aimed to encourage investment in the agricultural sector and urge serious investors to set up new projects.