الهيئة العامة للرقابة المالية

Dr. Mohamed Farid – FRA Chairman:

• Ensuring stability in non-bank financial markets and safeguarding interests of market participants are key priorities for the Authority.
• In 2024, efforts focused on financial empowerment and sustainability through digital transformation, fostering business growth and expanding access to non-banking services.
• By the end of 2024, entities under the Authority’s supervision granted financing by EGP 911.5 billion.
• The year 2024 witnessed the implementation of strategic policies aimed at enhancing capital markets, insurance, and financing sectors.
• More than 20 initiatives were undertaken to promote the development of capital market.
• Egypt established the first regulated and supervised Voluntary Carbon Market in Africa, with strategic objectives to expand its reach across the continent.
• Regulatory frameworks for Special Purpose Acquisition Companies (SPACs) were refined to encourage the growth and development of emerging businesses.
• The value of securities issuances in 2024 amounted to EGP 535.5 billion.
• Market capitalization experienced a 26.2% increase, culminating in EGP 2.2 trillion by the close of the year.
• Eighteen regulatory measures were introduced to enhance insurance sector development. The inaugural unified insurance law was promulgated.
• Insurance premium values rose by 34% in 2024.
• Financial year for insurance companies was amended to reflect operational realities
• Private insurance funds with assets exceeding EGP 500 million are now required to submit periodic financial statements.
• 14 initiatives were launched in 2024 to enhance financing activities.
• Factoring activity witnessed a 69.4% growth, reaching EGP 74.6 billion.
• Consumer finance surged by 29.6% in 2024, reaching EGP 61.3 billion.
• MSME financing benefited 3.7 million individuals by year-end.
• Traditional application processes for new consumer and microenterprise finance licenses were suspended for a year.
• Egyptian Accounting Standards were updated to meet international benchmarks and align with national development goals.

Dr. Mohamed Farid, FRA Chairman convened the Authority’s Harvest 2024 Conference, under the theme “A Year of Establishing Pillars of Financial Empowerment and Sustainability”. During his address, he detailed the Authority’s principal decisions, implemented measures and performance metrics for the non-bank financial sector in 2024. The conference was attended by Dr. Islam Azzam,  FRA Vice Chairman; Mr. Mohamed El-Sayyad, FRA Vice Chairman; Dr. Mohamed Abdel Aziz, Assistant to the Chairman; Mohamed Sabry, Assistant to the Chairman; and Mohamed Ayyad, Media Advisor to Chairman. In addition to a number of FRA executives and media representatives.

Dr. Farid presented a review of the key performance indicators for the non-bank financial sector. Total financing granted by entities under the Authority’s supervision and regulatory oversight reached EGP 911.5 billion in 2024, a 2% increase from EGP 893.5 billion in 2023.

Shares issuances constituted approximately 52.6% of the total financing disbursed in 2024, establishing them as the dominant component of the overall financing value. This was followed by financial leasing contracts which accounted for approximately 13% of the total financing. Financing for small, medium and micro enterprises (SMEs) ranked third, representing 10.5% of total financing.  Factoring activity comprised 8.2%, consumer finance represented 6.7% and securities issuances (excluding equities) accounted for 6.1%. Real estate financing activity constituted 2.8% of total financing.

A striking contrast defined the Egyptian Capital Market in 2024. While primary market securities issuances, encompassing stocks, bonds, and sukuk, contracted by 11%, falling to 535.5 billion Egyptian pounds from 601.7 billion pounds the previous year, trading activity exploded. The introduction of treasury bill trading in late 2023 drove an extraordinary 344.8% increase in total trading value, reaching 14.3 trillion Egyptian pounds, thereby reshaping market dynamics.

In parallel, the Egyptian insurance sector experienced significant growth in the fiscal year 2024. Total premiums surged by approximately 34.1%, reaching 82.3 billion Egyptian pounds, up from 61.4 billion pounds in the previous year. Concurrently, the total value of compensations paid by insurance companies increased by about 15%, reaching 36.7 billion Egyptian pounds, compared to 27.3 billion pounds in the prior fiscal year, reflecting a rise in covered damages. Furthermore, policyholders’ rights expanded by 25.7%, reaching 159 billion Egyptian pounds, from 126.5 billion pounds last year.

