EGYPT Law and Practice Contributed by: Dina Kamel, Helal El Hossary, Omar Fouda and Kareem Hashem, Zaki Hashem
• factoring (including digital factoring) – providing SME liquidity by purchasing or financing invoices and receivables (increasingly end-to-end digital for onboarding, verification and disbursement); • insurance (including digital insurance distribution/ intermediation) – digital sale, distribution and ser - vicing of policies (often micro- or embedded insur - ance), with claims workflows moving online; • insurance brokerage – intermediation between clients and insurers, providing advisory, place - ment and policy management services (brokers may operate digitally, offering online comparisons, quotes and client servicing, while facilitating claims processing and risk assessment); and • financial consultancy/advisory – licensed advisory services delivered through digital channels, cover - ing investment, corporate finance and financial structuring support. Impact of the Fintech Law: Regulatory Direction Egypt’s fintech regulations are moving towards “licence-first digitisation”, clearer activity boundaries and more formal and digital governance, especially where customer funds, credit decisioning or investor- facing products are involved. Practically, most growth models now combine a regulated licence (or partner - ship with a licensee) with technology-led distribution, data-driven underwriting or risk controls and deeper integration into merchant, employer and government payment flows. This clearer and more transparent regulatory environment is likely to give new investors more comfort when investing into up-and-coming fin - tech companies – and is also likely to enhance appe - tite for investment into the legacy players as they con - tinue to streamline, scale and license new activities. 2.2 Regulatory Regime Egypt’s fintech regulation is split by regulatory perim - eter: the CBE for banking and payments and the FRA for NBFS. In several models, there exists a dual-com - pliance component; for example, an FRA-licensed finance product that relies on a bank partner or PSP for collections, cards or wallet rails. CBE Regulation The CBE regulates payments (including internet pay - ments), facilitators/aggregators, government collec -
tions and digital banking. The following are of rele - vance: • primary law – Central Bank and Banking Law No 194 of 2020 (the “Central Bank and Banking System Law”), including the payment systems and payment services framework (PSOs/PSPs) and CBE supervisory powers; • key CBE instruments include the 2025 CBE deci - sion on licensing and registering PSOs and PSPs, and the CBE’s electronic banking and online bank - ing rules; and • telecom oversight (where applicable) – Law No 10 of 2003 (the “Telecommunications Law”) and the National Telecommunication Regulatory Authority (NTRA) licensing terms are applicable where the model uses telco infrastructure, mobile networks, connectivity or telco wallet distribution. FRA Regulation The FRA regulates NBFS (delivered non-digitally or digitally), consumer finance, SME finance, microfi - nance, nano-finance, insurance, reinsurance, insur - ance brokerage, reinsurance brokerage, factoring, financial consultancy and fintech enablement. • FRA mandate: Law No 95 of 1992 and its Execu - tive Regulations (the “Capital Markets Law”), Law No 10 of 2009 and its Executive Regulations, and FRA decrees regarding governance and licensing set baseline expectations for supervised entities (notably licensing and ongoing requirements, gov - ernance and capital adequacy). • Non-banking financial technology: the Law Regu - lating and Developing the Use of Financial Tech - nology in Non‑Banking Financial Activities and the FRA’s implementing framework make “digital licensing” workable in practice (FRA Decree Nos 139, 140 and 141 of 2023), especially in relation to: (a) digital identity, digital contracting and compli - ance requirements for NBFS delivered through fintech; (b) outsourcing registry and third-party service provider governance; (c) tech infrastructure and cybersecurity require - ments for supervised entities; and (d) sandbox and specific digital programme rules – eg, for robo-advisors, digital insurance bro -
219 CHAMBERS.COM
Powered by FlippingBook