MICROCAPITAL BRIEF: Microfinance Institutions African Century Leasing (ACL) of Zimbabwe, Reefy of Egypt Acquire Banking Licenses; ACL to Accept Deposits

The Reserve Bank of Zimbabwe recently granted a banking license to African Century Leasing (ACL), making it the first microfinance institution in the country that may accept deposits. In 2013, the reserve bank set a minimum capital requirement of USD 5 million to acquire such a license. ACL does not report data to the US-based nonprofit Microfinance Information Exchange, and financial data on the organization is not otherwise available.

Patrick Mangwendeza, chairman of the Zimbabwe Association of Microfinance Institutions, was quoted as saying, “While the current minimum capital of $5 million may be too high for our members to consider upgrading, there is likely to be new players coming into the sector and open microfinance banks or existing banks struggling to meet the new capital requirements downscaling to micro banks” [1]. A total of 147 microfinance institutions are registered with the Reserve Bank of Zimbabwe.

Reefy, an Egyptian microfinance lender, recently acquired the first microfinance license issued by the Egyptian Financial Supervisory Authority (EFSA). A law passed in the country in 2014 defines microloans as those smaller than EGP 100,000 (USD 13,100). The licensing system is intended to support the law, whose goals include encouraging transparency, professional standards and enhancing access to finance. The license does not allow for deposit-taking.

By Jeff Pierce, Research Associate

About Reefy

Reefy, established in 2007, is a microfinance lender in Egypt. It was started by Mr Ahmed El Bardai, a former chairman of Egypt’s Banque du Caire, with paid-in capital of EGP 22.5 million (USD 3.7 million) sourced from his personal finances; Mr Naguib Sawiris, a telecom business owner; and the Social Fund for Development, which is funded by the Egyptian government. Since microfinance institutions (MFIs) were not licensed to lend directly to consumers in Egypt, it disbursed loans through Commercial International Bank, a private bank in Egypt. As of 2010, Reefy reported loans totaling EGP 600 million (USD 99 million) disbursed to 60,000 clients through its 29 branches. Reefy does not report data to the US-based nonprofit Microfinance Information Exchange (MIX), and more recent data on the firm is not available.

About Reserve Bank of Zimbabwe

The Reserve Bank of Zimbabwe (RBZ) was founded in 1956 as the Bank of Rhodesia and Nyasaland. It is responsible for the formulation and implementation of monetary policy in Zimbabwe. It supervises the country’s financial sector, including commercial banks and other financial institutions. As of 2014, Dr Charity Dhliwayo is the acting governor of the institution.

About Egyptian Financial Supervisory Authority (EFSA)

The Egyptian Financial Supervisory Authority (EFSA) was established in 2009 with the aim of supervising and regulating the financial services sector, including non-bank financial markets, in Egypt. This includes supervising capital markets, insurance services, mortgages, leasing, factoring and securitizations. EFSA is also responsible for licensing non-banking financial services, as well as for inspecting licensed institutions.

Sources and Additional Resources:

MicroCapital, June 19, 2014, “Egypt Approves Microfinance Law in Effort to Expand Access to Microcredit, Bring Microenterprises into Formal Economy,” http://www.microcapital.org/microcapital-brief-egypt-approves-microfinance-law-in-effort-to-expand-access-to-microcredit-bring-microenterprises-into-formal-economy/

MicroCapital, January 13, 2015, “Egyptian Financial Supervisory Association Regulates Microfinance Companies, Setting $2m Capital Requirement,” http://www.microcapital.org/microcapital-brief-egyptian-financial-supervisory-association-regulates-microfinance-companies-setting-2m-capital-requirement/

[1] BH24: “Zimbabwe licenses first Microfinance Bank,” http://www.bh24.co.zw/zimbabwe-licenses-first-microfinance-bank/

[2] Zawya: “Reefy gets first Microfinance Licence in Egypt – Sawiris,” http://www.zawya.com/story/Reefy_gets_first_microfinance_licence_in_Egypt__Sawiris-ZAWYA20150210043106/

[3] Egyptian Financial Supervisory Authority, www.efsa.gov, Microfinance, http://www.efsa.gov.eg/content/efsa_en/micro_pages_en/main_micro_page_en.htm

MicroCapital Universe Profile: Reserve Bank of Zimbabwe

http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reserve+Bank+of+Zimbabwe

MicroCapital Universe Profile: Reefy

http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reefy

MicroCapital Universe Profile: Egyptian Financial Supervisory Authority

http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Egyptian+Financial+Supervisory+Authority

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/

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