Dr. Mohammed Omran – FRA’s Chairman announces that Connect Finance Co. – an Egyptian joint stock company – obtains the first license to practice consumer finance activity. He adds that the company is no longer subjected to the provisions of Law No. 159 of 1981 and now it is subjected to consumer Finance Law and FRA’s BOD decisions on regularization of the entities which practice the activity before the issuance of Consumer Finance Law. He points out that Article VI of the said Law gives these entities a period of six months to regularize their status starting from the date of applying the provisions of the Law.
FRA’s Chairman also adds that FRA’s BOD has issued decision no. 494 of 2020 on approving the second license for Aman Financial Services to be a consumer finance provider besides its main activities.
it is worth mentioning that Article 1 of the Consumer Finance Law defines consumer finance providers as producers or distributors of goods who are involved Consumer finance activity. The Law required consumer finance providers whose main activity is to distribute or sell the goods to obtain a license from the Authority and to be registered at FRA’s registry whenever their annual financing exceeds the limit set by the Board of Directors of the Authority, provided that it does not exceed 25 million pounds.
Dr. Omran confirms that putting finance consumer activity under FRA’s supervision will have many advantages at the level of national economy. He emphasizes that investments and operating rates will increase, competitiveness within the national economy will improve, leading to higher efficiency, lower prices and an increase in domestic demand. In addition to creating a sound and accurate database that helps the state adopt appropriate policies and allows investors to make investment decisions.
On the other hand, the biggest beneficiary of Consumer Finance Law and creating a real control over the consumer finance activity is the ordinary citizen (consumer) himself. Such Law will ensure that there are clear controls and sound professional rules that will be the base of calculating installments. Also, it provides a regulator who shall protect the consumer from harmful practices and receive any complaints from him.