Decision of the Board of Directors of the Authority No. (2) of 2015

---

The Official Gazette - Issue 25, Part (A) on February 2, 2015

Financial Regulatory Authority
Decision of the Board of Directors of the Authority No. 2 of 2015 dated 12/01/2015 on the Statutes of the Egyptian Microfinance Union Board of Directors of the Financial Regulatory Authority Having reviewed Law No. 10 of 2009 concerning the regulation of supervision over markets and non-banking financial instruments; and the Presidential Decree issuing Law No. 141 of 2014 regulating the microfinance activity; and Presidential Decree No. 192 of 2009 issuing the Statutes of the Financial Regulatory Authority; and the approval of the Authority's Board of Directors in its session No. (1) held on 12/01/2015; Decided:
(Article 1)
The provisions of the Statutes of the Egyptian Microfinance Union attached to this Decision shall apply.
(Article 2)
This Decision shall be published in the Official Gazette along with the attached Statutes, and shall take effect from the day following its publication date. Chairman of the Board of Directors Sherif Samy

The Official Gazette - Issue 25, Part (A) on February 2, 2015

Statutes of the Egyptian Microfinance Union
(Chapter One)
Establishment, Headquarters, and Objectives of the Union (Article 1) A union for entities engaged in the microfinance activity shall be established in the Arab Republic of Egypt, to be named the "Egyptian Microfinance Union", possessing independent legal personality, and not aiming for profit. The Union's headquarters shall be located in Cairo or Giza Governorate, and it may establish branches or offices in other governorates of the Arab Republic of Egypt. Branches and offices shall be considered subordinate bodies of the Union, and the Union's Board of Directors shall determine the jurisdiction of each in its establishment decisions within the framework of the Union's objectives. (Article 2) The Union aims to achieve the following objectives:

1. Developing the microfinance activity and consolidating its concepts and practices.
2. Raising awareness of the microfinance activity and adopting initiatives supporting it.
3. Providing recommendations regarding legislation governing the practice of the activity or related to the work of the Union's regulatory authorities.
4. Developing the skills of microfinance sector workers through education and training, and working to enhance the efficiency of entities engaged in microfinance.
5. Coordinating among Union members without violating the provisions of Law No. 3 of 2005 on protecting competition and preventing monopolistic practices, and striving to resolve disputes among members.
6. Strengthening cooperation and coordination between the Union, the Financial Regulatory Authority, and relevant parties to serve the microfinance market and the national economy.
7. Supporting and encouraging research and studies aimed at developing the microfinance system in Egypt, increasing its efficiency, and expanding the beneficiary segment.
8. Identifying best experiences and practices in microfinance and cooperating with relevant local, regional, and international organizations and unions.

The Official Gazette - Issue 25, Part (A) on February 2, 2015

(Article 3)
In pursuing its objectives, the Union may use all necessary means and resources to support and develop the microfinance activity and safeguard members' interests, including in particular:

1. Proposing technical guidelines for managing microfinance operations.
2. Defending the interests of entities engaged in microfinance.
3. Providing opinions on draft laws and regulations submitted to it.
4. Preparing or providing training courses, qualification programs, and skills development for microfinance workers, and organizing knowledge and experience exchange with relevant parties domestically and internationally.
5. Managing a microfinance activity database and periodically publishing statistics and analyses.
6. Facilitating the exchange of information and data related to microfinance among its members and with credit reporting agencies.
7. Adopting awareness initiatives and publishing materials and other content serving the Union's objectives, whether electronically or in audio/visual formats.
8. Hosting and sponsoring seminars, conferences, and other events aimed at developing the microfinance activity and training the workforce required by the market.
9. Communicating with media outlets and all organizations to highlight the role and importance of microfinance in supporting the national economy.
10. Adopting a code of professional ethics.
    The Union may use all available means or resources to activate efforts aimed at achieving its objectives.

The Official Gazette - Issue 25, Part (A) on February 2, 2015

(Chapter Two)
Membership in the Union
(Article 4)
Membership in the Union shall be open to any company, association, or non-governmental organization licensed by the Financial Regulatory Authority to engage in microfinance activity under Law No. 141 of 2014 and its implementing decisions, subject to the Union's approval within fifteen days of a copy of the Authority's licensing approval and the names of its board of directors members, along with payment of the prescribed registration fee determined by a General Assembly decision. The following entities may also apply for Union membership:

1. The Social Development Fund.
2. Banks supervised by the Central Bank of Egypt that engage in microfinance activity.
3. Credit guarantee companies and other parties concerned with the activity, according to regulations approved by the General Assembly.
   Balance Among Member Groups in the Union
   (Article 5)
   For the purpose of balancing member categories in the Union's General Assembly meetings, members shall be divided into three groups as follows:
   Group (A): Comprises member associations and NGOs whose microfinance portfolio does not exceed 10 million EGP at the end of the preceding year.
   Group (B): Comprises member associations and NGOs other than those in Group (A).
   Group (C): Comprises members other than associations and NGOs.
   If the number of members in any group is less than 25% of the total number of members across all groups, the voting weight of each attending member from that minority group shall be weighted by a factor equal to one-quarter of the General Assembly's votes - after weighting - for that group as a whole.

