EGYPT Law and Practice Contributed by: Ibrahim Shehata, Hesham Kamel, Mohamed Abed and Hamza Shehata, Shehata & Partners Law Firm
The CBE sets the following limits for mobile loans: • for individuals, loans are capped at EGP5,000; • Category (A) Companies, which must meet specific verification criteria and have mobile accounts with the bank, can access amounts up to EGP15,000, aligning with the AML regu - lations issued in March 2020; and • Category (B) Companies, encompass - ing micro-businesses and individuals like plumbers and electricians, can borrow up to EGP10,000 through mobile loans but they must be listed under specific economic activi - ties as defined by the CBE and have mobile accounts adhering to the AML regulations. The CBE governor retains the authority to amend those specified maximum limits as necessary. Non-Banking Fintech Sector The Non-Banking Fintech Law in Egypt expands its reach to consumer financing activities con - ducted through online platforms. Any entity offering such services requires a licence/permit from the FRA. The same also applies to offering microfinance activities, SME financing activities or nano-finance activities through online plat - forms; all of these activities require prior licens - ing by the FRA. 4.2 Underwriting Processes The CBE sets regulations for digital lending to protect both borrowers and lenders. These regulations require borrowers to understand and agree to the terms of their mobile loans, provide valid identification and have their cred - itworthiness and existing digital loans assessed before the loan is approved. This helps to ensure responsible lending practices and informed financial decisions in the digital era.
Egypt’s financial landscape is evolving with the use of alternative data for credit assessments. This allows banks to consider factors like bill payment behaviour when evaluating loan eli - gibility, potentially broadening access to credit for individuals without traditional credit scores. However, regulations require banks to implement robust risk management practices and testing procedures to ensure responsible lending and to mitigate potential risks associated with this innovative approach. 4.3 Sources of Funds for Fiat Currency Loans The legal framework concerning loan sources in Egypt varies depending on the lender itself. In this regard, the Banking Law applies to any legalities concerning the source of funds for any entities operating within the banking fintech services sector, which is governed by the CBE. The Non-Banking Fintech Law applies to non- banking fintech providers, and the FRA would be the relevant authority. 4.4 Syndication of Fiat Currency Loans Egypt’s financial sector relies heavily on loan syndication, where multiple banks co-operate to provide financing for large-scale projects or borrowers with significant loan requirements. This practice helps to distribute risks, mobilise resources and facilitate economic growth. In this regard, the syndication of loans is primarily regu - lated under the provisions of the Banking Law.
5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails
The CBE plays a crucial role in regulating pay - ment systems and services and the offering of payment services like online payments or money
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