Overview
Tanmeyah Microenterprise Services, Egypt’s leading microfinance solutions provider, is a pioneer in the provision of financing to lower-income, small and micro enterprise owners, allowing them to grow their businesses and in turn support their surrounding communities. The lender directs its financing toward high-need areas and individuals that lack access to traditional banking channels. It also offers products and services that complement the diverse needs of small businesses, such as microinsurance and group lending. Tanmeyah extends credit of up to EGP 50,000 for microenterprises and between EGP 50,000 and EGP 100,000 for very small businesses. In doing so, it seeks to empower the underserved segment whose successes fuel economic growth, provide pathways out of poverty, and improve local standards of living. Founded in 2009 and acquired by EFG Hermes in 2016, Tanmeyah has resiliently powered through local and global economic turbulence to regularly achieve growth and remain an active participant in the financial inclusion drive led by the Central Bank of Egypt (CBE) and the nation’s Council of Ministers.
Operational Highlights of 2019
2019 saw Tanmeyah fortify its operations by means of a four-pillar strategy that had the company cast a wider national net, renew physical and non-physical input structures, launch a comprehensive digital strategy, and continue to explore complementary ventures and services.
The year ended with 268 fully operational branches catering to the needs of over 360,000 borrowers in 24 of the 27 Egyptian governorates. The company’s steadfast expansion over the past two years has encouraged it to slow down to an incremental expansion in physical branches and redirect its efforts towards developing higher quality services that enhance clients’ experiences, turnaround time, and use of resources. Changes underway include bringing in state-of-the-art digital technology, primarily machine learning and artificial intelligence, to branches and online platforms, and increasing delivery channels to facilitate exchanges with clients.
Operational developments also led to a company-wide upgrade of physical and non-physical assets throughout 2019. By refurbishing old branches and replacing old equipment, it improved the efficiency of spaces and systems of communication for borrowers and loan officers. This naturally tied to the company’s ongoing digital optimization strategy, and helped it further streamline its operations within each branch and across its network. Tanmeyah also prioritized the creation of strong, informative public digital platforms, such as its company website and social media platforms, to digitally disseminate information to current and prospective borrowers.
The core of Tanmeyah’s recipe for success remained its reliable team of loan officers and support staff, now over 4,400 in number. The company’s expansion in 2019 required more human capital meshed with thorough coaching and training to minimize possible delinquencies, as best practices and risk management continue to dictate organizational development frameworks. Throughout the year, Tanmeyah’s top-tier team prioritized improving overall experiences and value provided to clients and in turn, contributed to a rise in client satisfaction, loyalty, and retention. It also reinforced the company’s research and development (R&D) department, the gateway to lucrative opportunities and segments, and alarm mechanism for high-risk operations.
Parallel to supporting R&D’s continuous quest for new market ventures in 2019, Tanmeyah revised the performance and potential of its newly launched segments. The light vehicles (tuktuk) segment, launched in 2018, succeeded in building a substantial portfolio in less than a year. Yet in light of market shifts and anticipated licensing changes, Tanmeyah chose to downsize its tuktuk portfolio until a reworked business model that integrates projected changes and stronger supply chain control is formulated and employed.
Tanmeyah’s microinsurance segment constitutes 100% of the industry in Egypt. Its policies, structured by an insurance underwriter to fit the company’s operational purposes, have seen impressive responses from clients in 2019, with over 94,000 policies sold. Tanmeyah is also the first to embed credit life policies in microfinance loans, stipulating full coverage of the outstanding balance in the event of a client passing away during the loan tenor. High voluntary interest in the product without promotions or targeted selling is a major indicator of the promising growth potential that the segment holds, which kindled new possibilities, currently being studied, such as extending policy coverage to disabilities, health, and death beyond credit life.
Group financing was another focus of the year as part of efforts to support women entrepreneurs and small business owners. Tanmeyah provides working capital to groups of very small enterprising women willing to pool their resources to finance their businesses. Loans from EGP 1,000 to EGP 5,000 were offered to groups of borrowers running very small family-owned businesses and cottage industries and who are willing to share the loan obligations.
In line with this, 2019 also marked the beginning of a new chapter in diversifying the company’s individualized services, reinforced through a funding agreement signed with the European Bank for Reconstruction and Development (EBRD) to empower female-led micro enterprises. Under the bank’s Women in Business (WiB) programme in Egypt, EBRD will disburse USD 5 million to Tanmeyah to boost financing for women-led enterprises, which remain an underserved segment in the nation.
Key Financial Highlights
Tanmeyah’s remarkable revenue growth led NBFI successes in 2019; the top line saw a 66% increase to EGP 1.05 billion from 2018’s EGP 631 million, prominently showcasing the company’s success during the year.