Egyptian Fintech startups ease Consumer lending

Consumer lending continues growing

The Egyptian economy has been showing signs of recovery after a prolonged recessionary period, featuring major devaluation of the local currency and high inflation rates. After reaching a high in 2017, the inflation rate has since been easing downwards, with unemployment rates also falling and real GDP growth rising, helping to restore confidence in the country’s economic development.

Goverment Regulations help reduce Bank's Credit Risk Exposure

The government has been trying to regulate consumer lending to ensure stability in the financial industry. Among the new regulations was one stipulating that the total instalments of a personal, car or a non-mortgage housing loan must not exceed 35% of the client’s monthly net income.

Digital Fintech to empower peer-to-peer lending

Fintech start-ups in Egypt have been leading the way in terms of innovative digital platforms related to customers’ borrowing behaviour. Most of these platforms are providing peer-to-peer lending opportunities.

Non-Banking channels to remain key challenge

Given the attractiveness of short-term financing, card lending is expected to register the strongest growth, along with other personal lending, over the forecast period. While card lending is still in its development phase, with consumer concerns about interest-bearing financial products limiting growth opportunities in a largely Muslim-populated country, banks are expected to offer optional revolving facilities to consumers and attractive interest-free introductory offers to boost card uptake in the country.

Vision 2030 looking to drive financial inclusion in Egypt

Economic indicators look relatively positive for the forecast period, with continued real GDP growth and stable, if still quite high, unemployment and inflation rates. A driving force for consumer lending growth could prove to be the government’s “Vision 2030” programme, which includes provisions for Egypt to become a regional pioneer in terms of digital payments as it looks to significantly boost digital financial inclusion among the local population.

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Source : Euromonitor