Dr. Omran: Board of Trustees of Microfinance Unit sets the rules for NGOs and civil associations to practice microfinance activities
The Board of Trustees of Microfinance Unit holds a meeting with NGOs and civil associations -after its re-formation – headed by Dr. Mohammed Omran – FRA’s Chairman to review the most important amendments to the law regulating financing of medium, small and micro enterprises after the approval of the Egyptian Parliament on them – late last August – in preparation for the promulgation of the law by the President of the Republic.
FRA’s Chairman explains that these amendments will add new terms of reference for Micro-finance Unit starting with setting conditions for obtaining a license to engage in financing of medium and small enterprises.
Besides , setting the rules and standards necessary for NGOs and civil associations to engage in financing of medium and small enterprises and managing the risks associated with it.
Dr. Omran revealed that the meeting witnessed a review of microfinance indicators at the end of the second quarter of this year, as the number of beneficiaries from the activity reached about 3.1 million with financing portfolio of more than 17.2 billion EGP by the end of the second quarter of 2020. Meanwhile , by the end of the same quarter of 2019 , the number of beneficiaries was 2.9 million with financing portfolio of 13.8 billion EGP . In this respect, indicators have shown stability in microfinance activity despite the economic effects arising from the emerging corona virus pandemic. Also, the indicators of the second quarter of this year compared to the same period in 2019 recorded a rate of change in the number of beneficiaries of 5.8% and a growth in financing portfolio with a change rate of 24.9%.
FRA ‘s Chairman added that the statistics prepared by Microfinance Unit showed that microfinance companies maintained their leadership in the market shares of the activity, as they had seized a market share of 53.96% of microfinance portfolios compared to a market share of 50.49% at the end of the second quarter of 2019 . On the other hand , the market share of NGOs and institutions ( class A) declined to 39.24% at the end of the second quarter of 2020 instead of 41.51% at the end of the second quarter of 2019. And at a lesser pace, the market share of associations and institutions (Class B) decline to 3% at the end of the second quarter of 2020 after it had acquired a market share of 4.83% at the end of the same period of 2019.
In contrast, the market share of NGOs and institutions ( class C) has grown, bringing its market share to 3.8% at the end of the second quarter of 2020 compared to a market share of 3.17% at the end of the second quarter of 2019.
Moreover, the statistics confirmed the continued outperformance of females in microfinance activity to record 63.7% of the total beneficiaries whereas males rate reached 36.3% by the end of the second quarter of the current year 2020. On the other hand , by the end of the second quarter of 2019 females percentage reached 65% and males percentage was 34.2%.
In addition, the Unit’s Board of Trustees is concerned with studying ways to develop microfinance activity, following up on the unit’s performance , setting conditions for obtaining a license to practice microfinance activity. That is besides approving the necessary rules and standards to practice the activity, approving inspection and oversight rules and referring them to FRA’s BOD to consider its issuance.
Previously, the Authority’s Board of Directors issued decision No. 155 of 2019 to form the Board of Trustees of Microfinance Unit, it included May Abul Naga, a representative of Central Bank of Egypt , Mohammed Saeed Mustafa, representative of the Ministry of Social Solidarity, Nevin Ali Badr Al-Din, representative of the Egyptian Micro, Small and Medium Enterprises Development Agency (MSMEDA). In addition to , Medhat Ayad Khalil and Hala Fawzi Abu Al-Saad – two leaders of NGOs and civil institutions operating in microfinance , Hassan Farid, an expert and finally three representatives from the Authority nominated by its Chairman .