GB Auto gets FRA nod to expand consumer finance activities
GB Auto has landed final regulatory approval to launch new consumer finance activities for factoring arm Drive, according to a company statement (pdf). The nod from the Financial Regulatory Authority (FRA) will allow Drive to widen its activities beyond car finance into other market segments. Drive had received an initial nod from the FRA to launch consumer finance products back in 2020.
Drive had the largest share of Egypt’s factoring market in February, increasing its market share to almost 22% in February after loaning out EGP 254 mn. Its market share in May dropped to 6.31% however, with EGP 280.6 mn worth of contracts.
Sarwa Capital’s subsidiary Contact and Raya Holding subsidiary Aman were the first companies to be granted consumer financing licenses, following the passing of the Consumer Credit Act last year. Other consumer finance outfits that had reportedly been seeking licenses at the time include EFG Hermes’ valU, Premium Card, and CI Capital’s Souhoola. Some twenty five companies are currently licensed to provide consumer financing services in Egypt FRA Deputy Chairman Islam Azzam said last week.
Consumer finance players are also in line for a VAT exemption, under an agreement with the FRA which aims to provide consumer finance players the same VAT treatment afforded to other NBFS providers.