On the other hand, Micro-insurance premiums surged by 51.8% to 586.1 million Egyptian pounds, expanding coverage for low-income populations. Agricultural premiums grew by 12.9% to 132.4 million pounds. Investment portfolios also thrived: private funds reached 160 billion pounds, a 19.7% increase, while government funds escalated by 49.4% to 1894.5 million pounds.

In 2024, Egypt’s financing sector exhibited a spectrum of growth patterns. Real estate financing experienced a remarkable 144.9% surge, reaching 25.5 billion Egyptian pounds. Financial leasing, conversely, witnessed a marginal 1.2% increase to 118.9 billion pounds. Factoring activity demonstrated robust growth, climbing 69.4% to 74.6 billion pounds. Consumer finance, a nascent sector under FRA’s supervision pursuant to Law no.18 of 2020, also expanded significantly, with granted finance rising 29.6% to 61.3 billion pounds, reflecting growing consumer demand.

Moreover, the outstanding balances of MSMEs finance reached 80.5 billion Egyptian pounds at the end of 2024, compared to 57.1 billion Egyptian pounds in the previous year, representing a 41% increase. The number of beneficiaries reached 3.7 million at the end of 2024, compared to 3.8 million in the previous year, representing a 2.3% decrease.

In 2024, MSMEs finance demonstrated significant growth, with the value of granted financing reaching approximately 95.8 billion Egyptian pounds, a 31.9% increase from the previous year’s 72.6 billion pounds. However, the number of beneficiaries declined slightly, with 3.4 million individuals and entities benefiting in December 2024, compared to 3.7 million at the end of 2023. Additionally, the Egyptian Collateral Registry , established in March 2018, witnessed substantial activity. By the end of 2024, the value of registrations on movable assets reached an estimated 3.1 trillion Egyptian pounds, encompassing approximately 202,000 registrations. Notably, the value of these registrations increased by approximately 24.5% in 2024.

Securities Market Development: 2024 Progress

In 2024, significant efforts were made to enhance Egypt’s securities market, driven by the Financial Regulatory Authority (FRA). Dr. Farid highlighted that improvements in market performance indicators stemmed from the sector’s positive response to legislative, regulatory, and supervisory actions across non-banking financial activities. A landmark achievement was the launch of Egypt and Africa’s first regulated Voluntary Carbon Market in August 2024. This initiative facilitated the registration of approximately 21 carbon reduction projects and 145,000 carbon credits, encompassing diverse sectors and extending beyond Egypt to projects in India, Nepal, and Bangladesh.

Simultaneously, FRA focused on diversifying investment products to meet citizens’ needs and promote savings. This resulted in the establishment of a comprehensive framework for gold investment funds, leading to the launch of three funds. By the end of December 2024, approximately 166,000 citizens had invested 1.3 billion Egyptian pounds in these funds.

To enhance credit rating competitiveness, Dr. Farid announced that FRA has introduced a new licensing framework, replacing the previous single-license model. This initiative has attracted several alliances of leading local and international entities, including those ranked among the top three globally. One such alliance has been selected, and FRA is currently processing its establishment and licensing, which is expected to significantly improve the efficiency, competitiveness, and quality of credit rating services.

Furthermore, demonstrating its commitment to market development, particularly concerning Special Purpose Acquisition Companies (SPACs), FRA, under Dr. Mohamed Farid’s leadership, has issued new decrees. These decrees streamline the establishment and listing procedures for SPAC shares, aiming to boost market attractiveness and expand investment options for market participants. By refining listing and delisting rules on the Egyptian Exchange, FRA facilitated the establishment of the first SPAC, authorized under Board of Directors Decree No. 2323 of 2024.

FRA has also developed listing and delisting rules, as well as regulations for specialized activities. Dr. Farid emphasized FRA’s ongoing commitment to strengthen the role of non-bank financial markets in the national economy. To this end, FRA revised listing rules to streamline capital increase procedures for expansion and business development, simplify treasury share trading, introduce subsequent registration in place of prior registration, and facilitate listing and trading of government securities and debt instruments. Additionally, FRA authorized temporary listings for new large-cap companies, approved listings for previously subscribed Egyptian companies (public or private), set listing criteria for unrated bonds and sukuk, defined bonus share distribution procedures and facilitated acquisitions of unlisted companies by listed entities, even if the former did not meet all listing requirements.

