Gov’t extends agriculture and industry support initiative: The finance and industry ministries have approved a new EGP 90 bn program of subsidized loans for industrial, agricultural, and renewable energy players for the current fiscal year, according to a statement.

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The details: The program will offer financing at an interest rate not exceeding 15% for industrial, agricultural, and renewable energy activities. Some EGP 80 bn will be allocated to working capital financing, while EGP 10 bn will be earmarked for purchasing machinery and equipment.

This year’s package is smaller than last year’s EGP 120 bn initiative, which carried the same 15% interest rate — well below the central bank’s current 22% lending rate. However, it remains 4 percentage points higher than the 11% rate applied under the 2023 program.

The price tag: The interest rate differential under this round of the initiative will cost the state treasury around EGP 8 bn this fiscal year.

How it works: Local banks will disburse the loans to those eligible and in return receive the difference between the 15% rate and the corridor rate from the Finance Ministry.

REMEMBER- The CBE had halted its low-interest financing programs for industrial, agricultural, and contracting companies in 2022, transferring their management to the relevant ministries in line with IMF requirements.

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