CBE sets procedures for establishing, licensing credit risk guarantee companies

The Central Bank of Egypt (CBE) has set out procedures for obtaining preliminary and final approval to establish and license companies seeking to engage in credit risk guarantee activities, as part of the regulations governing the sector. The rules establish specific timelines for issuing approval decisions, completing incorporation procedures, and commencing operations.

Under the regulations, companies seeking to engage in credit risk guarantee activities must submit an application to the CBE for preliminary approval to proceed with the licensing process, accompanied by the documents and information specified in the relevant annex.

The application will be submitted to the CBE’s Board of Directors, which must issue a decision within 90 days of receiving a complete application containing all required documents. The company must be notified of the Board’s decision within 15 days of its issuance.

The CBE requires companies that receive preliminary approval to complete their incorporation procedures within one year from the date they are notified of the approval. The deadline may be extended for a further equivalent period by a decision of the CBE’s Board of Directors.

Once the incorporation procedures have been completed, the company must notify the CBE, after which its headquarters and branches will be inspected following payment of inspection fees of EGP 100,000 for the head office and EGP 50,000 for each branch.

The company must also apply for final licensing approval within the deadline set for completing the incorporation procedures and submit the required documents.

The CBE’s Board of Directors will issue a decision on the final approval application within 90 days of receiving the required documentation in full. The company will be notified of the decision within 15 days of its issuance.

If final approval is granted, the licensing decision will be published in the Egyptian Gazette at the company’s expense, as well as on the CBE’s website. The company will then be entered into the CBE’s register of credit risk guarantee companies.

The regulations stipulate that a company may not begin conducting credit risk guarantee activities until it has been notified that final approval to operate has been granted and has been registered in the CBE’s register of credit risk guarantee companies.

A licensed company must commence operations within one year of the date of final approval. Otherwise, the licensing decision will be deemed void. The deadline may be extended for a further equivalent period by a decision of the CBE’s Board of Directors.

The CBE also requires the company to notify it at least one week before the actual date on which it begins operations.