In addition, Dr. Farid highlighted FRA’s focus on enhancing corporate governance for companies operating in the non-bank financial sector. Driven by FRA’s emphasis on improved governance, disclosure, and transparence and the protection of market participants’ rights, FRA issued directives to foster the growth of the non-bank financial sector and finalize the sector’s institutional framework.

FRA Chairman announced the issuance of Decree No. 68 of 2024, which regulates the Settlement Guarantee Fund. This decree enhances the Fund’s mechanism for ensuring the fulfillment of obligations arising from listed securities trading and related settlements, while also mitigating counterparty risks.

He further stated that FRA has continued its efforts to develop non-bank financial markets. This includes refining rules for trading unlisted securities and ownership transfer procedures, revising financial solvency standards and net liquid capital calculations for securities firms and prohibiting financial transfers between customer accounts across different securities companies or within the same firm. FRA also regulated trading in government securities and financial instruments on the secondary market and strengthened Anti-Money laundering and counter-terrorism financing (AML/CFT) controls for entities operating in the non-banking financial sector.

Insurance Developments in 2024

Dr. Farid detailed the Financial Regulatory Authority’s (FRA) efforts in implementing the Unified Insurance Law No. 155 of 2024, enacted last July. FRA focused on developing and issuing its regulatory framework, beginning with directives for insurance companies to align their operations with the new law by December 2024.

Furthermore, FRA approved amendments to the Governmental Insurance Fund’s regulations, designed to secure postal services against potential risks. In a move to expand financial inclusion, FRA increased the maximum micro-insurance coverage by 25%, raising it from EGP 200,000 to EGP 250,000, thereby enhancing the accessibility of suitable financial and insurance products for diverse societal segments.

FRA also issued Decree No. 271 of 2024 outlining the regulations and fees for publishing official decisions of insurance companies, private insurance funds, unions and affiliated entities on FRA’s website. Subsequently, Decree No. 183 of 2024 standardized the financial year for insurance and reinsurance companies to a calendar year (January to December), effective from the financial year commencing January 1, 2025.

FRA further refined the regulatory framework for private insurance funds, insurance, and reinsurance companies, addressing practical challenges arising from differing financial year-end dates between Egyptian and international entities, which had previously caused procedural delays. FRA Chairman announced a mandate requiring private insurance funds with assets exceeding EGP 500 million to produce periodic financial statements compliant with Egyptian Accounting Standards.

Moreover, FRA established stringent criteria for the selection of expert board members for private insurance funds. These criteria mandate that nominated members maintain good standing, possess a minimum of seven years of relevant experience and avoid dual roles as board members and employees. They are also required to disclose any potential conflicts of interest. FRA also outlined clear selection procedures for these expert board members.

Subsequently, Decree No. 2908 of 2024 was issued, extending the deadline for insurance companies to align their operations with the Unified Insurance Law. This extension requires companies to convene an extraordinary general assembly to amend their articles of association and core objectives, secure ratification of the meeting minutes by the relevant administrative authority and register these amendments in the commercial register. Companies are obligated to submit a comprehensive file documenting these procedures to FRA within one week of completion.

In addition, FRA issued Decrees No. 236 and 237 of 2024, which established model bylaws for private insurance funds and defined the regulations for their listing, liquidation and delisting , including the requisite conditions and amendment procedures.

Furthermore, Decree No. 211 of 2024 revised the registration criteria for e-collection companies. Key requirements now include a minimum issued and paid-up capital of EGP 20 million or its foreign currency equivalent, ensuring that equity is not less than the paid-up capital. Applicants must also submit their latest audited financial statements or approved financial position, as applicable, and provide a professional liability insurance policy from an FRA-licensed Egyptian insurance company. The policy must cover professional risks with liability limits of 10% of the company’s total revenue, as evidenced by the most recent audited financial statements or approved financial position at initial registration.

Financing Developments in 2024

Dr. Farid underscored FRA dedication to bolster the non-bank financial sector’s contribution to the national economy via strengthened regulatory, organizational and legislative frameworks. FRA disseminated circular outlining regulations for credit portfolio transfers in non-bank financing, designed to promote sector stability.

