Name
Global FinTech Guide
Country _ Name
Egypt
SectionTitle
Loan services / factoring / loan broking / finetrading
Body
FinTechs belonging to this category act as a loan creditor (even short and very short-term loans), are broking loans or receivables or conduct factoring of loans, which were given to private or business customers. In this business area you also find “peer-to-peer” (P2P) services, in which FinTechs enable a multitude of users to give loans (and brokered by the FinTech-platform) to other users or companies.

Finetrading is hereby a financial service of FinTechs, where they buy due receivables and grant the debtor an extension of payment time. 

As an ancillary service some FinTechs offer alternative credit assessment services to check the solvency of a borrower.

Introduction

Attitude of the country towards loan-giving-, factoring-, brokerage-, finetrading- and ancillary services

Egypt is industriously striving towards a better financial future. During the past couple of years, the new Law No. 176 of the year 2018 regulating factoring was issued to accelerate the availability of cash flow of small and medium-sized businesses while avoiding the need for expensive, lengthy banking facilities with accompanying guarantees, whether personal, commercial, or corporate.

Legal affairs  

Obligations and requirements to provide loan-giving-, factoring-, brokerage-, finetrading, and ancillary services described above

In light of Egypt’s relentless pursuit of a prosperous economic climate, the Egyptian Parliament passed on the new Law No. 176 of the year 2018 regulating both financial leasing and factoring activities, promulgating financial leasing Law No. 95 of the year 1995, which aims at steering economic volume and increasing production of small and medium enterprises:

  • Factoring companies should be following law no. 176 of year 2018, regulating financial leasing and factoring activities, and the Factoring Services Decree;
  • Financial Leasing or Factoring activities may only be carried out by joint stock companies with paid-in capital of not less than EGP 10 Million, or the equivalent in foreign currency, after obtaining a license from the Financial Regulatory Authority;
  • The brokerage companies, subject to the prospective factoring agreements, must hold the relevant FRA approvals for carrying out margin lending, and to follow the applicable laws, regulations, and FRA decrees;
  • The securities, subject to the margin lending, must be from those determined by the Egyptian Stock Exchange and approved by FRA; and
  • Factoring companies should have a policy outlining the mechanism of carrying out the factoring of the financial rights arising from margin lending, and to include a template of the contract with their clients, in this regard, in accordance with FRA’s template.

Additional comments regarding the legal situation for loan-giving-, factoring-, brokerage, finetrading-, and ancillary services or what FinTech’s must be aware of in this business area

N/A.

Economic conditions

Market size for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services and biggest companies in this business area

Currently, no reliable statistics are available for Egypt on how big the loan-giving, factoring and brokerage market is, because it is newly introduced to the Egyptian market.

Additional comments regarding the economic situation for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services or what FinTech’s must be aware of in this business area

 N/A.

Authors

Close

Choose country