New Consumer Finance Law no.18 of 2020

Written By - Hatem Ahmed Sayed, Senior Associate
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The new law governing consumer finance in Egypt is Law no.18 of 2020 for Consumer Finance (the “Law”), this Law was promulgated on 16th March 2020 and came effective on March 18th 2020.

What is the Consumer Finance “Consumer Finance” activity?

Any activity which aims to provide a certain credit/ fund for the purchase of goods and services for Consumer purposes performed on regular basis through commercial payment cards or other payment means approved by the Central Bank of Egypt (the “CBE”).

Which Companies shall be subject to this Law?

This Law applies to companies licensed by the Financial Regulatory Authority (“FRA”)to engage in consumer finance activities that perform non-banking financial market services in accordance with the provisions of Law no. 10 of 2009. Consumer finance activity may be exercised only by companies authorized by the FRA.

Which financial activities are covered by the Law?

  • All types of vehicles;
  • Durable goods, including electric and electronic devices;
  • Educational services;
  • Medical services;
  • Travel and tourism services;
  • Any other consumer goods or services approved by the Board of Directors of the FRA.

Which financial activities are not covered by the Law?

The Law does not apply to any financing activities of banks, even if the purpose of financing is the purchase of consumer goods or services. It  also does apply to mortgage finance, financial leasing, factoring, micro-finance or purchase of real-estate through developers.

Which authority regulates consumer finance companies and what powers does it have?

The FRA shall have the full competence, control and supervision by:

  • Reviewing records, books, documents, data and electronic media at premises and branches of consumer finance companies and providers.
  • Investigating offenses which are in violation of the provisions of this Law or the decisions made for its implementation.
  • Granting the license for consumer finance activity within thirty (30) days of the date of request and if the request is rejected, FRA shall issue a reasoned decision in this regard.

Which courts are competent to deal with disputes arising from the implementation of the provisions of this Law?

The Egyptian Economic Courts have the jurisdiction over disputes and/or claims, including temporary, substantive and criminal enforcement disputes due to breaches of the Law.

At Levari, we believe that the consumer finance activity has many advantages on the national economy, as it will increase the volume of investments and will push the market of the goods and services forward.

Having the FRA regulating this will result in an accurate and precise database, allowing investors and the government to take important decisions that will improve the market.

If you are interested to know more about this Law and getting licensed to conduct such activity, please send us on lucy@levarilaw.com