Egypt’s business community is keeping its fingers crossed that a recently launched funding initiative will prove to be a life raft for the country’s industrial sector. To help bolster industry, Prime Minister Mostafa Madbouly on Dec. 4 announced a program to make available 100 billion Egyptian pounds (around $6.2 billion) at a reducing balance rate of 10% to assist struggling businesses with their debt. While local industrialists welcomed the move, economists are urging authorities to proceed carefully.
“In principle, the initiative is a good move toward encouraging industrialists,” Amr Abol-Enein, managing director of CI Capital Asset Management, told Al-Monitor. “It will finance working capital for the defaulting factories, but each case of default should be well examined by the banks prior to being offered a lifeline. We should differentiate between firms that stopped loan repayment due to the country’s overall economic conditions and factories that are in default because of mismanagement.”