Egypt’s Financial Regulatory Authority (FRA) is giving consumer finance companies and entities financing MSME enterprises two months to introduce one-time password (OTP) verification when customers enter into financing contracts and use their financing.

The new requirement gives financing companies and entities two months to complete the technical and regulatory changes needed to strengthen customer identity verification.

Why You Should Care

Egypt’s Financial Regulatory Authority (FRA) is adding another layer of identity verification to consumer and micro, small, and medium-sized enterprise (MSME) financing. Companies and entities operating in these activities will have a maximum of two months to introduce one-time password (OTP) verification for customers.

For customers, the measure is intended to reduce the risk of someone obtaining financing using another person’s identity or incorrect personal information. This aims to preserve the rights of individuals acting in good faith and prevent a negative impact on their credit. 

For financing providers, the decision means completing new technical and organizational requirements within a defined implementation window.

The Details

FRA Chairman Dr. Islam Azzam issued a decision requiring companies and entities licensed to conduct consumer finance and MSME financing activities to implement the requirements set out in FRA Board Decision No. 133 of 2026, which was issued in July.

The new decision, No. 2735 of 2026, requires the relevant companies and entities to complete the technical and regulatory procedures needed to implement the OTP requirements within two months at most. 

Under the rules, consumer finance companies, along with companies, associations, and institutions providing financing to micro, small, and medium-sized enterprises, must send an OTP to every customer, with the customer’s phone number being verified. The OTP must be sent when the financing agreement is concluded and again when customers use the financing. Providers must also retain proof of the OTP.

Moreover, incorporating OTPs into the customer identity recognition system contributes to early detection of any negative practices or manipulation when financing is being sought for consumer or productive purposes.

The system also intends to address cases in which an individual impersonates another person or submits incorrect personal information. This can help preserve the rights of individuals acting in good faith and prevent negative effects on their creditworthiness.

The Ripple

The decision affects more than the individual financing transaction. Financing companies and MSME financing entities will need to adjust their technical and organizational processes to meet the new verification requirements within the two-month deadline.

For the FRA, the additional verification step provides another mechanism for identifying potentially negative practices and manipulation earlier in the financing process. For customers, the stated objective is stronger protection against identity misuse and inaccurate personal information that could affect their credit standing.

The measure also reinforces the FRA’s broader approach to customer verification across Egypt’s non-banking financial sector.

What to Watch

The next milestone is the rollout of OTP verification across consumer and MSME financing within the two-month implementation period. The FRA’s broader objective is to strengthen customer data verification and give financing providers and the Authority greater ability to identify negative practices early. 

As the new system comes into use, stronger identity verification can support greater protection for customers and reinforce the trustworthiness of Egypt’s non-banking financial sector.