355 billion in unpaid debts; program for settling loans of faltering clients

Egypt's government of Prime Minister Atef Ebeid has decided to implement its initiative for settling debts of faltering clients on two stages.

ÊÊÊ The first starts with having negotiations with fifty clients getting loans not less than L.E. 250 million for settling their status and the second stage covers clients getting loans less than L.E. 250 million.

ÊÊÊ During the past two days, creditor banks made contacts with targeted clients and discussed with them the methods which would enable them settling their debts.

ÊÊÊ Reports submitted to this effect to the Prime Minister showed that the volume of credit extended to all clients amounted to L.E. 355 billion until the end of last April, reports also indicated that among credits given to 200,000 customers, there were loans, suspected to be repaid, to the value of L.E. 12 billion, a ratio of 3.4 percent.

ÊÊÊ Reports say that each bank withholds 2 per cent of its annual profits for covering faltering loan risks.

ÊÊÊ Government sources told Al-Ahram that aggregate profits withheld by banks annually fully covers doubted loans adding all funds of depositors are fully secure.

ÊÊÊ The sources said the number of clients who managed to flee abroad is only eight adding some of them took the initiative to contact administrative bodies expressing their readiness to settle their debts either directly through them or their agents.

ÊÊÊ Well-informed sources said priority is given by the government for floating faltering clients without abandoning any part of borrowed funds or their debts so that those clients may not be dealt with like others who are sincere in settling their debts.

ÊÊÊ The sources said floating process could necessitate extending new loans to those faltering clients on condition that their fixed assets would be mortgaged by banks. Each bank would consider the cases of customers separately.

ÊÊÊ The sources said faltering customers, who do not respond to the government call and who do not apply to banks for settling their cases will give banks the freedom to lodge a lawsuit against them after getting an approval by the Prime Minister and the governor of the Central Bank.

ÊÊÊ The sources said banks will not stop offering credits according to banking norms and control criteria given by the central bank.