Egypt is to set up special committees in each one of the country's banks to monitor the financial situation of local businessmen who are running into financial problems and help them pay back their debts.
Newspapers have reported a number of Egyptian businessmen fleeing the country in recent months after being unable to pay their debts to local banks. Despite the new government decision, bankers say they are determined to pursue legal action against businessmen who have fail to service their loans.
Dr Mahmoud Suleiman, a leading Egyptian businessman, told the weekly Al Alam Al Youm that the committees were badly needed to tackle the economic crisis. "The government must make good on its promise to help reschedule the debts of businessmen on the verge of bankruptcy," he added.
The committees will study each case on merit to determine who is eligible for government assistance. Officials say the committees will also investigate the financial policies of firms to trace why they slide into difficulties.
Dr Suleiman and other business leaders reject government allegations that in recent years they have become entirely dependent on bank loans for major projects. "Investors all over the world take loans from banks and that's fine, as long as the money is paid back within the agreed period of time," he argued. "There is no reason to make businessmen feel ashamed of taking loans from banks."
Saleh Ghaith, another prominent investor from Cairo, blames the government for the bankruptcy of many businessmen. He said the government had recently enacted a series of new laws that hurt real estate investment, and he urged bank owners to demonstrate more patience and understanding.
Economic experts in Cairo say the flight of Egyptian businessmen has adversely affected investment in the country.
"Foreign investors will ask themselves 'why should we invest in a country when its own businessmen are fleeing,'" said Sharif Al Biltaji, the owner of several construction companies. "It doesn't mean of course that Egyptian businessmen are thieves. The vast majority are decent and hard-working businessmen who deserve the government's help." –(Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com )