Assiut workers being cast into the street
Mohammed Salah - Cairo
Many investments have collapsed in Egypt since the January 25 Revolution as Egyptian banks anxiously refrained from throwing themselves into the market. As more factories become insolvent, thousands of workers and their families are threatened. This requires a stand by public, government-owned banks to support these factories past crisis point.
These banks, however, follow harsh credit and risk-management policies, especially when dealing with small investors and small- and medium-sized manufacturing enterprises. Rarely do we see a bank risking funding these factories which keep thousands of families afloat who would otherwise face the threat of penury.
Ali Hamza, President of the Board of Assiut Investors’ Association has sent a call for help to the Ministry of Industry and Commerce about the insolvency of 800 factories amid fears for 5000 Assiut workers being cast into the street.
Speaking exclusively to Masr el-Youm, Hamza put potential losses from threatened factories at 3 billion pound. He added that 30 per cent of these factories are out of business due to banks refusing to provide the necessary financial fluidity and demanding unreasonable guarantees. The situation is made especially bad, he said, because of the lack of the necessary economic environment that allows the marketing of products.
Hamza also pointed out that the problem with industrial zones in Assiut is the lack of logistical services, such as waterlines, sanitation and roads. This, he said, increases the cost of production, making them harder to sell.
Hamza expressed anger at the lack of response from the authorities to which he forwarded his call for help.