الهيئة العامة للرقابة المالية

• Non-bank financing entities seeking to transfer credit portfolios must first obtain FRA’s approval.
• FRA ensures the efficiency of non-bank financial markets and protects the rights of clients.

FRA headed by Dr. Mohamed Farid – FRA Chairman has issued circular no.6 of 2024 outlining new controls for the transfer of credit portfolios from non-bank financing entities to other licensed financing entities, banks, securitization companies or investment funds.

The new guidelines aim to ensure proper oversight of non-bank financial markets and safeguard the interests of market participant.

According to the circular, non-bank financing entities seeking to transfer credit portfolios must first obtain FRA’s approval.

The request must also include an approval from the relevant authorities overseeing the transfer.

The rule applies to any licensed entity engaged in non-bank financing activities, such as real estate financing, financial leasing, factoring, and consumer finance, as well as institutions and NGOs engaged in MSME finance.

The new regulations restrict the use of guarantees in consumer financing contracts to a single transfer, preventing their use in multiple transactions.

Additionally, it requires that transferred portfolios must show regular payments from debtors, based on the transferor’s data. An electronic file detailing the credit rights to be transferred must be attached, using the Authority’s specified templates.

Transfer agreement should also state which party is obligated to update the data in credit bureau “I-score”, following the rules and procedures set by the Central Bank of Egypt.