{"id":559844,"date":"2021-02-07T03:57:30","date_gmt":"2021-02-07T03:57:30","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/"},"modified":"2021-02-07T03:57:30","modified_gmt":"2021-02-07T03:57:30","slug":"new-regs-for-sme-lenders","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/","title":{"rendered":"New regs for SME lenders"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-04\"><\/a> <strong>A new regulatory framework for SME lenders is now the law of the land<\/strong> after being published in <a href=\"https:\/\/ent.news\/2021\/2\/SME-lenders-regulations-from-FRA.pdf\">the Official Gazette (pdf)<\/a> last week. Under the framework, lenders must have in place appropriate risk assessment and capital adequacy protocols, ensure they appoint experienced boards (which lines up with <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/9dff8d49-91e9-40aa-b37a-5ad17aa80539\">recent regulations<\/a> on internal structure), and seek approval if a single party plans to hold over more than 25% of the lender. The lenders also need to follow Egyptian Accounting Standards when reporting financials, have specialists on staff, and provide funding to each project separately.<\/p>\n<p><strong>Capital adequacy and risk management: <\/strong>The regs require SME lenders to maintain a <a href=\"https:\/\/www.investopedia.com\/terms\/c\/capitaladequacyratio.asp\">capital adequacy ratio<\/a> of 12% and set aside 15% of their operating profit as a contingency against operational risks, as well as only take on debt up to 9x of their equity base. Other risk mitigation regulations include having 100% of the liquidity needed to cover outbound cashflow for a 30-day period on hand at all times and lending no more than 10% of capital to a single borrower, or 25% to borrowers in the same industry.<\/p>\n<p><strong>Supervision and monitoring, foreign ownership: <\/strong>Other elements of the new framework include rules for monitoring and supervision, such as inspections by the authority, and a requirement to get security clearance to on-board foreign owners.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new regulatory framework for SME lenders is now the law of the land after being published in the Official Gazette (pdf) last week. Under the framework, lenders must have in place appropriate risk assessment and capital adequacy protocols, ensure they appoint experienced boards (which lines up with recent regulations on internal structure), and seek [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":559845,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8614],"tags":[409,72,76,343,871,3727,287],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-559844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-regulation-watch","tag-earnings-watch","tag-enterpriseam","tag-financial-regulatory-authority","tag-regulation","tag-regulation-watch","tag-risk-management","tag-smes","wpautop","entry"],"acf":{"mongo_id":"93bfe2f1-15dc-4688-8827-f47ac6ceb4e0","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2021\/2\/106.jpg","photo_position":"above","related_issue":[559837],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>New regs for SME lenders - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New regs for SME lenders\" \/>\n<meta property=\"og:description\" content=\"A new regulatory framework for SME lenders is now the law of the land after being published in the Official Gazette (pdf) last week. Under the framework, lenders must have in place appropriate risk assessment and capital adequacy protocols, ensure they appoint experienced boards (which lines up with recent regulations on internal structure), and seek [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-07T03:57:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/ent.news\/2021\/2\/106.jpg?fit=%2C&ssl=1\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"New regs for SME lenders\",\"datePublished\":\"2021-02-07T03:57:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/\"},\"wordCount\":216,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"image\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/i0.wp.com\/ent.news\/2021\/2\/106.jpg?fit=%2C&ssl=1\",\"keywords\":[\"earnings watch\",\"EnterpriseAM\",\"Financial Regulatory Authority\",\"regulation\",\"regulation watch\",\"risk management\",\"SMEs\"],\"articleSection\":[\"REGULATION WATCH\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/07\/new-regs-for-sme-lenders\/\",\"name\":\"New regs for SME lenders - 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Any company seeking an SME lending license must be at least 50% owned by juridical\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":574996,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/09\/29\/concentration-risk-regs-relaxed-for-egypts-mortgage-lenders\/","url_meta":{"origin":559844,"position":1},"title":"Concentration risk regs relaxed for Egypt\u2019s mortgage lenders","author":"enterpriseam admin","date":"29 September 2020","format":false,"excerpt":"REGULATION WATCH- Mortgage finance companies can now lend up to 15% of their capital base to an individual household, up from 10% previously, Financial Regulatory Authority (FRA) boss Mohamed Omran said in a statement (pdf). Data has shown that most families opt for mortgages to purchase larger homes in state-sanctioned\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/9\/313.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":600900,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/02\/13\/egypts-fra-makes-insurance-mandatory-for-microfinance-provider\/","url_meta":{"origin":559844,"position":2},"title":"Egypt\u2019s FRA makes insurance mandatory for microfinance provider","author":"enterpriseam admin","date":"13 February 2019","format":false,"excerpt":"REGULATION WATCH- FRA makes insurance mandatory in micro- and SME finance: The Financial Regulatory Authority (FRA) is forcing microfinance and SME finance players to provide insurance coverage for their borrowers, the authority said in a statement (pdf). The contracts will pay out an amount equivalent to the loans in the\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":601205,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/02\/21\/central-bank-of-egypt-studies-licenses-for-sme-focused-lenders\/","url_meta":{"origin":559844,"position":3},"title":"Central Bank of Egypt studies licenses for SME-focused lenders","author":"enterpriseam admin","date":"21 February 2019","format":false,"excerpt":"CBE studies licenses for SME-focused lenders: The Central Bank of Egypt (CBE) is mulling issuing licenses for new institutions specialized in SME financing, Governor Tarek Amer announced, according to CNBC Arabia. The institutions, known as \u201ctier 2\u201d lenders, are non-banking financial service providers. Amer\u2019s announcement came days after the IMF\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/3\/345.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":598384,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/05\/23\/egypts-fra-to-bring-sme-financing-under-2014-microfinance-law\/","url_meta":{"origin":559844,"position":4},"title":"Egypt\u2019s FRA to bring SME financing under 2014 microfinance law","author":"enterpriseam admin","date":"23 May 2019","format":false,"excerpt":"LEGISLATION WATCH- FRA to bring SME financing under 2014 microfinance law: Dedicated SME lenders including finance companies and NGOs could be governed under the 2014 microfinance law (pdf) after the Financial Regulatory Authority\u2019s (FRA) board of directors approved amendments to the legislation, the regulator said in a statement (pdf). The\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":602618,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/04\/02\/sawiris-looks-to-acquire-license-for-sme-focused-bank-in-egypt\/","url_meta":{"origin":559844,"position":5},"title":"Sawiris looks to acquire license for SME-focused bank in Egypt","author":"enterpriseam admin","date":"2 April 2019","format":false,"excerpt":"Hope springs eternal: Naguib Sawiris would like to set up an SME-focused financial institution once the Central Bank of Egypt (CBE) introduces a relevant licensing mechanism, according to the domestic press. The report claims the celebrity bn\u2019aire spoke with CBE Governor Tarek Amer about creating a class of tier-two lender\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/559844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=559844"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/559844\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/559837"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/559845"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=559844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=559844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=559844"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=559844"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=559844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}