The Financial Regulatory Authority (FRA) has issued Decision No. 258 of 2025, revoking the microfinance licences of 258 NGOs in Category “C” due to persistent regulatory non-compliance. The move follows extensive monitoring and inspections that uncovered serious violations threatening market stability. It aims to bolster the financial sector and protect client rights.
The Financial Regulatory Authority (FRA), chaired by Mohamed Farid, has issued Decision No. 258 of 2025, revoking the microfinance licences of 258 NGOs classified under Category “C”. This action comes after extensive monitoring and inspections that revealed persistent non-compliance with microfinance regulations outlined in Law 141/2014 and its amendment by Law 201/2020.
The FRA stated that the decision aligns with its broader efforts to reinforce the stability of the non-banking financial services sector, protect client rights, and ensure a more efficient market capable of supporting vulnerable groups, contributing to wider economic and social development. The FRA’s register currently includes 754 licensed microfinance NGOs: 23 Category “A” organisations with portfolios above EGP 50m; 33 Category “B” entities with portfolios between EGP 10m and EGP 50m; and 698 Category “C” NGOs with portfolios of EGP 10m or less.
Farid emphasized that licence revocation occurred only after providing ample time for the violating entities to rectify their status and complete licensing requirements. He noted that all communication and warning channels had been exhausted without response, necessitating intervention to protect market stability and client interests. Inspections showed that most violations involved a complete absence of activity and failure to provide financing services to target beneficiaries, rendering the licences effectively dormant. Other breaches included severe non-compliance with supervisory obligations, particularly the continuous failure to submit periodic reports and financial statements, preventing the FRA from assessing their financial positions.
The review also indicated that these NGOs were not integrated into the microfinance market infrastructure, failed to report to credit bureaus, and had lost membership in the Egyptian Federation for Micro, Small and Medium Enterprise Finance—both key prerequisites for responsible operation. Farid stressed that the board’s approach is not punitive but aims to build a robust, sustainable microfinance industry. He said: “Allowing inactive or non-compliant entities to remain in the market undermines credibility and introduces systemic risks.” He added that the decision will streamline the sector, strengthen compliant institutions, enhance client protection, and support greater financial and investment inclusion.
Farid reaffirmed that the FRA will continue offering technical assistance and specialised training to committed NGOs and will work with relevant stakeholders to expand access to underserved customer segments. At the same time, the authority “will not hesitate” to take further action to ensure market discipline and safeguard the rights of all parties.