Talk shows zero in on parents’ loan crisis at Global Paradigm School

The crisis surrounding Global Paradigm School was in the limelight last night. The controversy erupted last Thursday after a parent posted a video on Facebook in which he claimed his son’s school obtained loans from a consumer finance company under his name without his knowledge. He said that the school used his national ID card, after requesting it under the pretense of updating records, and that a large number of families at the school have since discovered similar unauthorized loans in their names.

The unauthorized loans totaled EGP 319 mn across 619 clients and 839 contracts, Financial Regulatory Authority Chairman Islam Azzam said in a phone interview with El Sora’s Lamees El Hadidi (watch, runtime: 11:12). Azzam added that an investigation into the matter began last Wednesday, a day before the video was published.

The consumer finance company was also at fault, Azzam added. Its contract with the school allowed the latter to handle customer due diligence, verify identities, and collect ID cards and documentation on its behalf — a practice Azzam characterized as fundamentally flawed and a direct violation of regulatory standards.

The next steps: Azzam further noted that an inspection report will be presented this week to the FRA’s Committee for Settling Violations, Initiating Criminal Suits, and Reconciliations for review, and that legal action will be taken against all parties responsible.

REMEMBER: The FRA issued a decree earlier this year to establish an integrated system for listing individuals and companies in violation of non-banking financial regulations. This framework introduced three distinct lists: the warning list, the negative list, and the administrative measures list. The initiative aims to safeguard consumer rights and provide greater transparency regarding the entities and individuals operating across FRA-regulated sectors — specifically within capital markets, ins., and all forms of financing.

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