الهيئة العامة للرقابة المالية

FRA Revokes 260 ‘Additional’ Microfinance Licenses for Legal and Regulatory Violations – Wednesday 3 December 2025

• FRA has canceled 518 licenses, all assigned to non-governmental associations and institutions Category (C).
• The Authority’s inspections revealed that the violating entities were neither actively providing microfinance nor submitting mandatory financial reports.

Dr. Mohamed Farid:

• Building a strong non-banking financial sector requires standardizing regulatory records, eliminating non-compliant firms, and supporting compliant institutions.
• The digitalization of the sector critically depends on the availability of accurate data and metrics concerning the size and performance of its activities.
• Our goal is to build a highly efficient market capable of delivering critical financing to the most vulnerable people.

In the framework of the Financial Regulatory Authority (FRA)’s efforts chaired by Dr. Mohamed Farid, to enhance the discipline and efficiency of the microfinance sector, FRA Board of Directors issued a new resolution to revoke the licenses of 260 non-governmental associations and institutions classified under Category (C). This action follows proven violations of the legal and regulatory controls governing the activity, bringing the total number of revoked licenses to 518.

FRA had previously issued a similar resolution on November 16^th to revoke the licenses of 258 non-governmental associations and institutions (Category C) due to non-compliance with the regulatory controls for practicing microfinance activity.

Continuous inspections conducted by the Authority on entities under its supervision, as part of its strategy to raise market efficiency, revealed that the 260 Category (C) microfinance institutions had completely failed to conduct operations and provide any financing services to the target groups. Furthermore, they showed persistent failure to submit mandatory periodic reports and financial statements, which prevented the Authority from assessing their financial status and monitoring performance.

Dr. Mohamed Farid, FRA Chairman commented that these measures are essentially a restructuring aimed at ensuring the sector’s evolution. He stressed that non-adherence to regulatory controls hinders market efficiency and necessitates the Authority’s intervention.

He asserted that the Authority aims to accelerate the digitization of the sector to ensure data quality and facilitate supervisory monitoring. Dr. Farid warned that the presence of entities failing to send regulatory reports will negatively impact market efficiency, thereby threatening  desired development and growth.

FRA Chairman affirmed the Authority’s primary commitment is to the financial empowerment of the most vulnerable groups. To achieve this, the FRA actively seeks to support and strengthen institutions that demonstrate a responsible and fully transparent ability to deliver financial inclusion. This targeted support is designed to enhance the capacity and operational efficiency of compliant institutions.

Dr. Farid highlighted that the Authority will dedicate resources to provide intensive technical support and advanced training programs in collaboration with the Egyptian Microfinance Federation. This is aimed at enabling serious institutions to lead the next phase of non-banking financial expansion. He concluded that  FRA’s philosophy is rooted in enhancing sector efficiency and building a strong, resilient and sustainable market.

It is noteworthy that the license revocation is strictly limited to the microfinance activity and does not affect the legal entity status of the associations or their other community activities authorized by the Ministry of Social Solidarity.

Dr. Farid called upon the associations subject to the resolution to continue their developmental role and redirect their efforts towards their other community fields of work, such as health, education and social solidarity. He urged their effective participation in the state’s development plans and initiatives, emphasizing that the Authority appreciates the role of NGOs in Egypt and that the cancellation of a financial license does not diminish the importance of their other societal functions.

He pointed out that the Authority did not resort to this measure until after granting the non-compliant associations a sufficient period to rectify their status and meet licensing requirements and after exhausting all means of communication and warnings without any response. This decisive intervention was necessary to preserve market stability and protect the rights of stakeholders.

He affirmed that the Authority, in cooperation with the Egyptian Microfinance Federation and partner entities, will continue to provide technical support to serious associations and institutions, thereby enhancing their operational capacities and supporting the establishment of a strong, disciplined and sustainable sector.

It is worth mentioning that the Authority’s official register now includes 494 licensed microfinance associations and institutions. These entities are distributed by the size of their financing portfolios as follows: category (A) includes 23 associations with portfolio value exceeding EGP 50 million. Category (B) includes 33 associations with portfolio value ranging between EGP 10 million and EGP 50 million.

Category (C) includes 438 associations with portfolio value of EGP 10 million or less.

