Under the programme, employees will be able to borrow up to 25% of their salaries as of Jan 1
Egypt will let 6 million state
employees borrow against their salaries in a move designed to
stimulate the economy, Al Akhbar newspaper reported on
Wednesday, citing an unnamed Ministry of Finance official.
Under the programme, employees will be able to borrow up to
25 percent of their salaries as of January 1 in loans that must be
repaid within seven years.
"The programme is a tool used by the ministry to limit the
relative slowdown that has hit the markets in general. It will
have a direct effect on inflation," the newspaper quoted the
official as saying.
"It is one of a series of stimulus measures aimed at
boosting economic activity linked to consumption and the retail
After three years of around 7 percent growth, Egypt's
economy slowed when the global financial crisis hit to 4.7
percent in the 2008-2009 fiscal year, before quickening to 5.1
percent in 2009-2010.
The government believes it needs a minimum of 6 percent
growth to absorb new entrants to the labour force.
The Finance Ministry has contracted with National Bank of
Egypt, Banque du Caire and Alexbank, which
is controlled by the Italian bank Intesa Sanpaolo,
to provide the finance using the employees' salaries as
security, Al Akhbar said.
Finance Minister Youssef Boutros Ghali said on Monday he
expected the economy to grow by 7 percent in the financial year
beginning in July 2011 and by 8 to 8.5 percent the year after.