Contact Credit becomes first licensed consumer credit company in Egypt

Contact is a pioneer in consumer finance in Egypt, having launched the first dedicated consumer finance platform providing automotive credit to consumers in 2001, and growing to become the largest provider of auto credit in the market, offering financing under various structures for new and used passenger cars and trucks. Contact and its subsidiaries offer a range of consumer financing services including mortgages, home finishing and furnishing financing, consumer durable credit, as well as commercial financing through its affiliates Contact Leasing and Contact Factoring. In total Contact has provided consumer financing, excluding mortgages, of EGP 20 billion with an outstanding portfolio of over EGP 5.5 billion at the end of 2019.

Earlier in March, the Consumer Credit Act was enacted, representing an important milestone in the development and formalization of the large and wide-ranging non-bank consumer financing market. Sarwa and Contact have long been supportive of efforts to organize the industry, including the financing infrastructure, the debt market, and ultimately, the new legal framework. The new law comes to light as a result of a sustained and methodical process adopted by the FRA over the course of several years and which involved all stakeholders in the market.

Hazem Moussa, Chairman of Sarwa Capital, commented: “We are thrilled to receive our newly issued license for our largest operating business of consumer finance, bringing all of our financial activities under the FRA’s regulatory umbrella. The new Consumer Credit Act comes as a culmination of years of efforts led by the FRA in what we believe was an exemplary process to formalize a large and growing industry.”

With this license, Contact Credit will be governed and regulated by the Consumer Credit Act no. 18 of the year 2020 instead of the Companies Act no. 159 of the year 1981, and will legally be authorized to operate as a non-banking financing entity regulated by the FRA rather than a trading entity. The change brings a number of structural benefits to the company, its partners and its large and growing client base, with a more efficient legal environment helping promote both opportunities and transparency in the consumer credit market.