Prime Minister Dr. Mostafa Madbouli reviewed the schedule set for implementing FRA’s comprehensive strategy for non-banking financial services (2018-2022). As well as FRA’s keenness to apply digital transformation, adopt policies to achieve financial inclusion and sustainable development and build efficient risk management system. Dr. Mohammed Omran- FRA’s Chairman introduced a “visible” presentation on FRA’s most important achievements achieved in 2018 and the changes witnessed by the non-banking financial services sector during the past 12 months. This period which witnessed a comprehensive review of all procedures and legislative frameworks related to non-banking financial markets in order to create non-banking financial system that is inclusive and a catalyst for economic growth.
FRA’s Chairman also welcomed the Ministerial approval on the new draft law regulating consumer credit activities, which represents one of the steps of the Authority’s ambitious program to develop legislations governing non-banking financial markets and instruments.
This came on the sidelines of Prime Minister’s visit to FRA’s headquarters at Smart Village and his meeting with FRA’s Board members. During his visit, Prime Minister reviewed the implementation program of FRA’s strategy to develop the financial services sector in its second year, thus enhancing Egypt’s ranking on international indices, on the top of these is Doing Business Report issued by the World Bank Group.
Dr. Omran emphasized that the Authority has made great progress in activating futures exchange, adding that FRA has prepared a package of draft laws to activate futures exchanges in accordance with the best international practices of rules and decisions governing futures exchanges.
FRA’s Chairman said that with the aim of adding new mechanisms and working to increase liquidity on the Egyptian Stock Exchange, an amendment was made in licensing regulations to practice market maker activity in order to stimulate this type of activities.
He added that the Authority has conducted a social dialogue with parties engaged in Capital Market represented by the Egyptian Capital Market Association – ECMA, Securities Division, in addition to FRA’s Advisory Committee. This dialogue was conducted to enhance the participation of related parties and to check the positive aspects of the proposal submitted by the Egyptian Stock Exchange in order to activate intraday trading mechanism on securities registered at list (B) of specialized activities criteria.
During the meeting which was held between Dr. Mostafa Madbouli-Prime Minister and FRA’s Board members, FRA’s Chairman stated that in order to put the Egyptian insurance industry in the place it deserves, several issues shall be introduced to Law No 10 of 1981 on Insurance Supervision and Control and its amendments. He noted that the said law was issued since more than 37 years, but there was a real need to introduce the new insurance draft law. FRA’s Chairman added that for the first time in the Egyptian economy, new rules were presented to regulate takaful insurance, apply Compulsory Auto Insurance through a specialized insurance pool for this purpose and adopt the e-issuance of insurance policy. Besides, the new draft law insist on the entry of health care companies under FRA’s supervision in order to regulate incorporation rules and conditions set for practicing the activity while allowing reconciliation period. In addition, the new draft law allows the establishment of micro-insurance companies and approves the issuance of life insurance and general insurance products altogether through micro-insurance companies in accordance with the regulations established by the Authority in this regard.
Dr. Omran stressed on FRA’s role in the field of financial inclusion through expanding microfinance base to double the number of beneficiaries, adding that by the end of 2018, financing value reached 11.5 billion EGP with a growth rate of 62% compared to the previous year. Whereas the number of beneficiaries reached 2.8 million through 1849 financing branches covering the countries and cities of the Republic with a growth rate of 22% over the previous year. He noted that in parallel with the positive steps taken in microfinance, the Authority was keen to activate its initiative to provide mandatory insurance system to clients of microfinance institutions against the risk of death and total disability.
On the other hand, FRA’s Chairman presented FRA’s optimistic vision after the promulgation of Law No. 176 of 2018 on regulating financial leasing and factoring, which will contribute to the availability of medium and long-term financing of projects, especially small and medium enterprises. Accordingly, these projects will obtain financing required to carry out their activities through medium and long-term financial leasing contracts that will result in the ownership of these assets. In light of the impressive results of these two activities, the value of financial leasing contracts reached 41.7 billion EGP during 2018, compared to 28.6 billion EGP during 2017 with a growth rate of 46%. In addition, the volume of factored securities was amounted to 10.6 billion EGP during 2018 compared to 8.9 billion EGP in 2017 at a growth rate of 19%.
By the end of the meeting, Dr. Mostafa Madbouli praised the efforts exerted in the field of regulating and developing non-banking financial activities to serve the Egyptian economy.