The Financial Regulatory Authority (FRA), chaired by Mohamed Farid, issued Resolution No. 98 of 2023 to increase the maximum limit for financing from companies, associations and civil institutions to micro projects.
The decision included increasing the maximum amount of financing granted by companies, associations, and civil institutions to finance micro-projects, by 10%, to become EGP 220,000 instead of EGP 200,000 currently.
Farid said that Law No. 201 of 2020 amending some provisions of Law No. 141 of 2014 regulating microfinance activity has granted the authority’s board of directors the authority to approve an increase in the maximum limit for financing a microproject or a single natural person, not exceeding 10% annually, according to circumstances.
He pointed out that the decision is in recognition of the FRA’s awareness of the effects of various economic variables, which required the need to develop rules regulating the practice of non-banking financial activities to ensure the continuity of its important role in helping individuals and institutions meet their financing and investment needs.
Farid explained that the amendment issued by the Authority to increase the maximum financing granted by companies, associations and civil institutions to finance micro-projects, which gives greater flexibility to obtain appropriate financing, whether to start or develop projects, develop their business volume and increase their competitiveness, and that this amendment represents an interaction with economic changes in the markets to counter the effects of the high inflation rate, the Authority aims to provide appropriate funding for middle-income groups within the framework of the state’s plan for financial inclusion.
Farid indicated that the Authority is working continuously to provide appropriate solutions and alternatives to improve the level of efficiency and competitiveness of non-banking financial markets, including the financing industry for medium, small and micro enterprises, in the light of technical discussions with all entities subject to its oversight in order to review the opportunities, challenges and developments facing all relevant parties with the aim of taking the necessary procedures and issuing amendments and controls that help ensure the continuity of the growth of the markets, as these amendments had already been issued by a number of discussions with the Advisory Committee for Financing Medium, Small and Micro Enterprises to discuss the mechanisms of developing the markets.
He stressed the importance of updating policies that support the development of the non-bank financing industry and working to create the necessary conditions for individuals and companies to benefit from these services and financial solutions to be able to grow and develop their business, pointing to the importance of financing companies conducting the necessary credit studies as well as conducting field visits to ensure the existence of activities economic conditions among applicants for financing, in addition to the need to develop databases to enhance the ability of individuals and companies to obtain financing.
The value of financing balances for medium, small and micro enterprises amounted to EGP 42bn in February 2023, compared to about EGP 29bn in February 2022, and the number of beneficiaries reached 4 million.