Regulatory Alerts2019-01-01
Financial Regulatory Authority Board Decision No. 15 of 2019 Amending Microfinance Regulations for Companies and Civil Institutions
The Financial Regulatory Authority (FRA) issued Board Decision No. 15 of 2019 to amend microfinance regulations for licensed companies, associations, and civil institutions. The decision mandates that microfinance providers must secure group insurance covering death and total permanent disability for clients, with coverage equal to the outstanding loan balance, while explicitly prohibiting the collection of any additional fees or commissions for this coverage. Furthermore, providers may require insurance on financed projects or assets but cannot force clients to use a specific insurer, with the decision taking effect the day after its publication in the Egyptian Gazette.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Decision of the Board of Directors of the Financial Regulatory Authority
No. (15) of 2019 dated 2019/7/7
Amending Decision No. (173) of 2014 regarding rules and regulations for companies conducting microfinance activities
and Decision No. (31) of 2015 regarding rules and standards for conducting microfinance activities by associations and civil society institutions
Board of Directors of the Financial Regulatory Authority
After reviewing Law No. 10 of 1981 issuing the Law on Supervision and Regulation of Insurance in Egypt and its Executive Regulations and amendments,
and Law No. 10 of 2009 concerning the regulation of supervision over non-banking financial markets and instruments,
and Presidential Decree No. 197 of 2009 issuing the Statute of the Financial Regulatory Authority,
and Decision of the Board of Directors of the Authority No. (173) of 2014 regarding rules and regulations for companies conducting microfinance activities
and Decision of the Board of Directors of the Authority No. (31) of 2015 regarding rules and standards for conducting microfinance activities by associations and civil society institutions
and the approval of the Board of Directors at its meeting held on 2019/7/7
Has Decided
(Article One)
The following text shall replace Article (24) of the two Board Decisions referred to above:
(Associations of categories (A) and (B) / Institutions / Companies shall be obligated to provide insurance coverage for their microfinance clients against death and total permanent disability through a group insurance contract with one of the licensed insurance companies, and the insurance amount shall be equal to the outstanding loan balance owed by the client.
Microfinance providers are prohibited from obtaining any financial consideration, whether by receiving commissions, imposing new fees, or by any other means, in exchange for the insurance coverage mentioned above in this Article, other than the insurance premium.
Furthermore, the Association / Institution / Company may require insurance coverage for the project or financed assets, as applicable, provided that the client is not compelled to deal with a specific insurance company.)
(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 publication in the Egyptian Gazette.
Chairman of the Board of Directors
Dr. Mohamed Omran
Financial Regulatory Authority
Office of the Chairman
Smart Village, Building No. B-136, Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax: +202 35370036
info@fra.gov.eg
Smart Village, Building no. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036
www.FRA.gov.eg
Smart Village, Building No. B-136, Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax: +202 35370036
info@fra.gov.eg
Smart Village, Building no. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036
www.FRA.gov.eg