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Egypt issues first microfinance law

First law of its kind empowers Egypt's financial watchdog to regulate micro-credit by non-banking institutions

Ahram Online , Thursday 13 Nov 2014
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Views: 3568

Egypt issued its first law regulating micro-finance services, the Egyptian Financial Supervisory Authority (EFSA) announced on Thursday.

The law regulates microcredit provided by non-bank micro-financiers, such as companies and non-governmental organisations, placing them under the authority of the EFSA, while banks will continue to answer to the Central Bank of Egypt.

The law will attract investors and financiers interested in microfinance, be they companies or NGOs, said EFSA head Sherif Samy, by establishing a credible supervisory system and outlining clear rules to manage risk and protect participants, and by laying out the requirements for financial solvency and disclosure requirements for licensing.

Egypt's cabinet approved the bill in May, which was signed into law this week by President Abdel-Fattah El-Sisi after passing a review by the State Council.

Microcredit programmes were first introduced in Egypt in the 1980s by the National Bank for Development and Alexandria Businessmen Association along with the technical and financial support of USAID.

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