Sovereign Fund of Egypt, Etisalat Egypt launch Erada Microfinance
The Sovereign Fund of Egypt (TSFE) and Etisalat Egypt by e& have on Monday partnered together to launch a new company, Erada Microfinance that gives access to a wide range of financial services to SMEs.
Enabled by fin-tech, Erada has been granted a licence, providing it an access to a diversified set of innovative financial products for small and medium-sized enterprises (SMEs) to expand their businesses.
The partnership is in line with Egypt’s Vision 2030 of supporting financial inclusion and creating opportunities for the youth through providing innovative financial services and digitally enabled lending products.
The founders and shareholding structure of Erada in addition to TSFE and Etisalat Egypt by e& includes Amr Abouelazm, an industry veteran in the area of non-banking financial services who has also been appointed as vice chairman and CEO of Erada.
In Egypt, the number of beneficiaries who have received microfinance loans is on the rise, with a 46 percent annual growth rate according as of the end of September 2022, reaching approximately 35.5 billion Egyptian pounds, and 3.8 million beneficiaries. 60 percent of the beneficiaries were women amounting to 2.3 million, and 64 percent were youth.
Minister of Planning Hala al-Saeed, who is also chairperson of TSFE, said that the establishment of Erada is in alignment with the Egyptian government’s directives to facilitate SME’s access to financing and creating additional job opportunities for the youth.
The fintech-enabled businesses with strong financing facilities are supporting Egypt’s digital transformation and financial inclusion agenda across all vital economic sectors to achieve the 2030 Vision as well as the UN Sustainable Development Goals; SDG 5: Gender Equality; and SDG 8: Decent Work and Economic Growth, al-Saeed added.
Ayman Soliman, CEO of TSFE, said the launch of Erada is carried out through the Fund’s Financial Services and Fintech Subfund in partnership with Etisalat Egypt by e&, and Amr Abo El Azm.
This is in line with TSFE’s strategy of maximising value through establishing private sector partnerships and form an alliance with industry veterans, Soliman added.
He further said that having Etisalat Egypt as a partner enables Erada to immediately launch a full suite of innovative lending products that are catered to market and customer needs.
Egypt is well positioned for an immediate and full launch of its digital economy in line with TSFE’s Financial Services and Fintech Subfund’s strategy of creating value and returns across all sectors, notably the financial services and fintech sectors. The goal is stimulating economic growth and accelerating the transformation process through partnerships with strategic investors, Soliman concluded.
Hazem Metwally, CEO of Etisalat Egypt, said Erada will be managed through an independent board of directors.
Egypt’s investments have reached over 70 billion pounds in a span of 15 years, and Etisalat Egypt strives towards empowering MSMEs through access to finance and tech-enablement in the country through Erada given its TSFE partnership and the experts in the industry of non-banking financial services.
Metwally also stated that Etisalat Egypt aims to enhance the business sector and consolidate financial inclusion mechanisms to support the economic growth in line with Egypt’s Vision 2030. It is also in line with e&’s agenda, who services exist across 16 countries worldwide.
Amr Aboelazm, co-founder, CEO, and vice chairman of Erada, said the company is collaborating with the full ecosystem and beneficiaries including banks, corporates and entrepreneurs.
Aboelazm added that the company has finalised the requirements with the Egyptian Financial Regulatory Authority (FRA) and obtained the licence to operate in record timing.
With his extensive experience in managing non-banking financial institutions for more than 30 years, Aboelazm has held the position of chairman and CEO of Tamweely Microfinance, the co-founder and CEO of Tanmeyah for Microenterprise Services, prior to which he served as deputy director of the German Development Bank (KFW) in Egypt.