General Authority for Financial Supervision Board Decision No. 9 of 2018 Amending Decision No. 173 of 2014 Regarding Microfinance Mobile Payment Regulations

General Authority for Financial Supervision
Board of Directors Decision No. 9 of 2018
Dated 27/3/2018

Amending Certain Provisions of Board Decision No. 173 of 2014 Regarding Rules and Regulations for Companies Conducting Microfinance Activities

The Board of Directors of the General Authority for Financial Supervision Having reviewed the Companies Law No. 159 of 1981 on Joint Stock Companies, Commandite Companies by Shares, Limited Liability Companies, and Single-Member Companies; And Law No. 10 of 2009 regarding the regulation of supervision over non-Egyptian markets and financial instruments; And Law No. 141 of 2014 regulating the microfinance activity; And Presidential Decree No. 192 of 2009 issuing the Statute of the General Authority for Financial Supervision; And Board Decision No. 173 of 2014 regarding rules and regulations for companies conducting microfinance activities; And the approval of the Authority's Board of Directors in its session held on 27/3/2018;

Decided:
(Article One)
Two new articles, numbered (28) and (28 bis), are added to the aforementioned Board Decision No. 173 of 2014, with the following text:
Article 28 – Mobile Payment Systems Service Regulations: Companies shall be entitled to benefit – upon obtaining the Authority's approval – from mobile payment systems services in granting financing and collection activities related to the microfinance sector.

Companies wishing to obtain the Authority's approval as a provider or user of mobile payment systems services for granting financing and collection activities related to the sector shall submit an application to the Authority according to the form prepared for this purpose, accompanied by the following documents:

1. A copy of the contract concluded between the company wishing to obtain the Authority's approval as a service provider and a bank subject to the supervision and oversight of the Central Bank of Egypt, in case the company wishes to provide the service independently (sole agent), or a copy of the contract concluded between the company and a licensed mobile network operator in the Arab Republic of Egypt and a bank subject to the supervision and oversight of the Central Bank of Egypt, in case the company provides this service in partnership with a mobile network operator (joint agent), provided that this contract regulates the relationship between its parties, particularly regarding customer service for the microfinance activity.
   As for companies wishing to obtain the Authority's approval as a user of the service, they shall be obligated to submit a copy of the contract concluded between them and a bank subject to the supervision and oversight of the Central Bank of Egypt, or between them and a licensed mobile network operator in the Arab Republic of Egypt, as applicable, as well as a copy of the Central Bank of Egypt's approval for the mobile network operator regarding the provision of such services, provided that this contract regulates the relationship between its parties, particularly regarding customer service for the microfinance activity.
2. A copy of simplified awareness and guidance materials regarding the targeted services to be provided to microfinance customers, clarifying the method of use and responding to inquiries, and amending them in accordance with the Authority's observations – if any.
3. A commitment to obtain prior consent from customers regarding the use of mobile payment systems services for the microfinance activity in disbursement and repayment processes, or either of them.
4. Proof of payment of the prescribed examination and study service fees.

The Authority 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 days from the date of submission of the required documents.
Approval shall be issued for companies wishing to obtain the Authority's approval as a provider or user of mobile payment systems services after verifying their submission of periodic regulatory reports and payment of the development fee and applicable supervision and oversight fees. Approval for companies wishing to obtain the Authority's approval as a service provider shall additionally require the following:
1. The company's commitment to submit the required annual and periodic financial statements on time, accompanied by an audit report from an auditor registered with the Authority and registered as an auditor for the microfinance activity.
2. Compliance with regulatory observations resulting from field inspections or desk reviews (if any).
Article 28 (bis) – Regulations for the Use of Mobile Payment Systems in Granting Financing and Collection: Companies holding the Authority's approval as a provider or user of mobile payment systems services in the microfinance activity shall comply with the following regulations:
1. Obtaining prior consent from each microfinance customer when using mobile payment systems services in disbursement and repayment processes, or either of them, as well as proof of their awareness of all rights and obligations and how to file complaints regarding them, by promoting an independent consent form for this purpose according to the guideline form issued by the Authority, with the customer's consent and proof of their receipt of a copy of the guidance instructions for using mobile payment systems services stored in the customer's file.
2. Notifying the Authority of any amendments to the contract concluded with the bank or mobile network operator within a maximum of one week from the date of occurrence.
3. Retaining system service reports as issued by the reporting system of the bank or the licensed mobile network operator in the Arab Republic of Egypt participating in various mobile transactions or payment orders, in a secure manner (electronic or paper) according to the time period specified in the materials organizing the customer file, for a period of one year from the date of the last transaction, and in case of a dispute regarding the financed amount being repaid, they shall be retained until the dispute is resolved.
4. Submitting the attached periodic report form regarding the use of mobile payment systems services on a quarterly basis.

(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