Egypt’s FRA Sets Minimum Capital for Fintech Startups
To be eligible for a license, a startup must be an Egyptian joint stock company.
Egypt's Financial Regulatory Authority (FRA) has introduced a minimum capital requirement of EGP 15 million for fintech startups willing to engage in non-banking financing activities, the FRA stated on January 8th.[1]
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The decision aimed at enhancing the business environment by streamlining procedures, accelerating processes, and reducing costs, particularly for nascent non-banking financial entities.
The new directive specifically targets fintech startups aspiring to secure licenses for various non-banking financing activities, including mortgage finance, SMEs finance, microfinance, leasing, factoring, and consumer finance.
To be eligible for a license, a startup must be an Egyptian joint stock company with an issued and paid-up capital of no less than EGP 15 million for each activity.
The granted license will have a validity period of two years, during which the company must fulfill the final licensing requirements.
As an additional measure, the FRA has mandated that a minimum of 25% of the company's capital should be owned by specialists in the field of technology.
Furthermore, fintech startups are obligated to commence practicing the approved activity within two months from the issuance date of the license.
As Egypt positions itself as a growing hub for fintech innovation, these regulatory measures signify a strategic move to ensure a robust and compliant ecosystem for financial technology ventures.