Atourist sunbathing on a beach in Egypt’s Red Sea resort of Sharm el-Sheikh.
(AFP PHOTO / KHALED DESOUKI)
By Abdel Razek Al-Shuwekhi
The National Bank of Egypt's total non-performing loans amount to EGP 6bn, according to Yehya Abou El-Fotouh, head of the Non-Performing Loans Division at the bank. He said that the tourism and industrial sectors represent 75% of the total debt, while other sectors, led by transportation and oil, account for the remaining 25%.
Abou El-Fotouh said the tourism sector accounts for 40% of the total debt versus 35% for industrials, adding that, despite the debts, the bank did not stop supporting various economic sectors.
He said: "We have provided loans for hotels in operation ranging between EGP 3-5m in order to meet the burden of paying wages and suppliers' dues."
According to the Ministry of Tourism, tourism income dropped to $1.3 bn during the first quarter of the current fiscal year, a decrease of 43% compared to the same period in 2013.
The Central Bank of Egypt has launched several initiatives to postpone the tourism sector's dues to the bank, the most recent of which began at the start of the year and will be postponed through its end.
He said that loans arranged by the bank during the first half of the current fiscal year amounted to EGP 3.5bn for 60 companies.
Aboul Fotouh feels that supporting industrial and tourist activities in the near future will positively influence economic growth, especially following presidential elections at the end of this May.
Ali Rada, President of the Red Sea Tourism Investment Association, said that the National Bank of Egypt has agreed to a debt schedule with 35 companies for the first quarter of this year, and schedules for 15 other companies are expected to be made at the end of the second quarter.
Rada called for other banks to follow the National Bank of Egypt's lead in dealing with stalled debt repayment in light of the crises experienced over the course of the past three years.