Furthermore, FRA broadened its securitization regulations to include financial rights originating from both non-bank financing and other sectors. This expansion affirms FRA’s endorsement of information memoranda and public subscription prospectuses for securitization bonds underpinned by diversified financial rights portfolios.

Furthermore, FRA established clear guidelines for listing, renewal, and delisting of real estate agents and brokers. Renewal applications must now be submitted within a 30- to 90-day window before listing period expires, using a standardized form.

FRA also introduced regulations governing contribution and ownership percentages within non-bank financial institutions, promoting financial stability and ensuring uninterrupted, efficient service delivery to clients.

On the other hand,  Decree No. 178 of 2024 streamlined FRA’s approval process for ownership, control, and merger transactions within the non-banking financial sector, excluding insurance and reinsurance. Board of Directors approval is now required only when a transaction results in a market share exceeding 10%; otherwise, approvals are issued by the Authority, expediting the process.

Also, FRA has implemented a one-year, renewable suspension of traditional applications for consumer finance and microenterprise financing licenses, as per Decree No. 184 of 2024. This action follows the issuance of 10 new microenterprise-financing licenses in the past two years, with an additional 6 applications currently under review, from a pool of 22 licensed companies and 10 applications from civil associations. In the consumer finance sector, FRA granted 15 licenses over the same period, with 4 applications pending, out of 45 licensed entities.

Furthermore, FRA has revised licensing regulations for banks and non-bank financial institutions, including those involved in investment fund activities. These amendments now permit FRA to license non-bank financial entities, or those engaged in investment fund activities directly or jointly, to operate investment funds independently. This is contingent upon a minimum 50% ownership stake held by banks, public legal entities with investment objectives, or FRA-approved Arab, regional, and foreign financial institutions and companies.

A Cabinet decree was issued, amending select provisions of the Real Estate Finance Law’s Executive Regulations, thereby requiring licensed real estate finance companies to augment their minimum issued and paid-up capital to EGP 100 million, from EGP 50 million, in either cash or its equivalent in foreign currency, calculated at the Central Bank of Egypt’s published exchange rate. Furthermore, the Authority issued a decree revising real estate finance standards, with the aim of facilitating the recovery of financial obligations by financing entities in the event of client breaches. The decree included increasing the minimum issued and paid-up capital for real estate finance companies to EGP 100 million instead of EGP 50 million, provided that companies reconcile their status within a year from the date of the decree’s implementation, with the possibility of extending the deadline for two years if serious justifications are provided.

FRA Board also approved an amendment to licensing requirements for real estate finance and refinancing, aiming to boost sector growth and strengthen company solvency against economic volatility and currency devaluation.

Moreover, FRA amended liquidity standard for real estate finance companies to ensure their ability to meet both short-term rapid liquidity demands and long-term liquidity needs. This amendment acknowledges the extended repayment periods inherent in real estate finance, a medium-to-long-term financing product, thereby strengthening overall liquidity ratios.

The amendment specifies that the ratio of liquid assets—including cash equivalents, bank certificates of deposit and savings, government treasury bills, money market fund units and debt instrument – to net cash outflows over a 30-day period must be at least 100%.

FRA Board also amended real estate finance regulations to bolster companies’ ability to recover outstanding obligations from investors in default. This amendment establishes a 60-day notification period for investors to rectify their obligations post-expiration of lease, murabaha, or participation agreements, subsequent to a 30-day grace period from the original due date.

Furthermore, FRA Board increased the maximum micro-enterprise financing limit by 10%, to EGP 242,000. This amendment supported financing needs of approximately 21,104 micro-finance clients across associations and companies, with a total financing value of EGP 4.8 billion and an average financing amount of EGP 226,000 per beneficiary, from January to June 2024, facilitated through 34 financing entities.

FRA approved amendments to micro-finance standards, requiring companies, associations, and civil institutions to provide GPS coordinates for project locations (via Google Maps) when financing exceeds EGP 20,000. These coordinates must be recorded in their information system database. This measure strengthens the credibility of project financing and safeguards lenders against fraud, thus protecting their funds.

Key Efforts in Professional Development During 2024

FRA Chairman emphasized the Authority’s commitment to develop skilled professionals capable of transforming the non-bank financial sector to better serve both the economy and the public. This is achieved through key initiatives across its core operational areas:

Capital Market: FRA issued a directive to regulate licensing and ongoing professional development for key personnel in securities firms, ensuring competence and suitability. This measure enhances firm efficiency and competitiveness in client service delivery.

