الهيئة العامة للرقابة المالية

Financial Regulatory Authority (FRA) has mandated that factoring companies verify invoices via a designated electronic system prior to financing. This initiative is designed to bolster the efficiency of the non-banking financial services sector, enhance governance and transparency, and mitigate the risks associated with double financing.

In collaboration with e-finance, the Authority inaugurated a digital factoring module on its electronic portal in early February. The system’s primary phase facilitates electronic verification of invoices against prior financing records by establishing a digital link with relevant government bodies, including the Ministry of Finance and the Egyptian Tax Authority.

This directive stems from Resolution No. 51 of 2026, issued during the Board of Directors meeting on February 9, 2024. Chaired by Dr. Mohamed Farid prior to his appointment as Minister of Investment and Foreign Trade, the resolution ensures that no more than one factoring transaction occurs for any single underlying asset. Furthermore, it enables companies to ‘freeze’ invoices on the electronic platform for the duration of the contract.

Factoring is a short-term financing mechanism that allows businesses to sell their invoices or outstanding accounts receivable to a third party (the factor) for immediate cash flow. This financial arrangement involves three primary participants: the seller, the debtor (customer), and the factor (factoring company).

The resolution further mandates that all factoring agreements include a provision for the registration of collateral in the Movable Collateral Registry. In compliance with Law No. 115 of 2015, this requirement secures the rights of financing entities and establishes a robust legal framework for all parties involved.

The second phase of the unified electronic system is set to deliver an end-to-end digital transformation of the factoring lifecycle – extending from initial invoice verification to final settlement. This transition is expected to significantly accelerate processing times, streamline administrative workflows, and reduce overall operational costs.

The resolution takes effect the day after its publication in Al-Waqa’i Al-Misriyya and on FRA website, providing companies a window to align their systems with the new regulations.