Eslam Azzam, Vice President of the Financial Regulatory Authority (FRA), has met with finance companies’ representatives to discuss their proposals for developing a range of financial activities.
These include real estate finance markets, financial leasing and factoring, consumer finance and increasing their growth rates, in addition to overcoming any obstacles to expanding these markets.
The meeting took place in the presence of members of the advisory committees and representatives of federations for each activity.
The Egyptian Financial Leasing Union called on the FRA to communicate with the relevant parties to reduce the time required to issue required approvals for implementing the agreed upon projects. These will be financed through financial leasing companies.
It includes the speed that will facilitate the development process of land and the projects that will be established on it.
Azzam noted that the FRA has prepared a guide on all applicable controls and decisions related to financial leasing and factoring activities.
The meeting reviewed the demands made by real estate finance companies and put forward by the Egyptian Union for Real Estate Finance. This, in turn, focused on facilitating the access of mortgage finance companies to low-cost financing sources.
They also expressed their desire to start issuing a new version of the Egyptian standards for real estate evaluation, and to complete the rest of the applications to keep pace with market variables.
Representatives from consumer finance companies and service providers requested a reduction in the cost of the customer’s credit inquiry service.
Azzam expressed interest in the cost of conducting credit inquiries and promised that the authority would contact the service provider to discuss the possibility of reaching the cost of similar activities to sister activities.
He also emphasised that the authority would communicate with the competent authorities at the Ministry of Finance to clarify the dependency of consumer finance companies licensed to practice the activity of the FRA. This would be followed by an exempt from value-added tax for consumer finance companies.
A total of 31 consumer finance companies have been licensed by the authority so far, despite the recent activity. The articles of association of the Egyptian Consumer Finance Federation have been prepared, and will be presented at the next meeting of the FRA’s Board of Directors.
It aims to speed up the legal procedures for the formation of a union, which will have an important role in the growth of such activity.
Regarding factoring activity, companies demanded the formation of investment funds to finance non-banking financial services companies, and the provision of financing at a favourable interest rate through financing initiatives and supporting projects and various export sectors.
The factoring companies participating in the meeting welcomed the provision of the service of deducting the deferred financial rights of the brokerage firms in securities arising from engaging in the activity of buying securities on margin for those who apply to them.
This comes in compliance with Decision No 25 of 2021, made by the FRA’s Board of Directors issued at the beginning of this month, with the aim of stimulating trading operations in securities on the Egyptian Exchange (EGX).