The Financial Regulatory Authority (FRA) has just made it easier for credit rating companies to get operating licenses in Egypt. The FRA scrapped a requirement for credit rating agencies to be at least 10% owned by international firms in a move meant to increase the number of local credit-rating firms and boost our non-banking financial sector, the regulator said yesterday in a statement (pdf).

At least one Egyptian credit rating agency is expected to make its debut in 2022, FRA Deputy Chairman Islam Azzam said in an interview with Bloomberg Asharq (watch, runtime: 0:56). An unidentified company has already been in talks with the regulator for the past few months, and Azzam expects it to launch soon after the announcement of the new changes — though it has not submitted its registration documents yet, he said.

Egypt has only one local credit rating agency right now: MERIS (Middle East Rating & Investors Service) is a joint venture between Moody’s and Finance and Banking Consultants International (FinBi), and provides ratings for financial institutions, corporate issuers, and structured finance transactions.

And MERIS can’t do it all alone: More ratings agencies are needed to handle the growing popularity of local asset-backed securities, Assam said (watch, runtime: 2:01). Some EGP 7.2 bn worth of securitized bonds have already been issued this year and FRA head Mohamed Omran predicted another EGP 2.5-3.5 bn would be taken to market before the end of 1Q.

International shareholders may no longer be required, but international standards are: The new credit companies will be locally funded, but they will be required to follow internationally-recognized standards and regulations, Azzam said.