2019 marked yet another year of rapid growth for the Group’s NBFI platform, EFG Hermes Finance, with multiple new products added to our wide-ranging offering and our existing subsidiaries delivering solid financial and operational results across the board. Today, through a well-thought-out and ambitions diversification strategy, EFG Hermes Finance is able to offer its clients the full spectrum of non-banking financial services ranging from leasing, microfinance, factoring services to mortgage finance and insurance. The NBFIs platform reported yet another year of solid top-line growth for the year, growing 52% Y-o-Y to EGP1.2 billion in 2019 largely driven by Tanmeyah’s outstanding revenue growth, which rose 66% Y-o-Y in FY19 to break the one billion mark.
Leading the helm this year in terms of both financial and operational performance, Tanmeyah made significant strides over the year to deepen its presence in the market. Launched in 2009 and acquired by EFG Hermes in 2016, Tanmeyah Microenterprise Services is Egypt’s leading microfinance solutions provider. The company provides small businesses and individuals who lack access to traditional banking channels with the financing they need to grow their businesses and help develop their local communities. To complement its financing options, Tanmeyah also offers microinsurance and group lending services to ensure that its clients have access to all the tools they need to take their businesses to the next level. The company was the standout performer of 2019, delivering on its four-pillar expansion strategy and taking steps to embrace digital strategies to improve its service offering.
EFG Hermes Leasing, launched in 2015, is currently one of the market’s leading providers of leasing solutions and value-added advisory services with its growing pool of clients ranging from large corporations to SMEs. In 2019, despite changing regulations and intensifying pressure from its competition, the company was able to expand its total net portfolio to EGP 3.4 billion as at year-end 2019, and the number of clients served, which increased to 219 as of 31 December 2019 from 165 a year prior.
The Firm launched EFG Hermes Factoring in 2018 in response to a growing demand from businesses who were looking for immediate cash flow to meet their more pressing working capital needs. Despite adverse market conditions that drove multiple players to record losses during the year, EFG Hermes Factoring closed its first full year of operations posting strong operational and financial results, cementing itself as a leading player in the local industry. In the year to come, the platform is looking to merge its factoring and leasing functions to capitalize on the synergies inherent in their business models and provide clients with bespoke solutions catered to their size, industry, and growth targets.
valU is EFG Hermes’ innovative consumer financing solution, which offers clients customized installment programs and a multitude of convenient repayment to purchase products. In 2019, valU surpassed its targets for the year, delivering stellar operational and financial results hinged on a broadened product offering, merchant network, and geographic reach, and consistently growing its customer base and the number of transactions executed. Although only in its third year of operations, the incredible success the app has achieve thus far saw it recognized as the “Fintech Innovation of the Year” at the prestigious 2019 Seamless Awards in Dubai as well as the E-Commerce Summit Award for the Top Payment Solution in Egypt.
At the tail-end of 2018, EFG Hermes, in partnership with Egypt Ventures, launched Egypt’s first fintech-focused startup accelerator. EFG EV offers two separate investment programs providing financial support and advisory services to both seed-stage and early-stage startups and to more established later-stage startups. The company is well on its way to achieve its goal to invest in more than 30 startups by 2023 and bolster Egypt’s fintech ecosystem in the process.
Over the past twelve months, EFG Hermes Finance further diversified its product offering, adding two additional lines of business to its platform. In April, the Firm announced it had entered into an agreement with TMG, Egypt’s leading developer of premium master planned communities, and GB Capital, the NBFI arm of GB Auto, to create a mortgage finance joint venture serving Egypt’s large, growing population of homebuyers. Later in the year, EFG Hermes and GB Auto entered into a definitive sale and purchase agreement to acquire a 75% stake in life insurance player Tokio Marine Egypt Family Takaful. Under the agreement, EFG Hermes Finance and GB Capital will each own 37.5% of the company, which is set to offer individual and corporate clients a variety of solutions covering health and life insurance needs.