The cabinet headed by Sherif Ismail, the Prime Minister, approved in its meeting on Wednesday the financial leasing and factoring law draft and was sent to the state council, according to Sahar Nasr, the Minister of Investment and International Cooperation.
The Minister added that the Egyptian Financial Supervisory Authority (EFSA) has conducted a comprehensive review of the legislation governing the leasing and factoring activities To develop them as they are important activities that serve financing the projects and promoting development and production objectives through providing various tools to finance projects, whether productive or service.
Meanwhile, the Minister pointed out that the draft law was prepared to regulate the financing leasing activities by the help of the best international experiences in this regard. The aim of collecting the finance leasing and factoring activities under one legal framework is that they are non-bank financing tools to serve economic projects, whether through providing the necessary funding for these projects to obtain their needs for activity tools and supplies without requiring full payment of the purchase price of the capital assets through finance lease, or by providing cash for these projects during doing business through factoring.
Factoring activity is an integral part of the financial leasing activity. Factoring is a financing of working capital and finance leasing. It is the financing of investment assets.
The minister added that the law contributes in enhancing financial coverage and helps in spreading non-bank financing tools throughout the country by reaching segments of the society that do not currently benefit from many financial services.
The law also allowed companies, associations and licensed civil institution to practice micro finance activities according to the provisions of Law (141) for the year 2014,to provide micro finance leasing in accordance with the regulations determined by the authority directors board, in order to support and develop entities engaged in micro finance activity, also in order to expand the
the non-banking financial services scope by using the available database to reach larger dealers number in the small or craft industries, which is an additional incentive for small complementary industries and opens prospects for creating new jobs.