EGYPT Trends and Developments Contributed by: Dina Kamel, Helal El Hossary, Farida Tawfik and Ahmed Ammar, Zaki Hashem
In addition to the PDPL, entities offering NBFS regu - lated by the FRA are subject to FRA Decree Nos 139 and 140 of 2023, which govern the confidentiality of personal data as well as digital identity, digital con - tracts, digital registries, information systems, protec - tion and cybersecurity measures, and the compliance requirements necessary for the use of financial tech - nology in carrying out non-banking financial services activities. Cybercrimes law It is worth noting that the regulatory rules applicable to banking and non-banking financial services include Law No 175 of 2018 on the Combat of Information Technology Crimes, and the CBE and FRA have both issued many regulations on cybersecurity applicable to various banking and NBFS services to ensure the identity of the customer and the protection of each customer’s personal and transactional data. Such regulations often require strict certification processes to be undertaken by the licensed entities, and such certifications have to be upheld constantly. Non-com - pliance with such requirements is considered a viola - tion of the relevant licence. Trends The most recent regulations for NBFS As part of its strategy to enhance financial inclusion, expand the beneficiary base of non-banking financial activities and improve their efficiency, reduce the costs of accessing these services and strengthen oversight of the NBFS market, the FRA issued Decree No 184 of 2024, which suspended the incorporation and licens - ing of microfinance and consumer finance companies intending to operate these activities traditionally for a renewable period of one year starting from 11 October 2024. In 2025, the FRA renewed this suspension for an additional one-year period. This decree exempts companies or entities that wish to conduct microfinance and consumer finance activi - ties through fintech solutions, in accordance with the provisions of the FinTech Law, from this incorporation and licensing freeze. However, on 24 February 2026, the FRA issued Decree No 43, suspending the acceptance of new applica - tions for the incorporation and licensing of consumer
finance companies under the FinTech Law for a period of one year, effective from 25 February 2026. Alongside FRA Decree No 184 of 2024, this measure suspends all new applications for consumer finance companies, whether operating through traditional channels or financial technology platforms. The decree was issued to strengthen the FRA’s oversight of consumer finance activities and ensure compliance with anti-money laundering and counter- terrorism financing regulations, following the recent issuance of multiple licences over the past two years, bringing the total number of licensed consumer finance companies (whether traditional or fintech) to 28. The firm views this decision as a proactive measure by the FRA to preserve the economic and strategic value of consumer finance in Egypt, particularly considering the current market landscape, which is increasingly saturated with licensed consumer finance providers. By temporarily pausing the issuance of new licences, the FRA is likely seeking to maintain market stabil - ity, prevent excessive competition and ensure that the existing institutions can operate sustainably while safeguarding the quality and accessibility of consumer financing services. As part of the implementation of FinTech Law No 5 of 2022, the FRA has issued Decree Nos 139, 140 and 141 of 2023, forming a comprehensive regula - tory framework applicable to entities seeking to obtain fintech licences. The aforementioned regulations regarding digital identity, digital contracts and digital record-keeping collectively form the legal backbone of non-bank financial services using fintech. The FRA has formally recognised the legal validity and regulatory accept - ability of digital onboarding mechanisms, including remote customer identification and electronic know- your-customer (e-KYC) procedures. These rules allow financial institutions to verify a customer’s identity using electronic means such as biometric data, official digital databases and secure verification technologies, without requiring the customer’s physical presence.
236 CHAMBERS.COM
Powered by FlippingBook