Regulatory Alerts2023-01-01
Decision of the Board of Directors of the Authority No. 82 of 2023
The General Authority for Financial Supervision issued Decision No. 82 of 2023 to amend the financial solvency standards for consumer financing companies. The decision replaces the risk-weighted assets calculation table in Article 1 of Decision No. 101 of 2020, introducing updated risk weights ranging from 0% for cash and government securities to 200% for irregular consumer cash financing delayed over 30 days. This regulatory update takes effect the day after its publication in the Egyptian Gazette and on the Authority’s website.
Egyptian Gazette – Issue 91, Supplement (A) on April 19, 2023
11 General Authority for Financial Supervision Decision of the Board of Directors of the Authority No. 82 of 2023 Dated 12/4/2023 Amending Decision of the Board of Directors of the Authority No. 101 of 2020 Regarding the Financial Solvency Standards for Companies Operating in Consumer Financing Activities
The Board of Directors of the General Authority for Financial Supervision Having reviewed Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments; and Law No. 18 of 2020 regulating consumer financing activities; and Decision of the Board of Directors of the Authority No. 101 of 2020 regarding the financial solvency standards for companies operating in consumer financing activities; and Decision of the Board of Directors of the Authority No. 81 of 2023 regarding the controls for granting cash financing by consumer financing companies; and after approval by the Board of Directors of the Authority in its meeting held on 12/4/2023; has decided:
(Article One) The table for calculating risk-weighted assets, included in Item (Second: Risk-weighted assets "Solvency Ratio Denominator") of Article (1) of the financial solvency standards for companies operating in consumer financing activities issued by Decision of the Board of Directors of the Authority No. 101 of 2020, referenced above, is hereby replaced with the following table:
| Financial Position Items | Risk Weights |
|---|---|
| Cash and cash equivalents | 0% |
| Government securities (Treasury bills – Treasury bonds) | 0% |
| Deposits with banks in local currency | 0% |
Egyptian Gazette – Issue 91, Supplement (A) on April 19, 2023 12
| Financial Position Items | Risk Weights |
|---|---|
| Financial investments in money market fund instruments | 0% |
| Regular financing (financing portfolio) | 100% |
| Cash financing customers for consumer purposes (Regular and provided with documents proving expenditure for the designated purpose) | 100% |
| Cash financing customers for consumer purposes (Regular and has not provided documents proving expenditure for the designated purpose) | 150% |
| Financial investments – Shares | 100% |
| Investments in affiliated or subsidiary companies | 100% |
| Intangible assets | 100% |
| Customers (outstanding balances) – Delayed more than 30 days – 90 days | 150% |
| Net irregular financing (defaulted for more than 90 days after deducting specific provisions) | 150% |
| Cash financing customers for consumer purposes (Irregular – delayed more than 30 days) | 200% |
| Deferred tax assets | 150% |
| Net fixed assets (after depreciation) | 100% |
| Other assets | 100% |
(Article Two) This Decision shall be published in the Egyptian Gazette and on the Authority’s website, and shall take effect from the day following its issuance date.
Chairman of the Board of Directors General Authority for Financial Supervision Dr. Mohamed Farid Saleh