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2020-01-01

General Authority for Financial Supervision Board Decision No. 101 of 2020 (Updated in 2022)

The General Authority for Financial Supervision Board issued Decision No. 101 of 2020, updated in 2023, to establish comprehensive financial adequacy criteria for consumer finance companies. The regulation mandates strict capital adequacy ratios, risk-weighted asset calculations, and defined thresholds for operational, concentration, and liquidity risks. Subsequent amendments by Board Decisions No. 161 (2022) and No. 82 (2023) refined Article 1, replaced the risk-weighted assets calculation table, and standardized disclosure and periodic reporting requirements.

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1 Board Decision No. (101) of 2020 dated 23/6/2020 Regarding the Financial Adequacy Criteria for Companies Operating in Consumer Finance Activities Latest amendment dated 12/4/2023

  1. Board of the General Authority for Financial Supervision has decided: (Article 1) (Article 2) (Article 3) (Article 4)

  2. The decision was amended by Board Decision No. 161 dated 16/11/2022 and Board Decision No. 82 dated 12/4/2023.

  3. Financial Adequacy Criteria for Companies Operating in Consumer Finance Activities Article (1)

Capital Adequacy Ratio: Credit Risks: First

  1. Article 1 was amended by Board Decision No. 161 dated 16/11/2022. *The Capital Adequacy Ratio (“CAR”) aims to measure the company's ability to face risks associated with its activities, primarily credit and operational risks.

Second: Risk-Weighted Assets (Denominator of the Ratio):

  1. Financial Statement Items: Risk Weights

  2. The table for calculating risk-weighted assets in Item (Second: Risk-Weighted Assets) of Article (1) was replaced by Board Decision No. 82 dated 12/4/2023.

Third: Operational Risks 4. Article (2) Concentration Risks Article (3) Financial Leverage Article (4) Balance between Assets and Liabilities

  1. Liquid assets refer to cash, bank deposits, treasury bills, treasury bonds, and money market fund instruments.
  2. Net outgoing cash flows refer to the value of outgoing cash flows minus incoming cash flows.

Article (5) Liquidity Ratio Article (6) Amortization/Provisions Calculation for Doubtful Collectible Finances and Bad Debt Write-offs

Level of Payment Delay | Classification | Provision Ratio | Notes Marginal Returns/Interest Bad Debt Write-off Level of Payment Delay | Classification | Provision Ratio | Notes

Article (7) Controls for Determining Financing Ratios • • • • •

Article (8) Disclosure Criteria

Article (9) Periodic Reports

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