In Egypt, credit cards are scarce. According to the Central Bank of Egypt, there are only 4.8 million credit cards to service Egypt’s population, which stands at 104 million; which means less than 5% of Egyptians have access to credit cards. The effects of the COVID-19 lockdown on the Egyptian economy resulted in greater demand for credit facilities, as consumer behaviour shifted towards buying goods with credit due to salary reductions, a rise in unemployment and underemployment, and an overall economic slowdown.
Due to this demand and a limited supply, individuals and businesses nationwide are unable to take advantage of trading opportunities and realise the full economic potential of the nation. This might harm the projections of the Egyptian economy- according to the IMF, Egypt is expected to become the second-largest Arab and African economy by the end of 2022.
Blnk is attempting to remedy this by providing consumers with access to credit at the point of sale. The startup has raised a total of $32 million in a combined pre-seed and seed funding round, which comprises $23.7 million in equity and debt funding as well as $8.3 million in securitised bond issuance.
The $12.5 equity round was led by Abu Dhabi’s Emirates International Investment Company (EIIC) and Egypt-based venture capital firm, Sawari Ventures, with participation from several prominent local and international angel investors. The debt funding of $11.2 million was secured from several leading local banks and the $8.3 million securitised bond issuance was underwritten by the National Bank of Egypt and Banque du Caire.
Founded in October 2021 by Amr Sultan and Tarek Elsheikh, Blnk has developed a digital lending platform that empowers merchants of all sizes to instantly underwrite and finance their customers’ purchases at the point of sale. Consumers only need a national identity card to access these finances, and in 3 minutes, they can purchase a wide range of products or services, including electronics, furniture, and automotive services, paying in instalments ranging from 6 to 36 months.
The fintech plans to use this funding to accelerate financial inclusion in underserved communities across the country, support further development of its artificial intelligence-powered lending infrastructure, and finance the company’s fast-growing portfolio of customers.
Blnk claims to have disbursed more than $20 million in loans since it launched last year by leveraging its vast base of merchant branches across Egypt. Consumers are not the only ones benefiting from Blnk, as merchants also boost their profitability via the transaction commission that Blnk provides.
Blnk’s mission of providing inclusive access to funding for Egyptian consumers is a step in the right direction for a growing economy and hopefully will support further growth and development.
Speaking about the plans for the new funding, Amr Sultan, co-founder and CEO of Blnk, said, “Our mission is to make it easier for more Egyptians to purchase the products and services they desire by offering inclusive and convenient consumer credit at the point of sale. We are delighted to have the backing of a great cohort of investors at an early stage in our journey. With their support, we believe we can drive financial inclusion in Egypt, as well as the wider Middle East and North Africa region.”
Joseph Iskander, Head of Investment at EIIC, said, “We are convinced that the Egyptian market and its startup ecosystem present a compelling opportunity for regional and international investors, and we are committed to identifying and investing in value-accretive businesses. We are pleased to partner with Blnk to drive financial inclusion and economic development in Egypt, and we look forward to working with the team to achieve their goals.”