FRA Announces New Unified Database Launched to Combat Cash-Out Schemes and Fraud in Consumer Finance – Monday 1 December 2025

• Anti-Fraud Committee of the Egyptian Federation for Consumer Finance coordinates with member companies and verifies the data’s accuracy.
• The new database lists individuals (employees, merchants, brokers) added by companies and approved by the Federation’s Anti-Fraud Committee for proven harmful practices.
• The database enforces FRA’s mandatory negative list for individuals proven to have conducted cash-out financing of consumer loans.
• This database is established to improve discipline, stability and consumer protection.
• The data incorporates customer credit history to assess financial solvency, inform lending decisions and ultimately reduce default risks.
• The new database empowers companies to better detect fraud and prevent cash-out financing, safeguarding customers and investors from harmful practices.
• Companies have already completed registration in the database which is electronically linked to the Authority.
• The Authority hosted a workshop for all consumer finance companies and service providers, featuring a presentation by the Federation’s Anti-Fraud Committee.
• The Authority will take decisive action against harmful non-banking financial practices.

FRA announced that the Anti-Fraud Committee of the Egyptian Federation for Consumer Finance has completed the preparation of the first centralized and unified database for entities and individuals involved in harmful practices, such as cash-out financing of consumer loans and fraud. This initiative is in implementation of FRA Board of Directors resolution mandating the Federation to prepare a negative list of all parties proven to have performed cash-out financing of loans intended for consumption. The electronic link established between companies, service providers and FRA allows immediate supervision and facilitates necessary regulatory action.

The database is a key reference for all sector stakeholders both companies and service providers. It allows them to check parties involved in harmful practices before any engagement, including hiring, granting financing or dealing with them as merchants within the approved network.

These efforts are integrated with the plans adopted and implemented by FRA, which include various executive programs covering awareness, protection and combating fraud. FRA takes necessary measures to enhance financial stability in the sector and protect the rights of all stakeholders, including shareholders, consumers, merchants and corporate credit providers. Additionally, FRA is committed to ensuring that all companies and service providers comply with the regulations and controls governing the activity through continuous and periodic monitoring. As a crucial part of its supervisory and regulatory function, FRA works to ensure the positive developmental and social impact of consumer finance, preventing harmful practices that could harm the sector or stakeholders.

The new database includes data of employees, merchants and brokers proven to have violated sector regulations. Furthermore, by including comprehensive customer credit history, the system allows accurate financial solvency assessment and supports stronger lending decisions, thereby significantly reducing default risks. This capability also enhances companies’ ability to detect fraud and cash-out financing which protects the rights of customers and investors from uncontrolled practices.

Consumer finance companies are responsible for adding data to the database, while the Federation’s Anti-Fraud Committee examines and approves it to become an official reference for companies and service providers. A group of companies has already begun registering violation data through the database which is electronically linked with the Authority.

In support of the Authority’s commitment to the stability and discipline of consumer finance market, FRA organized an extensive introductory workshop for consumer finance companies and service providers to review the working mechanisms of the database dedicated to combating financial fraud and cash-out financing.

Representatives of the Federation’s Anti-Fraud Committee delivered a detailed presentation on the database’s operating mechanisms and data population procedures. Attendees included licensed companies, service providers and a broad range of consumer finance stakeholders. Notably, personnel from different departments such as Communications, Information Systems, Risk, Anti-Fraud and Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) officers attended the workshop.

The meeting included an open dialogue where the Authority reviewed its ongoing efforts to protect customers from fraud, cheating and deceit. It also addressed company inquiries regarding the mechanisms for coordination and integration in combating harmful sector practices.

The Authority stressed its zero-tolerance policy toward any activities that endanger non-banking financial markets, harm customers or compromise market stability.

Widespread Warnings for Citizens

In a related effort, the Authority intensified its awareness campaigns across various platforms. These warnings caution citizens against responding to calls for financing or investment issued by unlicensed entities or those violating non-banking financial laws, emphasizing the grave risks posed to their money and rights. Currently, the regulated consumer finance sector comprises 34 licensed companies and 12 service providers operating legally.

The activity is subjected to the Authority’s supervision in accordance with Consumer Finance Law No. 18 of 2020, which established a disciplined legal framework governing governance and transparency rules and protecting the consumer. It ensures consumers obtain safe and regulated financing for purchasing goods and services, including educational services, sports club memberships, travel and tourism, maintenance of cars and household appliances and renewable energy solutions for homes.

