A new piece of Egyptian legislation is expected to change the status of microfinance institutions (MFIs) from philanthropic organizations to commercial entities. The new microfinance law will grant customers of MFIs “access to commercial finance, transactional services support, [and] savings,” according to Aftab Ahmed the chairman of Citibank Egypt [1].

An advisor to the Egyptian Financial Services Authority’s (EFSA) chairman for microfinance said the legislation is intended to allow the expansion of the microfinance market, to enable the development of new finance products (such as micro-insurance), to serve more individuals seeking microcredit, to attract international funding, and to increase transparency. Under the new legislation, the EFSA will have regulatory power over MFIs.

By Eric McKay, Research Assistant

Bibliography

[1] “New law to expand Egypt’s microfinance market”, February 9 2010, http://www.zawya.com/Story.cfm/sidZAWYA20100210070811/New%20law%20to%20expand%20Egypt%27s%20microfinance%20market