Egyptian FRA is working on developing a credit scoring system for unbanked categories

Egypt – The Financial Regulatory Authority (FRA) is adopting an expansion strategy to develop non-banking financial activities, putting in place the necessary controls and legislation to keep pace with digital transformation processes, in line with global markets.

Daily News Egypt interviewed Hesham Ramadan, Deputy Chairman of the Financial Supervisory Authority, to learn more about the authority’s future plans, especially in fintech and digital transformation.

What new projects is the authority working on in the current period?

The FRA is developing a credit scoring system that will enable unbanked people to access credit. Ratings will be evaluated based on consumer behavior and non-financial data.

The project is being carried out in cooperation with a data solution provider to help sort out non-banking financial activities, providing classification for unbanked categories.

Have you received requests for establishment from credit rating companies?

After the procedural change that allowed the establishment of businesses without the need for a foreign institution in the ownership structure, a local company is seriously looking to establish a business in this field, but I will not disclose its name.

What about other apps for setting up fintech companies?

The FRA has received several applications for the establishment of financial technology platforms: two companies want to establish digital insurance platforms, two companies want to launch digital insurance brokerage platforms and one company seeks to obtain a license for two consumer financing and a capital robo-advisor. market activity.

The FRA agreed last week to establish rules and regulations for setting up businesses wishing to engage in non-banking financial activities through the use of fintech.

When will establishment and licensing checks be issued for these companies?

It is expected to announce incorporation checks for such businesses this week, followed by the announcement of license checks, highlighting that one of the most important requirements that have been set by the FRA is identity digital, whether for the company or the consumer. The EKYC service must be provided.

We have made available technology infrastructure and special cybersecurity systems to secure customer data and functional requirements depending on the nature of these platforms as Data Security Officer, Audit and monitoring of computer systems.

It was agreed that technology platforms wishing to establish themselves will commit the same amount of capital depending on the activity they wish to carry out, taking into account technological requirements.

Start-ups with innovative ideas will have their capital determined differently.

What about the latest developments in the future law on the securitization of rights?

The future rights securitization law is subject to the capital market law and aims to accelerate the capital cycle. The door is open for businesses and organizations to apply for issuance.

The law is in the interest of infrastructure companies with fixed periodic revenues such as gas and electricity, as well as water and telecommunications companies, which provide financial resources at a lower cost than bank borrowing .

As far as green bonds are concerned, the supply is not keeping up with the strong increase in demand due to the scarcity of green projects.

When will the unified insurance law be published?

The unified insurance law should be published before the legislature next June. The general reading of the articles of the law has been completed and is in the process of being approved by the Senate, on the condition that it be presented subsequently to the sessions of the Chamber.

Are there any cooperation protocols to be signed in the coming period?

The FRA has signed three cooperation protocols with the Ministry of Higher Education and Scientific Research and the Ministry of Education, with the aim of cooperating with both ministries to include financial literacy in teaching curricula and to integrate financial education skills into curricula, whether in university or pre-university training.

A cooperation protocol has been signed with the Ministry of Youth and Sports, with the aim of training trainers within the Ministry of Youth and Sports to raise awareness of financial culture, train others, to reach the greatest possible number of target audience.

The National Finance Awareness Strategy 2023-2026 targets all segments of society, especially young people. Raising awareness of non-banking financial activities is the main objective of the strategy.

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