To cut defaults and fraud, FRA expands credit-rating requirements

The Financial Regulatory Authority (FRA) has ordered consumer finance companies to review customers’ credit scores from the Egyptian Credit Bureau (I-Score) before deciding whether to approve or reject financing. The decision will take effect in April 2027.

According to the FRA statement, the new decision, No. 2,863 of 2026, requires consumer finance companies to digitally verify data submitted by customers applying for financing and obtain a financial behavior score based on data provided by I-Score.

A source familiar with consumer finance at the FRA said I-Score will assign each customer a numerical score based on their previous credit dealings and repayment record. Financing companies will see only the numerical score, without details of the customer’s financial transactions or personal data.

The source, who asked not to be named, told Al Manassa that financial behavior analysis differs from the existing credit inquiry system, which helps companies determine whether a customer makes payments regularly and the extent of their credit obligations.

The new assessment will be based on the nature of the customer’s dealings in the financial sector, whether banking or nonbanking, their repayment record, the amount of financing they have received, and the nature of the goods or services obtained through financing.

The assessment could take into account, for example, whether a customer deals with banks or other financing institutions, whether they have outstanding obligations, and the nature of financing they have previously received. The source said the aim is to build a more accurate picture of a customer’s credit behavior and ability to take on new financing.

The source said financial behavior analysis does not involve tracking customers’ devices, monitoring their movements, or going to their homes to investigate them, stressing that such practices have no connection to the mechanism used by the credit information system.

The decision aims to reduce fraud against financing companies and lower customer default rates by informing applicants in advance about the nature of the screening procedures they will undergo when applying for new financing, the source said.

Last month, an international school owner in New Cairo obtained loans in students’ parents’ names without their knowledge. According to the Public Prosecution, he used copies of their IDs and documents bearing their signatures to secure 839 credit contracts worth 321 million Egyptian pounds (about $5.94 million), leaving the parents with debts they had not authorized.

The consumer finance sector is experiencing record growth. Total financing rose to about 96.3 billion Egyptian pounds (about $1.78 billion) in 2025 from 61.3 billion pounds (about $1.14 billion) in 2024. The number of licensed companies rose to 48, while more than 10.8 million customers used consumer finance over the past year, according to the FRA’s latest statistics.