Egypt’s Cabinet has approved during a meeting on Wednesday a new draft law regulating consumer credit activities.
According to a cabinet statement, the draft law contained provisions in 30 articles regulating all activities which provide financing for the purchase of goods and services for consumption purposes in Egypt.
“This law protects the productive, service, and informational activities of the economy as a basic component of the national economy. As the current consumer finance activity outside the banking sector is not subject to an integrated legal regulation, the draft law aims to achieve stability and transparency among its consumer credit customers, and protect them from harmful practices, as well as pave the way for households to increase their purchasing power,” said the statement.
Furthermore, the draft law does not apply to the financing activities carried out by banks subject to the Central Bank of Egypt’s supervision, even if they are intended to finance the purchase of consumer goods or services, nor do they apply to activities organised under the provisions of the laws of the real estate finance and leasing through real estate developers.
According to the draft law, in order to operate a company should be licenced by the Financial Regulatory Authority, with an issued capital of no less than EGP 10m, and the company’s founder must include ‘legal persons’ whose share of the capital should not be lower than 50%, while 25% or more of the company’s capital should be from financial institutions.