Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

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Board of Directors Decision No. (4) of 2018

Dated 27/3/2018

Amending Certain Provisions of Board of Directors Decision No. (31) of 2015

Regarding the Rules and Standards for Practicing the Microfinance Activity for Associations and Civil Society Institutions

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Board of Directors of the Financial Regulatory Authority

Having reviewed the Law Regulating the Work of Associations and Other Institutions Operating in the Field of Civil Society Work, issued by Law No. (70) of 2017;

And Law No. (10) of 2009 Regulating Supervision over Non-Banking Financial Markets and Instruments;

And Law No. (141) of 2014 Regulating the Microfinance Activity;

And Presidential Decision No. (192) of 2009 Issuing the Basic Statute of the Financial Regulatory Authority;

And Board of Directors Decision No. (158) of 2014 Regarding Microfinance Fields and Values;

And Board of Directors Decision No. (31) of 2015 Regarding the Rules and Standards for Practicing the Microfinance Activity for Associations and Civil Society Institutions;

And the approval of the Board of Trustees of the Supervision Unit for the Microfinance Activity for Associations and Civil Society Institutions dated 5/11/2017;

And the approval of the Board of Directors in its session held on 27/3/2018:

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Decided:

(Article One)

Two new articles, numbered 29 bis and 29 bis (1), are added to the aforementioned Board of Directors Decision No. (31) of 2015, with the following text:

Article (29 bis): Electronic Payment Systems in Granting Financing and Collection:

Associations and civil society institutions may use electronic payment systems for granting financing and collection related to the microfinance activity through an electronic payment system service provider, subject to obtaining prior approval from the Authority.

Associations and civil society institutions wishing to obtain the Authority's approval to use electronic payment systems for granting financing and collection in the activity shall submit an application according to the form prepared for this purpose, provided that the following conditions are met:

1. The association or civil society institution's commitment to submitting periodic regulatory reports on time during the year preceding the application submission.

2. The Unit's approval of a copy of the contract signed with one of the electronic payment service providers governing the working relationship between them regarding customer service for the microfinance activity, as well as a copy of the approval from the Central Bank of Egypt for the service provider regarding offering that type of service.

3. The Unit's approval of a copy of simplified awareness and guidance materials regarding the targeted services provided in cooperation with electronic payment entities to microfinance activity clients, clarifying the usage method and responding to inquiries, and amending them to align with the Authority's observations (if any).

4. Commitment to obtain prior approval from the Unit regarding the use of electronic payment system services for the microfinance activity (disbursement and repayment or either one).

5. Payment of the prescribed fee for inspection and study services.

The Unit shall study and examine the application and verify its compliance with requirements, and a decision on the application shall be issued within a maximum of five working days from the date of its submission with all required documents.

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Article (29 bis (1)): Conditions for Using Electronic Payment Systems in Granting Financing and Collection:

Associations and civil society institutions that have obtained the Authority's approval to use electronic payment services in the microfinance activity shall comply with the following:

1. Obtaining prior consent from each microfinance activity client when using electronic payment system services (disbursement and repayment or either one) with them, as well as evidence of their awareness of all rights, obligations, and how to file complaints regarding them, by signing an independent consent form for this purpose according to the advisory form issued by the Authority, provided that the client's consent and evidence of their receipt of a copy of the advisory instructions for using electronic payment services are kept in the client's file.

2. Retaining reports related to electronic payment services according to the service provider's (electronic payment entity) reporting system regarding financial transactions executed for disbursement and collection, using a secure storage method (electronic or paper), in accordance with the time period specified in the materials governing the client file,

for a period of one year from the date of termination of the business relationship, and in case of a dispute regarding the financed amount subject to repayment, they shall be retained until the dispute is resolved.

3. Submitting the attached periodic report form regarding the use of services on a quarterly basis.

4. Notifying the Unit within a period not exceeding fifteen days of any amendment to the contract with the electronic payment entity.

The Unit may revoke the approval issued to the association or civil society institution to use electronic payment services in the microfinance activity in case of violation of any of the conditions for granting approval.

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(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.

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Chairman of the Board of Directors

Dr. Mohamed Omran

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Smart Village, Building No. B-136, Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax.: +202 35345350
info@fra.gov.eg

Smart Village, Building No. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036
www.FRA.gov.eg