2020 saw no shortage of unprecedented events that had a resounding impact on business operations the world over. Yet despite the challenges, I could not be prouder of the strides our NBFI platform has achieved, delivering outstanding financial and operational results while continuing to generate value for our stakeholders. Through our diversification strategy and robust operations, EFG Hermes Finance has been able to weather the instability caused by the onset of the COVID-19 pandemic, while continuing to expand on its service offering and product portfolio with a full suite of non-banking financial services ranging from microfinance, leasing and factoring to consumer financing, mortgage, payment solutions and insurance. Collectively, the Group’s NBFI platform has successfully generated growth in excess of EGP 1.4 billion in 2020, an increase of 13% from the EGP 1.2 billion posted in 2019.
Building on the successes it achieved in the previous year, Tanmeyah continued to expand on its branch network, growing to a total of 285 physical branches with 335,000 clients served, down 7% from 2019. Additionally, the company embarked on the first ever securitization program issued by a microfinance provider, with the help of EFG Hermes’ Investment Banking team. The first tranche was disbursed in May 2020, amounting to a total of EGP 545 million, and was oversubscribed more than once. This overwhelming success attests to the strength of Tanmeyah’s portfolio, risk management capabilities, and the robustness of its operations. The company expects to launch the program’s second tranche upon the maturity of the first in the second quarter of the upcoming year.
During the year, EFG Hermes Finance consolidated its leasing and factoring arms into one entity, EFG Hermes Corp-Solutions, to offer its corporate and SME clients a comprehensive range of financing solutions and value-added services. The company’s leasing arm saw a 15% increase in its client base, with a number of new industries witnessing increased activity, including digital, education, healthcare, and real estate. Meanwhile, our factoring arm focused on expanding awareness of factoring facilities across the market, successfully leveraging the merger in order to offer more than EGP 819 million in factoring facilities for the year. Corp-Solutions’ merger successfully contributed a total of EGP 209 million in revenues to the NBFI platform.
valU, our consumer financing platform continued on the trajectory it had embarked on the previous year to expand its operations and engage an ever-growing base of users. During 2020, the company added a number of strategic new retailers to its roster of partnerships and continued to grow its client base. The year also saw valU venture into new sectors including healthcare, education, and sporting club memberships. At the same time, the company entered into a key partnership with EFG Hermes Corp-Solutions to offer valU merchants bespoke financing services as part of the platform’s strategy to uncover key cross selling opportunities throughout the Group. The success of the company throughout the year only serves to underscore valU’s drive to continually expand its service offering to add value to its stakeholders and empower them to meet their financial needs. Total GMV more than tripled during the year, and the company was able to turn profitable.
Our latest venture, PayTabs Egypt, is already well on its way to cementing its position as a leading payment solutions provider, offering unique selling points and making a number of strategic partnerships in its first year of operations. The company was able to capitalize on new market opportunities and venture into several new sectors including retail, tourism, hospitality, education, and real estate. Additionally, the company was able to launch a number of initiatives during the year targeting SMEs in line with national financial inclusion efforts. Additionally, a total of 300 new partner merchants were added for the year.
At the same time, we continued to build out our latest additions to the EFG Hermes Finance portfolio, our insurance and mortgage finance offerings. In 2019, we established Bedaya in partnership with GB Capital, to create a mortgage finance venture serving Egypt’s large, growing population of homebuyers. Later in the year, we deepened our partnership with GB Capital, entering into a definitive sale and purchase agreement to acquire a 75% stake in life insurance player Tokio Marine Egypt Family Takaful that was concluded in June. The year to come will see us continue to develop these arms as we work to offer clients a fully integrated service offering in the non-bank financial institution space and enhance our cross-selling abilities throughout the group.
Each of our companies has surpassed our expectations in terms of performance, innovation, and ability to overcome the most unexpected of obstacles, while capturing new opportunities and adapting to the external environment. Their performance and achievements throughout the year serve as the biggest testament to EFG Hermes’s adaptability and strength as an institution as well as to the ever-growing demand for non-banking financial services in the Egyptian market.
With the onset of the new year, and with it hopefully an end to the pandemic and improved market conditions, we are confident that our companies will continue to grow and innovate to generate increasingly valuable services to our clients and stakeholders. We look forward to the triumphs our subsidiaries will achieve in the coming year as they continue on their upward growth trajectories.
Walid Hassouna ,
Chief Executive Officer, EFG Hermes Finance
Group Head of Debt Capital Markets, EFG Hermes
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