Contact Finance has obtained the first licence to practice consumer finance activities in Egypt, according to Mohamed Omran, Chairperson of the Financial Regulatory Authority (FRA).
The company has now come under the umbrella of new provisions laid out under Law No 18, 2020, on regulating consumer finance activity, instead of Law No 159 of 1981. Contact Finance is now also subject to the decisions made by the FRA’s Board of Directors.
These decisions regulate the procedures reconciling the situation to the bodies that engaged in the activity before the implementation of the new consumer finance regulatory law.
Article Six of the new law outlines a period of six months from the date that the law is implemented to reconcile a company’s situation.
Omran added that he has issued Resolution No. 494 of 2020, approving the second licence to carry out consumer finance activities, and which will be given to Aman Financial Services Company.
The first article of the law organising consumer finance activity has defined providers as the producers of goods or their distributors who engage in the activity of consumer finance.
The law demands that consumer finance providers (whose main activity is distribution or selling goods subject to funding) obtain an FRA approval.
Omran noted that regulations and supervision of consumer finance activity will only have a positives impact. This includes an improved economy due to increased investments and operation rates, with improved competitiveness and a possible reduction in prices.
Furthermore, an accurate database will be formed, helping the state adopt proper policies and allowing investors to make sound investment decisions. A supervisory body to which consumers can file complaints will be made available to protect them from harmful practices.