New executive regulations for the movable collateral law were issued by the Minister of Investment Dalia Khorshid on Thursday. The regulations aim to establish the first electronic registration in Egypt meant to guarantee creditors’ rights. This would facilitate the granting of funds and would reduce the risks of small- and medium-sized projects.
Khorshid said this places Egypt among roughly 40 countries that have legislation regulating movable collateral, including the United States, Canada, Australia, Ireland, India, Singapore, Indonesia, Mexico and Argentina. She added that the application of a movable collateral registry will improve Egypt’s place in the World Bank’s annual availability of funding index in the Doing Business report.
She noted that the regulation was issued after consultations with a number of banks, financial leasing companies, and legal experts.
The chairperson of the Egyptian Financial Supervisory Authority (EFSA), Sherif Samy, said the regulations deal with debtor rights and protection from creditors. He added the regulations also deal with bankruptcy and cases where debtors breach their obligations and whether they must pay the instalment or the debt.
Samy said the EFSA is allowed to assign one of the specialised agencies to design, manage and run the electronic registry, under the supervision of the EFSA.