CAIRO — The governor of the Central Bank of Egypt, Tarek Amer, announced May 10 an initiative to help troubled factories, in cooperation with Egyptian banks, by keeping more than 5,000 faltering factories afloat and lowering the interest of their debts. The initiative received broad acclaim among economic circles, but it has, at the same time, raised questions about its ability to save those factories.

Al-Monitor attended the event organized by Al-Ahram Foundation during which Amer explained that the initiative will include large exemptions for more than 5,000 factories with bank debts and write off the delay penalties and loan interest.

He said that he had presented the initiative to President Abdel Fattah al-Sisi, who approved it. Amer noted that it also includes exempting individuals in debt with banks by delaying penalties and writing off loan interest, as well as dropping 67,000 court cases against borrowers, including investors and farmers.

The Egyptian government created a financial fund in May 2017 called Egypt Risk Capital to help the faltering factories, but it was unsuccessful given the accumulated debt of these factories with the Egyptian banks. However, observers believe the new initiative could be more effective, especially since it writes off the debts owed by those troubled factories, which may allow them to operate again after they had suspended their work due to the political and economic tensions that followed the January 25 Revolution.