The Central Bank of Egypt (CBE) Deputy Governor Tarek el Khouly on Tuesday warned the banks that fail to commit to the government’s initiative to finance small- and medium-sized enterprises would be subject to some form of punishment. 

Addressing the second Leasing Conference held in Cairo on October 11, el Khouly gave no details on the punishment that might be imposed on blameworthy banks. The new programme is a national duty for banks and should be respected, he asserted. 

Under the initiative, banks in Egypt shall inject EGP 200 billion into supporting businesses over the next four years at 5% simple diminishing return. 

El Khouly gave banks some examples to finance SMEs. The CBE may back bank’s Capital Adequacy Ratio (CAR) or open new branches to meet this target, he suggested. 

The SMEs sector is a key player in refreshing Egypt’s economy, he said, adding that the CBE managed to provide definition for the small and macro-sized companies and offered loans at interest rates not exceeding 5 percent. 

As part of a plan to boost financial inclusion or the inclusive financing policy, the CBE created new banking services to meet the client’s inspirations, el Khouly added