As part of FRA’s continued keenness to promote microfinance activity as one of the main means to encourage the participation of low-income groups in the economic activity, reduce unemployment and improve the incomes of poorer families as individuals and micro-enterprises wish to establish, expand or develop a small-scale of commercial or economic activity resort to it.
In its last meeting, FRA’s Board of Directors approved under the chairmanship of Dr. Mohammed Omran granting license to Microfinance Investment Funds. These funds will purchase micro finance portfolios from companies and entities licensed to engage in microfinance activity thus, providing financing for these entities to reinvest them in granting finance to those wishing to obtain it from individuals and small enterprises.
Dr. Omran emphasized that these kinds of funds do not provide “direct” finance to individuals, but rather purchase finance portfolios from companies and NGOs that are licensed to practice this activity.
Also, FRA’s Chairman stated that the decision of FRA’s Board of Directors amend the rules governing the activity for each of the companies and NGOs to allow them to transfer their portfolio to the investment funds referred to.
Dr. Omran added that this decision comes as a result of the Authority’s keenness to diversify sources of finance for companies and NGOs engaged in microfinance activity and to work towards the sustainability of these sources thus, increasing the volume of granted financing and increasing the number of beneficiaries of the microfinance activity for various economic purposes and finally increasing operation rates in the national economy.
Within the framework of protecting the rights of clients dealing with companies and NGOs, the rules issued by the Authority stated that the transfer of rights from companies and entities licensed to engage in microfinance activity to these specialized funds will not affect financing conditions among the clients, companies and NGOs as these current conditions will remain as it is.
FRA’s Chairman expected that establishing such funds will increase and expand microfinance activity and also will increase the number of beneficiaries.
It should be noted that the number of beneficiaries of the microfinance activity has reached more than 2.2 million beneficiaries, with the value of existing financing by the end of 2017 to be more than 7 billion pounds, and the percentage of women benefiting from this activity was about 70% of the total number of beneficiaries. Also, the number of associations and NGOs licensed to practice this activity from the Authority is more than 850 associations and private companies, in addition to 3 companies that are currently active and more than 5 new companies that complete licensing procedures in the Authority. Besides, there are more than 1600 branches and offices offering this service all over Egypt’s Governorates.