Mohamed Omran, Chairperson of the Financial Regulatory Authority (FRA), has approved the first licence for microfinance leasing activity in the Egyptian market.
The licence allows offering the first microfinance product in the national economy. This includes financing companies with low capital assets to start new projects or expand existing economic activities, whether industrial, production, service, or commercial.
Omran highlighted the last legislative amendment issued in October 2020 by Law No. 201 of 2020 regarding “the regulation of medium, small and micro enterprises financing”. This includes increasing the value of financing granted to microenterprises to EGP 200,000 instead of EGP 100,000. This would help companies get new equipment to develop their projects and create job opportunities.
The FRA Chairperson also said that the emergence of the microfinance leasing products in the Egyptian market will directly contribute to promoting the disbursement of finance for the purpose for which it is intended. It will also contribute to a significant increase in financial inclusion rates for productive and craft activities in various governorates.
It should be noted that the statistics of microfinance activity indicate a continuation in the growth trend in performance until May 2021, as the number of beneficiaries of microfinance services reached 3.3 million, of whom 2 million (62%) were women, while the share of young people (male and female) reached about 63%. The financing portfolio recorded about EGP 21.7bn in May 2021.