FRA issues new regs on licensing of microfinance firms, sets minimum capital at EGP 15 mn
REGULATION WATCH- FRA issues new regs on licensing of microfinance providers, sets minimum capital at EGP 15 mn: The Financial Regulatory Authority (FRA) issued amendments yesterday to the regulations that govern the establishment and licensing of microfinance firms, Youm7 reports. Under new rules, microfinance outfits must have a minimum issued capital of EGP 15 mn and initial paid-in capital that is equal to at least 50% of that amount and which increases gradually over a three-year period. The rules also stipulate that no one person, entity, or group can own more than 49% of a microfinance firm without receiving a non-objection from the FRA.
What about licensing fees? The annual licensing fees that microlenders will have to pay — which have been capped at EGP 100k — will be equivalent to 1% of their paid-in capital and increase gradually as capital rises. The FRA will also be claiming a quarterly tithe of 0.05% of the total funding extended by a firm during the three-month period. The FRA had issued new regulations in May for the licensing of non-banking financial institutions, which set out stipulations on ownership structure and regulatory framework.