Financial Markets Adviser and former Chairperson of the FRA, Sherif Samy, said that every country in the world is keen to protect its consumers and to control markets through drafted laws, including activities of services and trade sectors.
But for consumer financing activities, countries are different in dealing with them, as Samy clarified to Daily News Egypt. He added further that it is a serious action to draft a new law to organise a sector that has been irregular for about five generations.
“It is important for the government to balance the protection of local consumers, never to overload them by additional financial burdens, and preserve merchants’ rights. Also, it is very important to ease procedures and not to overextend in applying terms that are not relevant to Egypt’s situation or nature. Actually, purchasing goods on instalments is a very common activity in our country in cities and the countryside, alike many years ago and has been gaining importance over the years,” Samy explained.
Yet, there are a couple of challenges which the government should put into its consideration while drafting the new law, as Samy indicated, as the widespread nature of this activity could make it difficult to control, in addition to the term of the client’s income and its relevance to the tranche of the monthly instalment should be a pilot procedure not an obligated one as is the case for micro-financing activities.
“Financial markets in Egypt are increasing, and non-banking services are experiencing significant growth which will have a positive impact on the market value of the Egyptian Exchange (EGX), attracting new investments and offering more financial tools for domestic enterprises. Therefore, it is essential to control such an important activity in our local market, especially since it started to attract new companies which work in the field of consumer finance,” Samy highlighted.