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Egypt’s Cabinet approves amendments to MSME, consumer finance laws

Egypt’s Cabinet approves amendments to MSME, consumer finance laws

ArabFinance: The Egyptian Cabinet has approved the draft law on amendments to some provisions of Act No. 141 of 2014 regulating the financing of micro-, small- and medium-sized enterprises (MSME) and the Consumer Finance Regulation Act issued under Act No. 18 of 2020, according to an official statement on May 11th.

The amendments target enhancing the performance of MSME and consumer financing and increasing their market reach to the highest number possible of beneficiaries as they are considered non-bank financial activities subject to the supervision of the Financial Regulatory Authority (FRA).

The law regulating the MSME finance has been amended to ban the practice of brokering activities in granting or collecting financing, or in guaranteeing fees when financing MSME, except after being listed in the registry being prepared by the FRA for that purpose.

The amendments to the law regulating consumer finance also stipulate that firms cannot practice the activities of the guarantee with fees unless they are listed in the registry being established by the FRA.

A penalty of imprisonment and/or the payment of a fine of not less than EGP 5,000 will be imposed on whoever is convicted of fraud to obtain financing from a licenced MSME entity or consumer finance services provider.

 

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