The Authority had previously announced – last May – a negative list containing entities proven to conduct non-banking financial activities in violation of the law, based on received complaints. This list is updated periodically according to new developments.

Dedicated Channels for Supervision and Complaints:

The Authority has established communication channels, including specific email addresses, to receive citizen complaints regarding suspicious financing. A separate email is provided for companies and institutions seeking to verify their business model’s compliance with regulatory requirements, thereby ensuring the activity’s sustainability and credibility.

The Authority’s efforts stem from its strategy of continuous consultation with consumer finance companies, ensuring that regulatory decisions and resolutions promote real developmental impact, transparency and governance in the market.

FRA Issues First “Comprehensive Services Guide” to Enhance Transparency and Data Availability – Monday 1 December 2025

Dr. Farid:

• A unified and unprecedented roadmap that places Egypt on the global map of transparency in non-banking financial activities.
• The achievement embodies the Authority’s vision for a more competitive and transparent financial system.
• Our objective is to accelerate and streamline the business environment to support national economic growth.
• The Guide is not merely a reference, but a pivotal executive tool in the Authority’s digital transformation journey.

Marking a major turning point in non-banking financial services, FRA issued its first unified services guide. This action is a direct fulfillment of FRA’s mandate as the independent regulatory body to regulate, develop and facilitate the business environment for both individuals and companies across the non-banking financial sector in Egypt.

This unprecedented Guide represents a pivotal executive tool for achieving institutional transformation and enhancing the efficiency of the workflow system.

It is issued as part of the Authority’s vision to improve the business environment, simplify procedures and promote transparency and data availability. Ultimately, this supports the establishment of a strong, advanced non-banking financial sector capable of attracting local and foreign investments, achieving financial inclusion and ensuring economic stability.

Dr. Farid, FRA Chairman affirmed that this Guide implements the Authority’s ambitious strategic plan to develop the sector’s institutional and regulatory infrastructure. He emphasized that this work is designed to build a stimulating business environment attractive to both local and foreign investments, thereby enhancing financial stability, promoting financial inclusion and safeguarding the rights of all stakeholders.

FRA Chairman emphasized: “This Guide is not simply a reference; it represents a pivotal executive tool for the Authority’s digital transformation. Its purpose is to lay the foundation for unifying procedures and ensuring unwavering fairness and efficiency in the delivery of our services.”

He affirmed that the Authority is constantly working to update and develop its services periodically to reflect global legislative developments. This effort embodies FRA’s vision for a non-banking financial sector that is more inclusive, sustainable and competitive.

The Guide serves as the official and sole reference for all companies, institutions and individuals under FRA’s supervision. These areas encompass the Capital Market, Insurance Activity and Non-Banking Financing Activities. Furthermore, the Guide details crucial supporting services, including financial reporting, compliance procedures, complaints handling, auditor oversight and various other related functions.

Stemming from this comprehensive role, the Guide was designed to achieve the maximum degree of transparency by standardizing procedures through precise definitions for each service and clearly specifying required documents and submission mechanisms, thereby eliminating personal discretion. Furthermore, it establishes clear timeframes via a mandatory and fixed timeline for obtaining each service, ensuring speed and efficiency of performance, in addition to outlining the regulatory rules and controls for each activity.

The Guide offers an unprecedented scope of coverage, encompassing all Capital Market and Investment services, including establishment services, trading, investment funds, issuance services and corporate governance.

It also covers all services for insurance and reinsurance companies and services offered for registering professionals in the insurance sector. Similarly, it covers all non-banking finance services: real estate finance, financial leasing, factoring, microfinance and small and medium enterprise (SME) services.

The Guide is designed to boost market confidence and stability by giving stakeholders a clear understanding of their rights and obligations. It also serves as an advanced step in the Authority’s digital transformation, enabling service delivery via sophisticated electronic mechanisms built on efficiency and quality standards.

FRA urges all stakeholders in non-banking financial activities to utilize this Guide as a fundamental and reliable reference. Furthermore, FRA confirms that it will update the Guide periodically to reflect legislative and regulatory developments and ensure its continuous alignment with international best practices.

The Comprehensive Guide is available on the Financial Regulatory Authority’s website (Click here).