The Commodity Import Program (CIP) provides financing to Egyptian entities to import U.S. equipment and materials. The program is implemented by 31 local banks in accordance with guidance provided by the Ministry of International Cooperation (MIC).
The CIP was initiated in 1975 in conjunction with the start of USAID economic assistance to Egypt. Initially, the CIP financed public sector purchases of American-made products to meet critical needs of the Government of Egypt.
The Public Sector CIP was instrumental in helping Egypt reduce its sizeable balance of payments deficits and to ameliorate its negative foreign exchange position. When USAID/Egypt's country strategy focused greater attention on the promotion of private participation in the economy, the CIP was expanded to support private sector enterprises.
Since 1992, the CIP has been dedicated exclusively for financing U.S. imports by the Egyptian private sector. The $200 million annual program stimulates private investment by providing attractive financing to Egyptian private firms in all sectors of the economy.
All individual Egyptian entrepreneurs and private sector firms, either traders (importing for resale) or end-users (importing for their own use) are eligible to apply for CIP financing through any of the participating banks. The minimum transaction size for capital and non-capital imports is $10,000.
The low minimum value of transactions encourages small and emerging private sector businesses to participate and take advantage of the financing provided under the program.
The maximum annual limit for any one importer is as follows:
- Trader: $5 million (N.B.: Importer who is importing goods for leasing purposes is considered a trader).
- End-user importing non-capital goods: $4 million.
- End-user importing capital goods: $8 million.
Companies established in a free trade zone or which have government ownership exceeding 20% are excluded from the program.
The CIP provides U.S. dollars and short to medium credit terms with an interest-free grace period – varying from 6 to 36 months, and repayment periods that range from 6 months to 8 years according to the type of commodity (capital or non-capital), and whether the importer is a trader or an end-user. The interest rate that will be payable after the grace period will be the prevailing rate at the time the letter of credit is issued. All repayments by the Egyptian importer will be in Egyptian pounds for the duration of the repayment period.
