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FRA is preparing for a global celebration – Thursday 21 /11/2019

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• Dr. Omran: The Authority has been serving the national economy for 80 years starting from the issuance of the first legislation regulating insurance business and the establishment of the first entity to regulate and monitor insurance activities in Egypt in 1939
• Dr. Omran: The value of factored securities increased by more than ten times, and values of financial leasing contracts are eleven times in ten years
• Dr. Omran: We have nearly three million beneficiaries of microfinance activity in less than five years

On the 10th anniversary of FRA’s establishment to replace three regulatory bodies in a unified regulator for the non-banking financial sector, Dr. Mohammed Omran – FRA’s Chairman affirms that representative of international financial institutions are looking forward to participating in this celebration prepared by the Authority under the auspices and presence of Dr. Mostafa Madbouly, Prime Minister of Egypt.

Dr. Omran reveals that leading and well-known international economic figures operating in the Capital Market and sustainable development have accepted the invitation to speak in a number of workshops that are closely related to performance issues and developments in non-banking financial activities , adding  that the World Bank will participate in the event. In this respect, during the period from 9- 10 December 2019, Cairo will be the focus of attention for non-banking financial activities globally.

FRA’s Chairman emphasized that the merger decision resulted in the first clear and comprehensive institutional framework for the non-banking financial sector. Also, he noted that the merger decision contributed significantly to granting independency to the regulator.  Accordingly, a will was launched to develop the regulatory performance on the non-banking financial markets since 2009 and bring the Egyptian market to the rightful place. This was clearly shown in Egypt’s distinguished rating on Index of Protecting Small Shareholders Rights which was the highest rating obtained by Egypt – recently – among all indicators included in the World Bank report.

Dr. Omran added that he would be keen to present a detailed statement to the international crowd of participants on the achievements of the past ten years since the decision to establish a unified entity that regulate all non-banking financial activities at the time. These activities included (capital market – insurance – mortgage finance – financial leasing) in addition to other financial activities such as factoring and microfinance that achieved impressive results in five years since the issuance of the laws regulating them.

Dr. Omran noted that the value of securities issued in the primary market since the merger reached 923.6 billion pounds, adding that the total market capitalization increased from 499.6 billion pounds in 2009 to 749.7 billion pounds by the end of 2018. He emphasized that FRA continued to support the role of the Egyptian Stock Exchange in attracting more investments by increasing its depth and supporting the implementation of State-owned enterprises (SOEs) program. The full implementation of this program is expected to result in adding about 35 new companies to the capital market. Thus, the number of listed companies will reach 275 companies and market value is expected to rise to 1.6 trillion pounds by the end of 2022.

Dr. Omran added that in terms of other non-banking financial activities, shareholders’ equity in the insurance sector increased by 345% since the merger. Also, he noted that the net investments of insurance sector jumped from 29 billion pounds to 99 billion pounds, a change rate of 244%. On the other hand, the total mortgage finance granted since the merger was about 10.7 billion pounds, and the value of financial leasing contracts almost doubled eleven times during the past decade, reaching 151.7 billion pounds since the merger. Dr. Omran pointed out that number of microfinance  beneficiaries reached 2.8 million  in just five years, and the value of factored securities increased more than tenfold, increasing from 0.957 billion in 2011 to 10.6 billion pounds in 2018. Moreover, in the field of movable collaterals, the number of publicizations reached nearly 29 thousand with a value amounting to about 489 billion pounds, since the electronic register was launched in March 2018.

Dr. Omran pointed out that the development of all these activities was clearly shown in the first nine months of 2019 where the value of securities issued in the primary market reached 22.1 billion pounds and the total market capitalization reached 715.4 billion pounds during the same period.

Dr. Omran said that during the first nine months of 2019, the total premiums of insurance sector amounted to 25.7 billion pounds, with a growth rate of 24.2% over the same period in 2018. While the value of total compensations amounted to 11.96 billion pounds, with a growth rate of 17.9% over the same period.
On the other hand, total mortgage  finance granted  amounted to 1.92 billion with a growth rate of 37.5% during the same period last year and the value of financial leasing reached 40.56 billion pounds with a growth rate of 48.9% during the same period last year. Dr. Omran noted that now the number of microfinance beneficiaries was 3 million since the beginning of the activity and the size of microfinance funds since the beginning of the activity was about 14.9 billion pounds and the value of factored securities reached 7.18 billion pounds during the first nine months of 2019.

Dr. Omran is keen to finalize a policy for transition to digital control, in line with the continuous development in the non-banking financial sector in accordance with international standards and practices and in a manner that ensures the realization of principles of justice and transparency and development of investment awareness to promote reform and development opportunities.

It is worth mentioning that the Financial Regulatory Authority (FRA) established in accordance with Law no. 10 of 2009. The Authority is responsible for supervising and regulating non-banking financial markets and instruments, including Capital Market, Futures Exchanges, all activities related to Insurance Services, Mortgage Finance, Financial Leasing, Factoring, and Securitization. FRA’s role is to ensure the integrity and stability of those markets, regulate and develop non-banking financial activities and maximize its competitiveness to attract more local and foreign investments.

The Authority seeks to build an inclusive non-banking financial sector that stimulates economic growth and contributes effectively to achieving objectives of sustainable development. A sector that reinforces its position as one of the arms of the Egyptian financial sector in a manner that integrates with the role of the Egyptian banking sector and the international financial system, all in light of FRA’s strategy for non-banking financial activities (2018-2022).
According to the Egyptian Constitution of 2014, the Egyptian Financial Regulatory Authority (FRA) is one of four independent regulatory bodies in Egypt, which include the Central Bank of Egypt (CBE), the Central Auditing Organization (CAO), and the Administrative Control Authority (ACA). The Authority seeks to enhance levels of transparency and safety of non-banking financial institutions in Egypt and protect rights of investors and dealers in the sector as a whole.  FRA works to develop, strengthen, monitor and regulate non-banking financial institutions.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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