Egypt’s Financial Regulatory Authority (FRA) has issued its first comprehensive guide to consumer finance rules, bringing decisions, instructions and circulars into a single reference for companies operating in the sector.
The guide covers licensing, governance, customer protection, credit assessment, capital adequacy, cybersecurity and financial reporting. It is based on Consumer Finance Activity Regulation Law No. 18 of 2020, along with subsequent FRA board decisions and circulars.
For consumer finance companies, the reference sets out requirements covering establishment, shareholder structures, board composition, internal controls, financing contracts, solvency and branch registration. It also requires companies to provide customers with clear information on repayment schedules, costs, benefits and risks.
The rules prohibit companies from taking blank signed documents or trust receipts as financing security. They also require creditworthiness assessments, reviews of existing financing and monitoring of customers who fall behind on repayments.
The framework incorporates Basel III standards on capital adequacy, leverage and liquidity, and includes provisions on stress testing, concentration risk and risk reporting. Licensed companies must also maintain appropriate technology infrastructure, conduct periodic penetration tests and meet IT governance and cybersecurity requirements.
The FRA is also establishing a register for debt collection companies operating across non-banking finance activities. Recent rules additionally require consumer finance companies to provide insurance coverage against death and permanent total disability for financed customers up to age 65, equal to their outstanding balance.
Source: Waya
