Digital companies in Egypt have a new source of funding relief as more money may soon be in circulation in their favour. A new decree to establish the Egypt Sub-Fund for Financial Services and Digital Transformation, affiliated to The Sovereign Fund of Egypt (TSFE), has been issued by Egypt’s Minister of Planning and Economic Development Hala El-Said. Among other things, the new fund will invest in a range of fields including: non-banking financial services; digital transformation; financial inclusion; and financial technology, including insurance services, insurance brokerage, mortgage finance, commercial factoring, microfinance, portfolio management, and financial investments.
Here Is What You Need To Know
- According to El-Said, the TSFE’s philosophy depends on the state’s plan to achieve comprehensive and sustainable development under the Egypt Vision 2030.
- Under the law, the new fund will be able to establish companies or funds and any other entities, or contribute to them in accordance with the objectives of the fund, inside or outside Egypt.
- The fund will be able to carry out all economic and investment activities, whilst also exercising all the powers vested in the TSFE.
- The decision made by El-Said, who also acts as the TSFE’s Chairperson, under Resolution No 7 of 2020 stipulates that a fully-owned TSFE subsidiary fund will be established.
- The fund would have an independent legal personality, and enjoy financial and administrative independence. According to the decision, the authorised fund’s capital stands at EGP 30m ($1.8 million), and its issued capital at EGP 500m.
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- The decision stipulated that TSFE pays EGP 125m ($8 million), upon the sub-fund’s incorporation into the fund’s bank account. The rest is paid in cash or in kind within three years from the date of its registration.
- The new fund also has the ability to borrow, obtain credit facilities, issue bonds, and finance instruments and other debt instruments. This comes in addition to buying, selling, renting, leasing, exploiting fixed and movable assets, using them and owning them, as well as lending or guaranteeing investment funds or its subsidiary companies, the minister said.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer