The Egyptian Financial Supervisory Authority (EFSA) made many legislative amendments to attract foreign direct investment to insurance and financial leasing sectors during the last period. Sherif Samy, chairperson of the EFSA, said in an interview with Al-Borsa that the authority has contributed in attracting many companies, notably French AXA and Emirati Safety, to enter the Egyptian insurance sector. In addition, major financial leasing companies were established with Egyptian and international contributions. Samy added that direct investments in the financial services sector have a double-dividend impact, as they will increase the financial capacity of many other sectors, as well as their direct impact on the financial services sector. He continued that EFSA currently focuses on encouraging micro-financial leasing, financing, and insurance to reach the lower societal income segment. The authority also works on developing mortgage finance estimated at EGP 5-6bn, compared to deposits of EGP 2tr. He pointed out that EFSA is currently preparing the leasing and factoring law, as well as the insurance law, adding that the authority has sent the amendments of the insurance law's executive regulation to the Ministry of Investment. The authority also prepares the executive regulation of the movable collateral law, said Samy, adding that a number of laws were sent to the House of Representatives, notably the capital market law, and another law to make EFSA an independent body. He said that the financial leasing and factoring draft law will be set up for community discussion in the second half of September, and will then be sent after revision to the government in October. Samy believes that some Egyptian laws need to be amended, including the Public Sector Companies Law 203. This law stipulates that the resolutions made by the companies' general assembly be approved in the holding company, not in the General Authority for Investment (GAFI), which could be accepted only in case the company was closed. He continued that the companies should follow Law 159 after the offering in the stock exchange, so as to allow GAFI to approve their general assembly's resolutions. Samy said that the economic reform programme launched by the government "is not a dream" and it can be implemented, especially as the targeted growth rates have been achieved once before. He said that the initial public offerings (IPO) programme is scheduled to begin during the current fiscal year, and the IMF loan cannot be our only goal, especially since its success does not mean that we are on the right path. He noted that those are just tools, and that creating an attractive environment is more important. Sami said that many investments have come to the Egyptian market while others exited, pointing out that the weakness of incoming investments is due to the problems of the labour laws, the currency exchange rate, and the fairness of the tax system. These factors can fertilise the Egyptian investment soil and attract foreign investment. Sami commended Egypt's participation in many international forums, such as the G20 summit, saying: "The participation of Egypt in international forums on a regular basis is important, but numerous conferences and summits in Africa may be a more important destination for Egyptian exports, such as contracting and consulting services." Samy said that education in Egypt is suffering from a real crisis as a result of the shortage of schools and the high density of students in schools, as well as the large discrepancy between the services provided by different educational institutions. Samy noted that he discussed with former education minister Mahmoud Abu El-Nasr the use of leasing and mortgage financing in the establishment of a number of typical and distinctive schools through the revenues of those schools, without relying on the ministry's budget. However, it did not work out because of the ministerial reshuffle. He continued that the developed tools of the educational system are still available, and many local and international companies have the desire to cover this type of financing. Samy said that we can finance the construction of many government hospitals using the same mechanism, which will provide treatment for low-income people within health insurance and university hospitals. This system allows for directing the ministry's budget to the most needy people. EFSA has developed a large number of financial instruments, over the past three years, most of which are still forgotten. As the small companies have not issued any unclassified bonds yet, neither of the government agencies issued revenue bonds. Even though, EFSA has amended the rules to the issuance of securitisation bonds over the past two years, bringing it to 5-6 issuances annually. Samy praised the new financing instruments, noting that more than 75% of the global funding depends on the bonds, while the rest is covered by loans and other financing instruments.
