Region

Jurisdiction

Regulator

2019-01-01

Circular Letter No. 14 for the Year 2019

The Financial Regulatory Authority of Egypt issued Circular Letter No. 143/B to establish accreditation criteria for additional entities permitted to cover credit risks for financing granted by licensed leasing and factoring companies. The directive mandates that qualifying risk-covering entities must operate under the Authority's supervision or be listed in Board Decision No. 53 of 2018. Furthermore, it requires that the value of balances covered by these entities be explicitly excluded from the capital base when calculating the financial solvency standards of the leasing and factoring firms.

Egypt

Financial Regulatory Authority Egypt

Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

Circular Letter No. 143/B dated 2019/11/26
Regarding the Criteria for Accrediting Additional Entities to Cover Credit Risks of Financing Provided by Factoring and Leasing Companies

Deputy Chairman of the Authority

The Authority's Board of Directors issued Decision No. 191 regarding the financial solvency standards for companies licensed to conduct leasing activities, and Decision No. 192 regarding the financial solvency standards for companies licensed to conduct factoring activities.

In the context of applying the provisions of Articles (2), (3), and (6) of the aforementioned decisions, which stipulate the possibility of excluding financings whose risks are covered by banks, factoring correspondents, venture capital companies, credit risk coverage entities, non-payment risk insurance entities, or through any other guarantees accepted by the Authority, when calculating the company's financial solvency standards.

In order to activate the provisions of the aforementioned decisions, specifically regarding other entities accepted by the Authority, the following entities are added to those permitted to cover the risks of financings granted by leasing and factoring companies, in accordance with the following provisions:

The entity covering the risk must be among the companies conducting activities subject to the Authority's supervision or among the financial institutions stipulated in the Authority's Board of Directors Decision No. 53 of 2018.
In the event that the entity covering the risk is among the companies subject to the Authority's supervision, the value of the balances it covers shall be excluded from the capital base when calculating the company's financial solvency standards.

Deputy Chairman of the Authority's Board of Directors
Advisor Rida Abdul Mu'ti

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