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Sunday, 18 November 2018

Egypt’s FRA says consumer credit draft in final stages

LEGISLATION WATCH- FRA says Consumer Credit Act is in its final stages: The Financial Regulatory Authority (FRA) is in the final stages of drafting the Consumer Credit Act, FRA boss Mohamed Omran said on Thursday, according to Al Mal. The legislation would bring companies selling consumer goods on installments under FRA-imposed regulations, including requiring companies to acquire special licenses to offer installment plans. Omran said the FRA is currently mulling whether or not the bill would require companies to establish separate vehicles for cash and installment sales. The FRA has also resolved a discrepancy between the recently approved Leasing and Factoring Act and the Egyptian Accounting Standards, which would have been a hurdle for the companies subject to the proposed legislation, Omran added. We had noted on Thursday that the FRA is planning to have the act finalized by next year.

Also in the pipeline for the FRA in 2019 is the Insurance Act, which would make the FRA the primary regulator of the sector. It will contain provisions for private insurance funds and would, if passed, allow establishing separate health insurance companies, and raise insurance company capital floors to EGP 120 mn from EGP 60 mn. We had noted in September that compulsory insurance for SMEs and new freelance and seasonal job insurance regulations will also be key components of the draft.

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