Non - Banking Financial

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In 2018, FRA launched a draft law that combines financial leasing and factoring activities into one law. Both the parliament and the Cabinet approved the draft law. The new Law contributes to enhancing financial inclusion and ensuring access to the non-banking financing instruments to the society segments that currently do not benefit from a host of financial services.

The said Law allows companies, associations, and NGOs licensed to practice microfinance activities - in accordance with the provisions of Law no. 141 of 2014 - to provide financial leasing services in light of the regulations determined by FRA’s BoD. The Law aims at supporting and developing entities engaged in microfinance. In addition to expanding the range of non-banking financial services which are provided by using the available database at these entities to reach a larger number of those who operate in small craft industries, which is an additional incentive to small complementary industries and opens up wider horizons to create new job opportunities.

Factoring is one of the pillars that provides working capital and accelerates its cycle, particularly in allocating short-term financial rights.
The total number of companies registered at the Authority and engaged in financial leasing activity reached 227 companies by the end of the year. In addition, the total amount of finance granted by these companies amounted to 55.9 billion EGP by the end of the year compared to 41.7 billion EGP in 2018 with a growth rate of 34.1%.  It is worth mentioning that 73% of the said amount directed to finance the acquisition of land and real estate required for productive projects, whereas the remaining amount directed to finance machinery, equipment and production lines. The results show that the value of these contracts is three times more than the value in 2015 of 19.4 billion EGP, which reflects the development of the activity and the dependence of companies on it as a mechanism for financing assets purchasing.
Factoring market in Egypt is a promising market. The value of factored securities has almost doubled over the past five years, rising from 4.5 billion EGP in 2015 to 10.6 billion EGP in 2019.