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For the first time, FRA issued guidance manuals for Auditors and examiners who examine entities engaged in microfinance activity

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• Dr. Mohammed Omran: Strengthening microfinance activity is FRA’s priority in 2018
• The Microfinance Advisory Committee stated that spreading awareness will support the State’s plan for financial inclusion

During the first meeting of Microfinance Advisory Committee, Dr. Mohammed Omran, FRA’s Chairman revealed that FRA has prepared number of guidance manuals to enhance the performance of microfinance activity in the Egyptian market , that is  in an organizational response from the Authority  to continue the positive trend for the growth of microfinance activity and its positive results in Egypt where it has witnessed a remarkable growth rate. He added that the number of licensed entities to practice microfinance from its main headquarters in all governorates reached about 840 and more than 750 branches by the end of 2017. This led the Authority to prepare a guide for preliminary desk examination of financial statements in order to set guidelines for the Authority’s specialists to carry out preliminary examination of the annual and periodic financial statements submitted to FRA (including the financial statements of companies, associations and civil institutions that engaged in microfinance activity). The said guidance will help in preparing a report of preliminary examination results in order to take the needed procedures.

Dr. Omran emphasized that now we are having an institutional organizational procedure to carry out a fast, accurate and objective examination for the submitted statements.   He added that the guidance considers the accounting policies used by the entities engaged in the activity to ensure that the Authority’s examiners are fully aware of the Egyptian accounting standards related to the company’s activities which are examined to identify any wrong application of the accounting policy or any  ignorance to disclose an accounting policy that has significant items that may affect the financial statements. That is besides  revising  specific subjects that are needed to be disclosed when they exist in the financial statements, such as related parties, potential liabilities, subsequent events, capital commitments or the risk of Existing financial instruments  by the end of the financial year such as credit risk, liquidity, foreign currency risk.

Dr. Omran said that the Authority has also sought to prepare a “guide to audit the accounts of licensed entities engaged in microfinance activity (companies, associations and civil institutions), pursuant to the provisions of Article (9) of Microfinance Law no. 141 of 2014 to guide the auditors of companies, associations and NGOs licensed to practice microfinance activity .

The committee recommended that the legislations and rules regulating microfinance activity should be considered to serve the market and its clients and to expand the idea of financial inclusion to support the state plan by spreading awareness of microfinance activity.

It is worth mentioning that the Advisory Committee was formed by a decision of the Board of Directors of the Authority. It consists of Dr. Mona Zulfikar, President of the Egyptian Microfinance Union, Mr. Sherif Samy, an experienced member, Mr. Mohamed Mashhour,  the vice chairperson of Banque Du Caire, and Ms. Nevine Badreddine – Chairman of  Small and Medium Enterprises Development Authority – SMEDA, Ms. Hala Fawzi, MP and Head of Future Business Women Association, and Ms. Amal Ragheb, Chairman and Managing Director of  “Tasheel for microfinance services”. 
 

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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