Board of Trustees Decision No. (1) of 2015

Dated 25/05/2015

Regarding the conditions and requirements for licensing civil society associations and institutions to conduct microfinance activities in accordance with the provisions of Law No. (141) of 2014

Board of Trustees of the Microfinance Activity Supervision Unit for Civil Society Associations and Institutions

Having reviewed Law No. (10) of 2009 regulating the supervision of markets and non-banking financial instruments;
And Law No. (141) of 2014 regulating microfinance activities;
And Decision No. (158) of 2014 of the Board of Directors of the Financial Regulatory Authority regarding the determination of microfinance fields and values;
And Decision No. (159) of 2014 of the Board of Directors of the Financial Regulatory Authority regarding the bylaws of the Microfinance Activity Supervision Unit for Civil Society Associations and Institutions;
And Decision No. (160) of 2014 of the Board of Directors of the Financial Regulatory Authority regarding the formation of the Board of Trustees of the Microfinance Activity Supervision Unit for Civil Society Associations and Institutions;
And Decision No. (161) of 2014 of the Board of Directors of the Financial Regulatory Authority regarding the conditions for registration, continuation of registration, and deletion in the register of auditors for microfinance companies and civil society associations and institutions licensed to conduct this activity with the Authority;
And Decision No. (171) of 2014 of the Board of Directors of the Financial Regulatory Authority regarding the service fees for entities working in microfinance activities, amended by Board Decision No. (32) of 2015;
And Decision No. (31) of 2015 of the Board of Directors of the Financial Regulatory Authority regarding the rules and standards for conducting microfinance activities by civil society associations and institutions;
And Decision No. (1) of 2014 of the Board of Trustees regarding the conditions, rules, and procedures for regularizing the status of civil society associations and institutions conducting microfinance activities prior to the implementation of Law No. (141) of 2014;
And upon approval of the Board of Trustees of the Microfinance Activity Supervision Unit for Civil Society Associations and Institutions at its meeting held on 25/05/2015:

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Decided:

(Article One)

Definitions

Microfinance: Any financing for productive, service, or commercial economic purposes, taking into account the participation of financing organizers in the project activity either through effort or financing commensurate with the nature of the project, not exceeding one hundred thousand Egyptian pounds, all in accordance with Decision No. (158) of 2014 of the Board of Directors of the Financial Regulatory Authority.

The Unit: The Microfinance Activity Supervision Unit for Civil Society Associations and Institutions established in accordance with Law No. 141 of 2014, with its bylaws issued by Decision No. (159) of 2014 of the Board of Directors of the Financial Regulatory Authority.

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(Article Two)

General Licensing Conditions for Civil Society Associations and Institutions

Civil society associations and institutions must meet the following general conditions to obtain a license to conduct microfinance activities:

1. They must be licensed by the competent ministry implementing the Microfinance Law, and the bylaws of the association or institution must include conducting financing activities, providing loans, or economic development.

2. They must have one or more auditors, with the auditor of the association or institution from the fiscal year 2016 onwards being among those registered in the register and meeting the conditions stipulated in Board Decision No. (161) of 2014.

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(Article Three)

Licensing Requirements for Civil Society Associations and Institutions Holding Temporary Licenses

Civil society associations and institutions holding a temporary license to conduct microfinance activities in accordance with Board of Trustees Decision No. (1) of 2014 must submit a licensing application to the Unit on the form prepared by the Unit, signed by the legal representative of the association or institution, accompanied by a statement of amendments made to the data and documents submitted to obtain the temporary license, certified by the legal representative, and fulfill the requirements set forth in Appendix No. (1) attached to this Decision.

The aforementioned associations and institutions are also obligated to amend their bylaws to include conducting microfinance activities in accordance with the provisions of Law No. 141 of 2014, within a period not exceeding May 31, 2016.

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(Article Four)

Licensing Requirements for Civil Society Associations and Institutions Not Holding Temporary Licenses

Civil society associations and institutions wishing to commence microfinance activities in accordance with Law No. 141 of 2014 must comply with all requirements stipulated in Board Decision No. (31) of 2015 regarding the rules and standards for conducting microfinance activities by civil society associations and institutions.

These associations and institutions shall submit a licensing application on the form prepared by the Unit, accompanied by the following:

1. An extract of the establishment decision issued by the competent ministry implementing the Law on Associations and Institutions.

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(Article Five)

Submission and Examination of Licensing Applications

The licensing application file may be submitted through the branches of the Social Fund for Development to be delivered by the Fund to the Unit, in accordance with the system established by the Fund.

The Unit shall issue a receipt for the submitted documents and attachments to the licensing applicant, or a statement regarding any other documents required.

The Unit shall examine the licensing application to verify the fulfillment of the stipulated conditions and must rule on the application within a period not exceeding two weeks from the date of fulfilling the documents and other requirements necessary for granting the license.

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(Article Six)

This Decision shall be published in Al-Waqai' Al-Masriyya and on the website of the Financial Regulatory Authority, and shall take effect from the day following its issuance.

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Chairman of the Financial Regulatory Authority
Chairman of the Board of Trustees
Sherif Samy

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Appendix (1)

Requirements to be Fulfilled to Obtain a License for Civil Society Associations and Institutions Holding a Temporary License to Conduct Microfinance Activities in Accordance with Board of Trustees Decision No. (1) of 2014

Civil Society Associations and Institutions of Category (A) and Category (B):

According to the classification set forth in Article (4) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions

No.	Entity	Required Condition
1	Board of Directors	In accordance with Article (7) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
2	Audit and Risk Committee	In accordance with Article (8) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
3	Microfinance Activity Director and Senior Officials	In accordance with Article (10) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
4	Internal Audit Regulatory Unit	In accordance with Article (11) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
5	Risk Management Regulatory Unit	In accordance with Article (18) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
6	Internal Regulations for Microfinance Provision	In accordance with Article (14) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
7	Work Policies (approved by the Board of Directors)	In accordance with Article (15) and Article (18) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
8	Technical and IT Requirements	In accordance with Article (16) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions

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Civil Society Associations and Institutions of Category (C):

According to the classification set forth in Article (4) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions

No.	Entity	Required Condition
1	Board of Directors	In accordance with Article (7) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
2	Microfinance Activity Director	In accordance with Article (10) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
3	Internal Regulations for Microfinance Provision, including a Risk Management System	In accordance with Article (14) and Article (18) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions
4	Technical and IT Requirements	In accordance with Article (16) of the Rules and Standards for Conducting Microfinance Activities by Civil Society Associations and Institutions