📄 Earlier in September, the Financial Regulatory Authority (FRA) set out to make the consumer finance sector easier to navigate, unveiling a new comprehensive guide (pdf) designed to help customers better understand their rights and give companies a clearer picture of their regulatory obligations and compliance requirements.

With service providers and fintech platforms popping up across the market and the wider non-banking financing sector picking up steam, the consumer finance rulebook has been getting a few additions along the way. In January alone, consumer finance transactions grew 53.2% y-o-y, reaching nearly EGP 8.5 bn compared to EGP 5.5 bn in January 2025, according to FRA data cited by Al Ahram, with the number of active individual borrowers standing at 1.2 mn. Consumer finance extended by NBFIs served more than 10.8 mn customers by end-2025, according to FRA data.

That growth has come with scrutiny, and it’s been the talk of the town all summer long. In May, CIB CEO Hisham Ezz Al Arab went on television to warn that consumers shut out of bank financing were turning to non-bank lenders at elevated rates despite weak repayment capacity — invoking the US subprime crisis as a reference point. The warning landed in an already-charged environment: Egyptian law firms had been logging a rise in complaints over aggressive debt-collection tactics tied to BNPL products, social media had turned the sector’s lending practices into a recurring conversation, and talk shows had picked up the thread.

The Central Bank of Egypt (CBE) and FRA moved in tandem — the central bank barring banks from granting credit facilities to NBFIs that weren’t fully coded and reporting to I-Score, and the FRA following with a public three-tier blacklist for the sector and tying expansion rights to a clean compliance record.

The sector is still finding its footing — that’s where the new guide comes in. We’re breaking down the key rules and rights to keep on your radar as a consumer.

First, some background: The reference is set up on the Consumer Finance Law No. 18 of 2020, which allows FRA oversight over non-bank installment financing, blanketing payments for durable goods and services, and excludes real estate, leasing, factoring, and microfinance. The guide comes in the face of recent fraud incidents, including the headline-making 319 mn financing scandal at Global Paradigm School, involving allegedly unauthorized loans issued using parents’ data. To keep incidents like this at bay, the guide sets out clear regulations covering the entire borrower lifecycle — from initial marketing and pre-loan disclosures to contract execution and dispute resolution.

Licensing and governance: who can operate?

The setup basics: The guide first lays out fixed licensing requirements covering company formation, capital criteria, shareholder ownership structures, and branch registration rules. On the management side, it sets rules for board composition, specialized executive committees, key manager qualifications, and internal audit controls.

Keeping an eye out on the financial side: When it comes to solvency, the guide incorporates Basel III benchmarks covering Capital Adequacy Ratios (CAR), leverage ratios, provisioning requirements, concentration risk limits, and mandatory financial stress testing — all aimed at ensuring companies maintain sufficient capital buffers against operational and credit risks. The guide also mandates maintaining IT infrastructure and cybersecurity standards, in addition to compulsory periodic penetration testing, as an ongoing requirement for keeping an active license.

The real meat of the guide: knowing your rights as a customer

Beyond the licensing fine print, the guide mostly drew attention for its customer-facing rules, placing transparency front and center. It made one thing explicitly clear: there should be no surprises to what customers are signing up for.

Before you sign off on financing, companies are required to spell out the details — interest rates, total financing costs, administrative fees, repayment schedules, and any associated risks. And when it comes to paperwork, incomplete documents aren’t getting a signature: companies cannot ask customers to hand over blank signed documents or trust receipts as loan collateral.

Binding risk-management ins.: Companies are now required to provide ins. coverage against death and permanent total disability for borrowers up to the age of 65, with coverage that matches their outstanding financing balance.

And, transparency around debt collection firms: The guide mandates the creation of a debt collection agency registry, giving customers visibility into the firms contracted by non-banking financial institutions. It also requires the registry to include collector credentials and communication channels, alongside mechanisms for following up on customer complaints with corrective measures.

Credit checks and fraud controls

More closely monitored financing: More in aid of consumer finance firms, the guide introduces stricter regulation concerning credit evaluation and creditworthiness. Borrowers are now subject to ongoing monitoring of their financial standing — one-off credit checks are no longer enough. The aim is to help companies keep a closer eye on credit risk and non-performing loans. Before financing is provided, companies must assess the customer’s repayment capacity and financial position. If a customer falls behind on scheduled payments, companies are required to follow up accordingly. Not only that, but companies are also expected to verify that financing is being used for its intended purpose.

Even tighter customer background checks: Anti-money laundering and counter-terrorist financing decrees are also included in the guide, covering customer due diligence, suspicious transaction reporting, and record-keeping. The guide also orders companies to integrate with credit bureaus and information companies to consolidate credit data and improve risk assessment.

Speaking of data, the FRA recently introduced two separate but complementary regulatory tracks, including real-time, event-by-event I-Score reporting to the Egyptian Credit Bureau. The new requirements mean non-bank lenders must transmit live, transaction-level feeds to I-Score across every stage of the loan lifecycle, replacing monthly batch updates. This includes loan approval, disbursement, individual repayments, facility terminations, and the start of legal proceedings.

The FRA is also pushing for a direct database link to get a clearer picture of lending activity and lender risk. Under the new requirements, lenders must plug their internal databases directly to the FRA, providing a stream of data on customer demographics, real-time product purchases, repayment behavior classifications, and company solvency metrics.

Plus, a two-month deadline for implementing one-time-password verification: The FRA has also issued decrees requiring licensed consumer finance and MSME/microfinance providers to introduce OTP verification for customers. The process is straightforward: an OTP is sent to the customer’s registered phone number when the financing contract is signed and again when the financing is disbursed. Each OTP must then be recorded and retained as evidence of customer identity verification.

The guide doesn’t create new rights so much as it names the ones that already existed but were buried (and routinely ignored). Before signing any contracts, do your homework, check that the repayment schedule includes all fees, confirm that the company is licensed, and ask for registry credentials.