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Tuesday, 5 November 2019

Financial Regulatory Authority greenlights micro lenders to offer nano-lending

Startup types and bankers alike, take note: The Financial Regulatory Authority (FRA) is now allowing microlenders to begin offering nano lending services — providing mobile-based cash loans — with a cap of EGP 3k per transaction and a maximum tenor of 90 days, according to a statement. FRA Chairman Mohamed Omran said nano lending will be used to service individuals who are not financially included and are most in need of financial services. Lenders will still be required to conduct credit inquiries for applicants seeking a loan of EGP 500 or more. Under the system, credit scorer iScore will be allowed to monitor transactions to provide credit ratings for users. Three local and international companies have offered to set up a special system to digitally evaluate nano lending via phones. The Central Bank of Egypt had reportedly been planning to allow mobile lending this year as part of the country’s financial inclusion drive and in a bid to reduce the role of cash in the economy.

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