Egypt expands consumer finance network
Egypt expands consumer finance network
Egypt's
financial regulator has unveiled plans to boost the consumer finance through
adding a number of commodities funded by consumer financing firms.
The
Financial Regulatory Authority (FRA) said in a statement that these commodities
include furniture, jewelry, watches, shoes, clothes, bags, books, stationary
products, toys, eyeglasses, food and automotive spare parts.
The
FRA’s plan is aimed at stimulating the economy through widening consumer
finance as the government is seeking means to overcome the repercussions of the
Covid-19 pandemic.
The
consumers can buy these commodities from department stores on credit, according
to regulations laid out by the FRA in this regard. The installments may be
extended for years to increase sales and push up consumer demand.
It
is part of the cabinet’s initiative to boost the local products as companies
resume their operations.
It
is also within the framework of a national strategy for boosting non-banking
services in a bid to enhance its role in the country’s economic and social
development.
The enhancement of the non-banking sector is part of
an overall economic reform program for sustainable development, in line with
Egypt's Vision 2030.
Consumer
finance is carried out by registered firms, specialized in this line of credit.
A consumer finance firm provides loans to customers without receiving deposits.
It is part of the non-banking finance instruments.
Earlier
this year, the parliament passed a bill for regulating consumer finance.
According to the law, the consumer finance will include funding solutions for
buying cars, durable goods, i.e. electric and electronic equipment, educational,
medical and travel services.
The
consumer finance is currently estimated at around LE70 billion annually,
according to FRA.
The
government is tipped to boost non-banking finance to provide the private and
public sectors with more funding options. The non-banking funding instruments
include leasing, factoring and mortgage finance schemes.
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