Egypt’s MNT-Halan says Turkish acquisition to help expand consumer credit, factoring

Egyptian microfinance lending and payments company MNT-Halan’s recent purchase of Turkey’s biggest nonbank micro-leasing company will help develop its factoring business in Egypt while expanding consumer credit in Turkey, its chief executive said.

MNT-Halan, Egypt’s first unicorn – or privately held venture capital company worth more than $1bn – said the purchase was possible only after the Egyptian government’s $35bn sale in February of the Ras El-Hekma development on the Mediterranean coast, which helped stabilise government finances.

After the sale, Egypt signed a $8bn financial support package with the International Monetary Fund, which included allowing Egypt’s currency to move according to market forces.

The Turkish acquisition, Tam Finans, operates through a network of 39 branches and has more than 40 per cent of the Turkish micro-leasing market as measured in total customers served, CEO Mounir Nakhla told Reuters.

MNT-Halan used most of the $157.5m in finance it had secured the previous week to complete the purchase. It also turned over between 5 per cent and 10 per cent of its shares to Actera, the Turkish private equity group that owned most of Tam Finans.

“They have a very deep experience in factoring, which we currently do not do, but we’re about to get the (Egyptian) licence next month,” Nakhla said, referring to transactions where the finance firm provides immediate cash in exchange for invoices.

“So they will add value to everything to do with factoring in Egypt.”

Nakhla said Tam Finans, with a loan book of $300m, has focused on lending to small businesses, whereas MNT-Halan, with its loan book of $600m, has built up experience providing credit to mostly unbanked consumers.

The Turkish firm’s average loan is 82 days, while MNT-Halan’s is 18 months.

MNT-Halan plans to use its expertise to introduce its electronic wallets, which are popular in Egypt, to the Turkish market. It has also bought a bank in Pakistan and is issuing loans in the UAE.

The company is also eyeing the Saudi Arabian and South African markets.

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