(3 minutes read)
Egypt’s inflation and high-interest rates have led to a decline in the expansion of investment companies. The cost of financing economic activities has increased, and the economic feasibility of many projects has decreased. As a result, investors are resorting to loans with a fixed return that are free of risks.
Egypt’s inflation and high-interest rates have led to a decline in the expansion of investment companies. The cost of financing economic activities has increased, and the economic feasibility of many projects has decreased. As a result, investors are resorting to loans with a fixed return that are free of risks.
To curb inflation, which hit record levels, reaching about 40.3% last May, the Central Bank of Egypt raised the interest rate by 10% during the last 15 months, including 8% last year and 2% in March.
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During the first quarter of this year, the number of financial leasing contracts in Egypt decreased by nearly 50% to reach 507 contracts, compared to 994 contracts during the first quarter of 2022. However, the value of financial leasing contracts increased during the same period to reach about EGP 28.1bn, compared to EGP 21.8bn during the comparative period. Looking at March alone, the Financial Regulatory Authority (FRA) report indicated that the total value of contracts declined to EGP 7.02bn, compared to EGP 10.4bn in March 2022, a decrease of 32.6%.
