Tax Framework For Financial Securitization In Egypt

Securitization, also known as financial rights securitization, is an innovative financing tool that allows public and private institutions to obtain the necessary liquidity without the need for direct borrowing. This process is carried out by securitization companies licensed by the Financial Regulatory Authority (FRA) issuing bonds, the value and returns of which are paid from future cash flows allocated for this purpose, known as the "securitization portfolio."

How Securitization Works

The concept of securitization is based on converting long-term loans or financial rights into tradable securities on the stock market. This enables issuing companies to obtain the value of these assets immediately, enhancing their financial flexibility and enabling them to expand their operations or extend more loans without having to wait for installments to mature or incur additional costs resulting from bank borrowing.