The Financial Regulatory Authority (FRA) issued a circular mandating companies financing micro-, small, and medium-sized enterprises (MSMEs) not to renew finance for any client until the full repayment of existing finance, according to an official statement on January 1st.

The FRA allows finance companies to provide new loans to clients on the condition that the granted loan is not of the same type as the existing loan.

Finance companies shall also make sure that clients could pay all dues should they receive a new loan.

Companies shall also assess the credit history of the client with other entities through the Egyptian Credit Bureau (I-Score).

The FRA mandates financers with a portfolio of clients who received supplementary finance to reduce the value of the portfolio by the value of the paid loans and report relevant statements to the authority on a monthly basis.

In the case of the prepayment of a loan, the FRA directs companies not to impose costs of finance that exceed the cost of the paid loan.

 

 

 

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