Egypt’s central bank gives credit guarantee firms one year to start operations

Egypt’s central bank has given licensed credit guarantee companies one year to start operations after receiving final approval, under new rules governing the establishment, licensing, and supervision of the sector, according to its latest circular released on 24 September.

Companies that fail to begin activities within the one-year period will have their licences cancelled, although the Central Bank of Egypt (CBE) board may extend the deadline by another year.

Under the rules, companies seeking to conduct credit guarantee activities must first apply to the central bank for preliminary approval to proceed with licensing procedures, submitting the required documents and information.

The CBE board will decide on a complete application within 90 days of its submission, and the applicant will be notified of the decision within 15 days of its issuance.

Companies receiving preliminary approval must complete their incorporation procedures within one year of being notified. The CBE board may grant a similar one-year extension.

Once incorporation is completed, the company must notify the central bank, which will inspect its headquarters and branches after the payment of inspection fees of 100,000 Egyptian pounds for the head office and 50,000 pounds for each branch.

The company must then apply for final licensing approval within the deadline set for completing its incorporation procedures, along with the required documents.

The CBE board will decide on a complete final licensing application within 90 days, with the company to be notified within 15 days of the decision.

Following final approval, the licensing decision will be published in Egypt’s Official Gazette at the company’s expense and on the central bank’s website. The company will then be registered in the central bank’s credit guarantee companies register.

Companies may not begin credit guarantee activities until they have been notified of the final approval, authorised to operate, and registered in the central bank’s register.

Licensed companies must also notify the central bank at least one week before their actual start date.

The new rules place credit guarantee companies under the central bank’s supervision and oversight.