The Official Gazette - Issue 25, Part (A) on February 2, 2015

(Chapter Three)
Rights and Obligations of Members
(Article 6)
Union members have the right to benefit from all services provided by the Union in various fields, including in particular:

1. Obtaining the Union's annual report, financial statements, auditor's report, and reviewing decisions of the Union's Board of Directors and General Assembly, as well as minutes of other Union bodies' meetings.
2. Nominating representatives to various Union bodies according to the rules set forth in these Statutes.
3. Benefiting from the Union's activities in developing the skills of its workforce.
4. Receiving technical support and obtaining data, statistics, reports, and studies issued by the Union. Submitting proposals to Union bodies regarding activity development and addressing obstacles and challenges it faces.
   (Article 7)
   Without prejudice to the provisions of Law No. 141 of 2014 and its implementing decisions, Union members are obligated to comply with the provisions of these Statutes and decisions issued by the Union, including in particular:
5. Paying the prescribed membership registration fee according to the amount determined by the General Assembly decision.
6. Paying the annual subscription fee as determined by the General Assembly.
7. Paying fees for training programs, research, and other related services, as approved by the Union's Board of Directors.
8. Adhering to the provisions of these Statutes and decisions issued by the Union.
9. Refraining from any act that may cause financial or reputational harm to the Union.

The Official Gazette - Issue 25, Part (A) on February 2, 2015

(Chapter Four)
Financial Year - Union Resources and Financial Expenditures (Article 8) The Union's financial year shall begin on January 1 and end on December 31 of each year. The first financial year shall begin from its establishment date until the end of December of the following year. (Article 9) Union resources shall consist of:

1. Union membership fees.
2. Annual subscriptions paid by members.
3. Fees for training, research, and other technical support services.
4. Donations and grants provided to the Union and approved by its Board of Directors.
5. Returns on the investment of Union funds.
6. Other resources approved by the Union's Board of Directors.
   In case the aforementioned resources are insufficient, members are obligated to cover the annual deficit proportionally to their subscription rates, as determined by the Union's General Assembly. (Article 10) Union resources shall be used to finance its objectives, with expenditures governed by the Union's financial regulations and rules established by the Board of Directors. Union funds shall be deposited in the Union's name and on its behalf in a bank in the Arab Republic of Egypt supervised by the Central Bank of Egypt.

The Official Gazette - Issue 25, Part (A) on February 2, 2015

(Chapter Five)
Union Bodies
(Article 11)
The Union shall exercise its competencies through the following bodies:

1. The General Assembly.
2. The Union Board of Directors - Union Chairman.
3. The Administrative Body.
   The Union may, as appropriate, establish additional bodies to assist it in exercising its competencies, subject to the approval of the Financial Regulatory Authority. First - The General Assembly (Article 12) The General Assembly is the supreme authority of the Union. Representatives of members who have fulfilled their financial obligations due according to the Union's Statutes up to the assembly's convening shall attend its meetings. They must be chairpersons or hold a supervisory position at a level determined by the head of the member entity. The Union Board Chairman shall preside over the General Assembly, or his senior deputy in his absence, followed by the next person chosen by the Board members in their absence. A Union member may authorize another member to attend the General Assembly meeting and vote on their behalf, provided the proxy represents only one member. A Union employee shall serve as the General Assembly Secretary, without a voting right. The Financial Regulatory Authority may dispatch a representative to attend any General Assembly meeting of the Union. (Article 13) The General Assembly shall convene its meetings upon:
4. An invitation from the Union Board of Directors.
5. A request submitted by 25% of the General Assembly members.
6. A request from the Chairman of the Financial Regulatory Authority.
   The General Assembly meeting shall be valid with the attendance of at least half of the members. If a quorum is not met, the meeting shall be adjourned for a period not less than one hour and not exceeding ten days. The second meeting shall be valid in this case with the attendance of members constituting at least 20% of those entitled to attend. In case the Assembly cannot convene as above, the Chairman of the Financial Regulatory Authority may call the Assembly to convene, and the invitation shall be published in a newspaper at the Union's expense. The meeting shall be valid regardless of the number of attendees, and the Authority shall determine who shall preside over the General Assembly in this case. (Article 14) The Union's General Assembly shall have the following competencies:
7. Reviewing the annual report prepared by the Board of Directors on activities, approving the Statement of Financial Position, income and expenditure account, auditor's report, and reviewing the discharge of Board of Directors members.
8. Approving the Union's estimated budget.
9. Electing members of the Union Board of Directors according to the rules set forth in these Statutes.
10. Determining attendance and travel allowances paid to General Assembly and Board of Directors members.

---