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Micro-finance is offering finance for economic productivity, service, and commercial purposes with the value set by FRA’s Board of Directors. Microfinance is encouraging the contribution of low-income groups in the economy. In this respect, granting different means of finance for individuals and owners of micro-enterprises will reduce unemployment and will improve the incomes of the poorest families. Besides, it will increase investments and contribute in the national economy.

According to experiences related to microfinance in various countries, it is noted that microfinance depends on personal and direct contact between the financier and the client. Also, it depends on providing funds or limited value services. Accordingly, this requires the existence of organized entities to communicate with individuals, entities and microenterprises.

 On 13 November, Presidential Decree no.141 of 2014 on regulating microfinance activity was published in the Egyptian Gazette (issue no. 46) .Then, the Authority begins to prepare related executive decisions and rules necessary to regulate the activity and determine licensing requirements for the companies and NGOs.

A  special unit subjected to FRA shall be established to supervise the activity of microfinance in  civil  associations and NGOs which granted - by Law-  six months to adjust their positions.  The Unit’s Board of Trustees will include number of experts in the field, associations’ chairmen, representatives of relevant ministries , the Central Bank,  Social Fund for Development. The law has allowed the civil associations and institutions to contribute in the establishment of companies practicing  microfinance.
Upon preparing the law, there was no text that stipulated the existence of Executive Regulations for microfinance and the Law was referred FRA’s Board of Directors to issue the necessary detailed decisions. These decisions   includes the following : identifying areas of microfinance , its  value, licensing requirements for companies to practice the activity , capital adequacy  standards and rules of supervision and control. Also,  FRA’s BOD  shall  identify  the basis set for calculating allocations in light of  credential , financial and operational risks  light ,disclosure rules and the data to be published. Noted that the return on debt (ROD) paid by the company , other means of finance and allocations are deductible costs upon determining the net taxable revenue, that is according to the criteria set by FRA and what is approved by the company's auditor. Micro-credit Loans and other forms of microfinance are exempted from taxes, fees and stamp duty.

The Law prohibits companies and associations from receiving any deposits, as these companies are working under the supervision of the Central Bank of Egypt. Microfinance is not restricted on lending only but it could include forms of   financial leasing, Murabaha, trading and so forth.

In the provisions of this law, microfinance means is offering finance  for economic productivity or service or commercial purposes  with the value determined by FRA and it shall not exceed one hundred thousand pounds. The said value can be increased to 5% per year pursuant to a decree issued by the Prime Minister on the proposal of the Board of Directors and in accordance with the economic conditions and the requirements.

The Prime Minister shall be addressed to form grievances’ committees to review companies and associations ‘grievances against the administrative decisions pursuant to the provisions of the law. A decision is to be issued by the Minister of Justice to grant the status of judicial police to FRA’s regulators with regard to companies, civil associations and institutions.


The law aims at:

1. Regulating microfinance in a way that protects the interests of the concerned parties.  Supervising the microfinance companies to ensure efficiency, transparency and risk management.
2.  Developing microfinance professional standards for the advancement of its employees to be consistent with the applied international standards.
3. Attracting those wishing to provide microfinance, namely the concerned financial institutions which will grant financing for micro enterprises, and accordingly this will increase the competition.
4. Expanding financial services to microenterprises and targeted groups of clients to reduce financing gap in this sector.
5. Encouraging microfinance companies and regulating the establishment of these companies and granting licenses besides providing financing resources.