The Financial Regulatory Authority (FRA), chaired by Mohamed Farid, has issued Decision No. 258 of 2025 revoking the microfinance licences of 258 NGOs classified under Category “C”. The action follows extensive monitoring and inspection that revealed persistent non-compliance with the microfinance regulations set out in Law 141/2014 and its amendment by Law 201/2020.
The FRA said the decision aligns with its broader efforts to reinforce the stability of the non-banking financial services sector, protect client rights, and ensure a more efficient market capable of supporting vulnerable groups—contributing to wider economic and social development.
FRA’s register currently includes 754 licensed microfinance NGOs: 23 Category “A” organisations with portfolios above EGP 50m; 33 Category “B” entities with portfolios between EGP 10m and EGP 50m; and 698 Category “C” NGOs with portfolios of EGP 10m or less.
Farid stressed that licence revocation came only after the authority had allowed ample time for the violating entities to rectify their status and complete licensing requirements. All communication and warning channels, he said, had been exhausted with no response—necessitating intervention to protect market stability and client interests.
Inspections revealed that most violations centered on a complete absence of activity and failure to provide financing services to target beneficiaries, rendering the licences effectively dormant. Other breaches included severe non-compliance with supervisory obligations, particularly the continuous failure to submit periodic reports and financial statements, preventing the FRA from assessing their financial positions.
The review further showed that these NGOs were not integrated into the microfinance market infrastructure, failed to report to credit bureaus, and had lost membership in the Egyptian Federation for Micro, Small and Medium Enterprise Finance—both key prerequisites for responsible operation.
Farid emphasized that the board’s approach is not punitive but aims to build a robust, sustainable microfinance industry. Allowing inactive or non-compliant entities to remain in the market, he noted, undermines credibility and introduces systemic risks. The decision, he added, will streamline the sector, strengthen compliant institutions, enhance client protection, and support greater financial and investment inclusion.
He reaffirmed that the FRA will continue offering technical assistance and specialised training to committed NGOs and will work with relevant stakeholders to expand access to underserved customer segments. At the same time, the authority “will not hesitate” to take further action to ensure market discipline and safeguard the rights of all parties.
