Egypt FinTech Overview, Law and Regulations
FinTech in Egypt is a rallying point for entrepreneurs, investors, mentors, and financial corporations to mingle, innovate, and generate success stories in Egypt’s FinTech ecosystem, with the purpose of increasing financial inclusion and making banking services accessible to all Egyptians.
Who are the main regulators controlling financial technology in Egypt?
1- Central Bank of Egypt (CBE).
2- Financial Regulatory Authority (FRA).
Fintech landscape in Egypt
Egypt’s FinTech landscape further noted that over the previous five years, a total of USD 250 million has been invested in FinTech and FinTech-enabled firms, rising from USD 0.9 million in 2017 to USD 159 million in 2021. Furthermore, there is a tenfold increase in FinTech deals between 2017 and 2021, From only 3 deals in 2017 to 32 deals in 2021.
What is Fintech law?
On February 8, 2020, Law No. 5 of 2022 Regulating and Developing the Use of Financial Technology in Non-Banking Financial Activities (The FinTech Law) was published.
What is Fintech?
The Egyptian law defines financial technology as “any mechanism in the non-banking financial sector that uses modern and innovative technology to support and facilitate financial services, financing, and insurance activities through the use of applications, software, digital platforms, artificial intelligence, or electronic records”
Summary of important provisions in Fintech Law No. 5 of 2022
The Law aims to put in place long-awaited rules controlling the provision of non-banking financial services (NBFS) through digital channels, which aligns with the government’s financial inclusion goals. The FinTech law seeks to broaden the scope of electronic non-banking financial activities in order to reduce the costs of services provided by these activities, as well as to promote Egypt’s Financial Regulatory Authority’s role in ensuring that non-banking financial activities adhere to transparency and rational governance.
FinTech law stated that the startups can apply for a short-term fintech startup license that is valid for a maximum of two years. According to the bill’s House CIT Committee report, the law grants the FRA regulatory jurisdiction over the fintech industry, including the authority to issue licenses and certificates for fintech and services. The FRA is also entrusted with promoting financial inclusion through the use of fintech technology, which the statute defines as expanding the use of banking and non-banking financial services (NBFS).
Fintech companies have six months from the day the executive regulations are released to comply with the legislation’s requirements. The FRA can issue three further six-month extensions, for a total of two years of compliance. The prime minister can extend the contract for another two years.
A certain point was reached, Globally, FinTech implementations have aided in the facilitation of banking and financial services, allowing lending without the intermediation of commercial banks, facilitating and accelerating payments and fund transfers, developing low-cost investment methods through financing platforms, offering solutions to financial sector obstacles, and addressing financial services industry challenges, all of which have contributed to the enhancement of productive sectors and the growth of the economy.