Furthermore, Decree No. 136 of 2024 was enacted, outlining the composition of MCDR board of directors and the criteria for board member candidacy. This aligns with the Central Depositary Law, ensuring competent leadership and continuous development of the company.

Insurance: A collaborative protocol was established between the American University and Insurance Federation of Egypt “IFE” to train actuaries. This partnership seeks to build capacity and produce a new generation of qualified actuaries for the insurance market, addressing the current shortage and supporting FRA’s objective to grow the insurance sector’s GDP contribution.

Within the same context,  FRA sustained its focus on enhancing professional capabilities across all sectors. A training program was completed for equal opportunity unit members from various government agencies. This initiative promotes community development, empowers informed financial decision-making, fosters financial, investment, and insurance inclusion and promotes women’s economic empowerment and participation.

On the other hand, the Egyptian Center for Arbitration and Settlement of Non-Banking Financial Disputes (ECAS), in partnership with Baker McKenzie International Law Firm, introduced the Equal Representation in Arbitration Pledge (ERA Pledge) to Egypt. This initiative aims to advance gender parity in arbitration panels and encourages organizations to implement policies that prioritize gender diversity in arbitration proceedings.

Furthermore, FRA Chairman met with real estate developers to discuss non-bank financing solutions and the benefits of stock exchange listings, aiming to support their strategic goals.

Additionally, the Financial Services Institute, FRA’s training affiliate, entered into a cooperation protocol with the Instituto de Estudios Bursátiles (IEB). This landmark agreement will introduce an internationally recognized Master’s degree program in Financial Markets to Egypt. The curriculum is designed to equip students with a robust and comprehensive understanding of all facets of finance, emphasizing the practical application of knowledge. By seamlessly integrating theoretical concepts with real-world financial scenarios.

Key Efforts in Developing Egyptian Accounting Standards During 2024

Dr. Farid clarified that the development of Egyptian Accounting Standards aligns with the goal of harmonizing with international standards, adopting best global practices and supporting the Egyptian government’s reform agenda for sustainable growth and development.

In this respect, Prime Ministerial Decree No. 636 of 2024 was issued, based on a proposal from the Permanent Committee for Egyptian Accounting Standards at the Financial Regulatory Authority. This decree mandates amendments to certain provisions of Egyptian Accounting Standards, aiming to bolster the financial reporting capabilities of businesses across various sectors, thereby facilitating informed investment and financing decisions.

Specifically, the decree entails the amendment of three Egyptian Accounting Standards: Egyptian Accounting Standard No. 17 (Separate Financial Statements), Egyptian Accounting Standard No. 34 (Investment Property) and the issuance of a new accounting guideline for carbon credits.

Furthermore, Decree No. 3527 of 2024 amended Egyptian Accounting Standards, incorporating a new standard, No. 51 addressing financial statements in hyperinflationary economies. This addition aims to provide guidance for entities whose functional currency operates within a high-inflation environment.

FRA also issued several decrees, including FRA Board Decree No. 131 of 2024, which regulates the operation of Audit Quality Control Unit for registered auditors. The Unit’s board composition now includes a representative from the Central Bank of Egypt, appointed by the Governor; a representative from the Egyptian Federation for Securities, appointed by its Chairman; a representative from Federations of non-banking financial entities, appointed by FRA Chairman; and two experienced auditors, also appointed by the FRA Chairman.

In addition, FRA enhanced the quality and conduct standards for auditors registered in its records in accordance with Decrees No. 174 and 175 of 2024 that enhance the efficiency and competitiveness of professionals within the non-bank financial sector, encompassing registered auditors.

In a related initiative, FRA established a dialogue platform in collaboration with key financial and business organizations, including the Egyptian Society of Accountants and Auditors (ESAA), the Association of Chartered Certified Accountants (ACCA) and the Center for International Private Enterprise (CIPE). This platform facilitates the review of ongoing reforms and developments aimed at strengthening the non-bank financial sector’s contribution to the national economy. Through a series of seminars and dialogue sessions, FRA addressed recent updates to accounting standards, emphasizing their role in maximizing the developmental impact of the Authority’s regulations and policies.

