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Wednesday, 1 July 2020

Seven would-be consumer finance companies want to enter the increasingly crowded industry

Seven consumer finance companies have license applications in with the FRA to formally join an increasingly crowded industry, Al Mal reports, citing unnamed sources with knowledge of the matter. The newspaper suggests there are as many as 25 consumer finance companies that need to finish their license applications, with the FRA expecting to have licensed as many as 30 players by the end of the year. Egypt will have 10 licensed companies if the seven applications now under review win FRA approval, the newspaper says.

Where things stand: Sarwa Capital’s Contact and Raya Holding’s Aman became the country’s first to obtain consumer finance licenses in April, under the new Consumer Credit Act. EFG Hermes’ valU, Premium Card, and CI Capital’s Souhoola have also applied for licenses.

The FRA announced new solvency standards for consumer finance companies earlier this week, limiting to 10% of their capital base their lending to single borrowers, and to 9x their equity value the loans they are allowed to take out. The regulator also said new capital requirements will be introduced without providing specifics.

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