It was announced today that a new microfinance company, Tanmeyah Micro Enterprise Services, will be launched in Egypt. Tanmeyah will target established small business owners and low to middle income entrepreneurs in both urban and rural communities although the focus will be on rural areas where access to financial services can be difficult. Start-ups will not be financed at this stage and businesses must have been operating for at least one year. The company will initially be capitalized at EGP 35 million (USD 6.2 million).

Tanmeyah will offer loans of between EGP 4,000 (USD 715) and EGP 35,000 (USD 6,200). The repayment terms will be between four months and one year. It is anticipated that 15 branches will be opened within the first three months of operation with a plan to grow to 400 branches. By 2014 Tanmeyah is expected to employ 6,500 field officers. It also expects to expand beyond microfinance into micro-insurance, brokerage services, money transfers and ATM machines in the future.

Finance Unlimited will own 51 percent of Tanmeyah, Citadel Capital will own 25 percent and the Egyptian Gulf Bank (EGB) 24 percent. The management team will comprise of Amr Abouesh, who lead Banque du Caire’s micro financing initiative, Amr Abouelazm, previously with the German Development Bank (KfW) and Hazim Medani, the former Chief Operating Officer at Bank of Alexandria. Tanmeyah is currently finalizing an agreement with the EGB to receive EGP 480 million (USD 85.7 million) for on-lending.

Recently a report and analysis of Arab Microfinance by the Arab Microfinance Network, Sanabel and MIX Market, the microfinance information clearinghouse, was released. 13 Egyptian microfinance institutions (MFIs) participated in this research which showed that these 13 MFIs served 666,300 borrowers and had a total loan portfolio of USD 116.5 million in 2008. 75 percent of these borrowers were women which was a decrease over the previous year.  A Paper Wrap-up with further details can be found on MicroCapital.org.  

Citadel Capital, a private equity firm based in Cairo, was established in 2004 and makes equity investments throughout the Middle East and North Africa. As at the end of March 2009 it had USD 8.3 billion of investments under its control.  Finance Unlimited currently works in Egypt and Sudan through the Sudanese Egypt Bank, Sphinx Egypt and Pharos Capital.  It is unclear when it was established or how much is invested. Finance Unlimited is one of 19 platform companies of Citadel Capital. The Egyptian Gulf Bank was founded in 1981 and is listed on the Egyptian stock exchange, trading as EGBE.  As at the end of 2008 it had Total Assets of USD 5 billion.

By Sally Levy, Research Assistant

Additional Resources:

MENAFN Press: Finance Unlimited establishes new micro-lending company in MENA

Citadel Capital: Home, Finance Unlimited

Egyptian Gulf Bank: Home

MicroCapital Story: Egyptian Gulf Bk to Launch Microfinance, Mortgage lending firms

MicroCapital Paper-Wrap Up: Arab Microfinance Analysis and Benchmarking Report, 2008 by the Arab Microfinance Network, Sanabel and the Microfinance Information Exchange, Inc. (MIX)

MIX Market: Egypt