FRA registers first debt collection companies under new framework

The Financial Regulatory Authority (FRA) has registered EGY SERV and Egyptian International as the first companies authorised to collect receivables for businesses operating in Egypt’s non-banking financial sector.

Their registration marks the launch of a new regulatory framework introduced under FRA Board Resolution No. 278 of 2025, which created a dedicated register for receivables collection companies.

Under the new rules, non-banking financial institutions will be prohibited from contracting unregistered collection companies once the compliance period expires on 22 July.

FRA Chairman Dr Islam Azzam said the first registrations represent a key step towards building an integrated supervisory framework for the receivables collection market. He said the new system is designed to improve governance, professional standards and confidence among market participants.

Azzam added that the FRA is continuing to update the legislative and regulatory framework governing non-banking financial activities, with the aim of supporting sector growth while safeguarding the rights of customers and other stakeholders.

The regulations set out clear requirements for companies seeking registration. Applicants must submit their articles of association, approved financial statements and evidence of previous collection-service contracts. The FRA is required to decide on completed applications within 30 days.

Companies must be established as commercial entities and must list receivables collection among their stated business activities. They must also have issued and paid-up capital of at least EGP 10 million, or its foreign-currency equivalent, and shareholders’ equity of no less than EGP 20 million.

Companies that fall below the minimum equity threshold may still qualify if they have operated in the receivables collection business for at least three years before applying. In all cases, equity must not be lower than paid-up capital.

Registration remains valid for three years and may be renewed for further three-year periods, provided that companies continue to meet the requirements and apply for renewal at least three months before expiry.

The framework requires registered companies to follow standards of integrity, transparency and professional conduct. Their role is limited to collecting receivables, and they are not permitted to undertake financing activities.

To strengthen controls over payment flows, the FRA has prohibited collection companies from depositing recovered amounts into their own bank accounts. Payments must instead be made through approved non-cash channels or by cheques issued directly in favour of the creditor.

The rules also require companies to protect client data and maintain its confidentiality, except where disclosure is permitted by law. Registered firms must submit semi-annual reports detailing business results, contracted entities, collected amounts and the payment channels used.

Non-banking financial institutions must provide customers with information on the collection companies they appoint, including how to verify collectors’ identities and access official communication channels. They must also track complaints and take corrective action where needed.

The FRA chairman may impose administrative measures on companies that breach the rules, including warnings, temporary suspension or permanent removal from the register.