Key Efforts in Developing FinTech During 2024

FRA has issued a set of decrees and executive regulations to accelerate the pace of digital transformation, aiming to improve financial inclusion levels to expand the base of beneficiaries of non-bank financial services.  These efforts began in 2022 with the promulgation of Law No. 5 of 2022. This law specifically regulates the use of financial technology (FinTech) within non-bank financial activities.  Following the passage of Law No. 5, FRA issued Decree No. 58 of 2022.  This decree outlined specific conditions and procedures necessary for companies and entities seeking to establish, obtain licenses and receive approvals to conduct non-bank financial activities using FinTech.

Building upon these foundational legal and regulatory instruments, FRA issued Decree No. 139 of 2023 outlines the required technological infrastructure, information systems, and security mechanisms for FinTech use in non-banking financial activities.

Dr. Farid also shed light on Decree No. 140 of 2023, the first regulatory decree of its kind in the financial sector. This decree addresses digital identity, digital contracts, digital registries, permitted uses of fintech in non-bank financial activities and necessary compliance measures. This in addition to Decree No. 141 of 2023 that establishes the Outsourcing Registry for FinTech companies providing outsourcing services, including E-KYC and E-contract records to financial institutions.

Then, FRA has issued Decree No. 57 of 2024, which establishes rules for regulating the operation of Robo-Advisors for Investment. This marks the first time such regulations have been introduced in Egypt. Robo-Advisor is an electronic system that provides financial advice to clients for the purpose of creating, managing, and rebalancing an investment portfolio using AI algorithms.

FRA also issued Circular No. 3, outlining procedures to strengthen cybersecurity within non-bank financial institutions. This initiative is part of FRA’s strategy to accelerate digital transformation, aligning with the Egyptian government’s objectives to expand financial inclusion and extend non-bank financial services to a broader population. FRA emphasized the critical importance of cybersecurity compliance for market stability, consumer protection and business continuity.

Then, a series of pivotal decrees were issued to strengthen regulatory frameworks and ensure their efficient execution. To ensure seamless electronic connectivity with the Authority, a decree was issued, obliging insurance companies to substantially update their technological infrastructure. This initiative aims to drive comprehensive automation across insurance operations, enabling real-time monitoring by the Authority and formulating comprehensive regulatory oversight models. Essentially, this digitalization process will deliver accurate statistical data and immediate information, facilitating informed decision-making based on comprehensive data insights. These measures will improve market performance, streamline operations and strengthen regulatory enforcement across the insurance industry.

As part of its ongoing efforts to support digital transformation and financial inclusion, the Authority entered into an agreement with the National Telecommunications Regulatory Authority (NTRA). This agreement, which centers on customer data verification services in Egypt aims to accelerate the digitization of non-bank financial transactions. Consequently, Decree No. (186) of 2024 was issued, mandating insurance companies, companies and entities licensed to conduct non-bank financial activities to use fintech to verify the accuracy of customer mobile phone ownership data through electronic linkage with the NTRA.

Furthermore, Decree No. (211) of 2024 was issued regarding the conditions and regulations for registering E-Collection Companies. As a result, the Authority facilitated the launch of the first strategic partnership between the insurance and telecommunications sectors. This partnership leverages the telecommunications company’s extensive branch network, licensed by the NTRA, to market and distribute insurance products, directly supporting FRA’s goal of expanding insurance coverage and enhancing inclusion.

In a landmark move, the Authority facilitated a strategic partnership agreement between Post for Investment (PFI) and AXA Egypt, paving the way for the launch of Egypt’s inaugural micro-insurance company, in compliance with the Unified Insurance Law.

To foster innovation in the non-bank financial sector, the Authority launched its inaugural regulatory sandbox for fintech applications, as mandated by Decree No. 163 of 2024. This sandbox facilitates  testing of cutting-edge fintech solutions and business models by both new and existing entities within the Authority’s fintech outsourcing registry.

The regulatory sandbox support and facilitate the entry of startups with smart digital solutions into the market, enhances regulatory fintech understanding, refines practices for sustainable financial growth and drives non-bank sector innovation. These goals are achieved by cultivating a supportive regulatory environment that provides financing, investment and insurance solutions for individuals and companies