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Arab Finance: The Financial Regulatory Authority (FRA) has approved the registration of EgyServ and Egyptian International in its newly established register for companies engaged in collecting receivables on behalf of entities operating in non-banking financial activities, marking the first registrations under the framework, as per a statement.
FRA Chairman Islam Azzam said the launch of the register and the commencement of company registrations support efforts to regulate receivables collection activities within Egypt’s non-banking financial sector through a defined set of standards and requirements.
He added that the authority continues to develop regulatory and supervisory frameworks for non-banking financial activities in line with market developments, while seeking to balance market growth with the protection of clients and stakeholders.
According to the regulations, the register will include information on licensed collection companies, including their legal structure, objectives, headquarters, executive management, legal representatives, and contact details. The measure is intended to improve transparency and enable market participants to verify entities authorized to conduct collection activities.
Under the new rules, companies operating in non-banking financial activities will be prohibited from using unregistered collection firms once the compliance period ends. The FRA said the requirement is intended to strengthen oversight of the sector and limit unregulated practices.
The resolution outlines a registration process requiring companies to submit an application to the FRA, along with supporting documents, including their articles of association, audited financial statements, and previous collection service contracts. The Authority will review and issue a decision on applications within 30 days of receiving all required documentation.
To qualify for registration, a company must be a commercial entity whose objectives include receivables collection activities. It must also have issued and paid-up capital of at least EGP 10 million, or the equivalent in foreign currency, and shareholders’ equity of no less than EGP 20 million. Companies that do not meet the minimum equity requirement may still qualify if they have operated for at least three years prior to applying and have maintained equity levels at least equal to their paid-up capital throughout that period.
Registrations will remain valid for three years and may be renewed for similar periods, provided companies continue to meet the eligibility requirements. Renewal applications must be submitted at least three months before the registration expires.
The framework also requires registered companies to adhere to principles of honesty, integrity, and professionalism, while prohibiting practices that may harm clients or other stakeholders. Their activities are limited to collecting financial receivables, and they are barred from conducting financing activities.
In addition, the regulations establish controls governing collection processes and the handling of funds. Collection companies are prohibited from depositing collected amounts into their own accounts and must use approved non-cash payment methods or checks issued directly in favor of the creditor. The FRA said these measures are intended to increase transparency and reduce operational risks.
The decision further requires collection companies to maintain the confidentiality of customer data and prohibits the disclosure or use of such information except as permitted by law. Registered companies must also submit semi-annual reports to the FRA detailing their performance, contracted entities, amounts collected, and collection methods used.
Companies and entities operating in non-banking financial activities will also be required to inform customers about the collection companies they engage with, the methods available for verifying collectors’ identities, and official communication channels. They must also monitor complaints related to collection companies and take corrective action when necessary.
The resolution grants the FRA Chairman authority to impose administrative measures on registered companies that violate the governing regulations, including warnings, temporary suspension, or permanent removal from the register, to ensure compliance with the rules governing the activity.
