During the last few years the Egyptian economy has witnessed a noticeable increase in the level of non-performing debts in the private business sector. As a result, there was concern about the efficiency of the banking sector and its role in financing the development process as well as the ability of these companies to continue in business. Concern was also raised about the possibility of the problem spreading to other companies, which could lead to a significant slowdown in the level of economic activity in general.
This Policy Viewpoint analyses the phenomenon of irregular debts owed by the private companies to the banking sector, discusses the size and nature of the problem, explores its main causes, and offers proposals to settle this issue in light of international experience.
Author(s): Samiha Fawzy and Omneia Helmy