Egypt’s Financial Regulatory Authority (FRA) has issued new circular instructing companies and entities engaged in financing MSMEs not to give new loans or renew existing loans to customers without verifying that their existing loans have been repaid in full. The circular allows financing entities to offer new loans to existing customers parallel to existing loans only if it is not of the same type of financing and in the same funded activity. The new loans should be given only after verifying the customer’s repayment capacity and confirming that the value of total loans to that customer does not exceed the maximum limit stipulated by laws.
