Cabinet approves draft bill to regulate fintech industry
The draft law that will govern the fintech space received approval from the Madbouly cabinet in its weekly meeting yesterday, cabinet said in a statement. The new law would regulate the use of fintech to deliver non-banking financial services (NBFS) in a bid to promote financial inclusion and expand the number of beneficiaries.
The 30-article bill authorizes the Financial Regulatory Authority (FRA) to license and regulate the NBFS businesses and fintech startups. The regulator will also have supervisory powers over the sector to ensure companies adhere to transparency and governance standards, in addition to protecting consumer rights.
Background: The FRA completed the first draft of the bill in July before its approval in September. The new regulation reportedly covers crowdfunding, robo-advisory, nano-finance and insurtech, and introduces penalties for regulatory breaches including imprisonment or fines of EGP 200k-1 mn.
Also approved during the meeting:
- Adding USD 22.8 mn to the inclusive economic governance grant signed last September with USAID, which will bring the US's total commitments under the agreement to USD 50.5 mn;
- New AfDB shares: The African Development Bank's board decision to allocate new shares to Egypt, raising its total shares in the pan-African lender to 10,099;
- JICA funding for power sector: A JPY 25 bn (EGP 3.58 bn) loan agreement signed with the Japan International Cooperation Agency last February to boost the electricity sector.