Egypt’s Financial Regulatory Authority (FRA) is calling for a major shift towards responsible pricing in the MSME financing sector, engaging directly with lenders to build a more sustainable and trusted market. The push comes as the sector’s financing portfolio grew to approximately EGP 97.4 billion in February, a significant increase from the previous year.
Quick Facts
- MSME financing balance hit EGP 97.4 billion.
- Up from EGP 83.3 billion year-over-year.
- Sector reached 3.6 million beneficiaries in 2025.
Balancing Growth with Client Protection
In a meeting with representatives from financing companies, FRA Chairperson Islam Azzam emphasized the need for pricing frameworks that align with current market conditions. He stressed that the goal is to strike a critical balance between ensuring the sustainability of lending businesses and protecting the interests of their clients.
According to Azzam, this approach is essential for strengthening confidence across the board and paving the way for further expansion in the vital MSME sector. The discussion is part of the FRA’s wider strategy to foster growth in non-banking financial activities while maintaining high standards of credit quality.
Digital Transformation and Upskilling on the Agenda
The dialogue also tackled the operational challenges facing lenders, with a clear focus on digital solutions as a key enabler for financial inclusion. Azzam highlighted technology’s role in widening the reach of financial services to a larger base of beneficiaries.
Beyond technology, human capital was identified as a core pillar for progress. Azzam pushed for greater industry cooperation in training and capacity building. He specifically recommended establishing a cooperation protocol between the FRA’s Financial Services Institute and the Egyptian Federation for MSME Finance to address the sector’s workforce training needs.
Phased Rollout of Basel III Standards
The meeting addressed the phased implementation of Basel III standards, a set of international banking regulations. The FRA is advocating for a gradual adoption process to give institutions adequate time to strengthen their risk management frameworks and ensure operational readiness.
Proposals from company representatives will be reviewed within existing legal frameworks, as the FRA aims to create regulatory policies that support development while ensuring market stability. Azzam concluded by reaffirming the authority’s commitment to direct dialogue as a tool for identifying real-world challenges and crafting effective, balanced regulations.
About the Financial Regulatory Authority (FRA)
The Financial Regulatory Authority (FRA) is the primary government body responsible for supervising and regulating non-banking financial markets and instruments in Egypt. Its mandate includes capital markets, insurance services, mortgage finance, financial leasing, factoring, and microfinance, with the aim of ensuring market stability and protecting stakeholder rights.
Source: Zawya
