Tanmeyah Microenterprise Services, Egypt’s pioneer in microfinance solutions provider, offers financing solutions to lower-income, small, and micro enterprise owners to support their business goals and growth aspirations. Established in 2009, the company was acquired by EFG Hermes in 2016 as part of the Firm’s efforts to grow their NBFI platform. The company is focused on offering its solutions to businesses located in high-need areas, wherein individuals typically lack access to support from traditional banks, with a view towards promoting financial inclusion and offering support to the development of these communities. In addition to financing solutions, Tanmeyah offers a range of complementary services to support small businesses including microinsurance. The company extends credit facilities of up to EGP 50,000 for microenterprises and between EGP 50,000 and EGP 100,000 for small businesses. Tanmeyah’s operations and strategic objectives not only serve to contribute to the CBE’s efforts to promote nationwide financial inclusion, but also offer underserved segments of the population the support they need to launch their businesses, allowing for community development, increased economic growth, and an improved standard of living.

2020 Operational Highlights

Tanmeyah witnessed a robust start to 2020, leaving the company poised to build on the successes it had witnessed in the previous year. During the year, Tanmeyah further expanded its branch network, adding 14 extra branches in 2020, bringing the total to 285 branches across the country. The company’s total number of employees increased by over 650 throughout the year, bringing total staff to 5,075 employees. At year-end 2020, Tanmeyah’s total number of clients had reached over 346,000 and the company’s portfolio reached EGP 3.1 billion. Although the onset of the COVID-19 pandemic posed challenges to Tanmeyah, the company was able to quickly regroup and carry forward with its strategy for the year. These expansions and operational successes attest to Tanmeyah’s solid operations and the team’s tireless efforts throughout the year, even in the face of a challenging and uncertain global environment.

Although there are several healthy and uninterrupted funding sources available to Tanmeyah, diversification of funding sources continues to be a key priority for the company to allow it to achieve its strategic objectives and grow its operations unhindered. As such, Tanmeyah securitized a portfolio of EGP 545 million, the first tranche of an EGP 3 billion program, making it the largest securitization transaction amongst microfinance companies in Egypt. Tanmeyah received a Prime1 (sf) credit rating in spite of the outbreak, a reflection of its exceptional crisis management stemming from its rebound following Egypt’s 2011 revolution. Launched in May 2020, the transaction was oversubscribed by several banks.

Upon the onset of the COVID-19 pandemic, Tanmeyah’s management team issued a set of guidelines prioritizing the health and safety of employees. In parallel, the company worked in the early months of lockdown to increase its technological capabilities to offer the team the necessary systems and infrastructure to work from home. In addition, the company employed several measures to support the team and ensure their health and safety. It provided facemasks and sanitizers on site and decreased physical employee presence to 25% capacity. In addition, the company offered 4,500 antibody tests beginning in early April for early detection among Tanmeyah employees, which worked to manage the spread of the virus across the company. Tanmeyah additionally implemented a policy to cover employees’ medical and treatment expenses with regards to the pandemic. To provide around-the-clock medical care, the company worked with its insurance providers to offer support and create a nationwide database of medical professionals across the country as well as set up a separate dedicated phone line to answer queries from employees seeking medical advice.

During 2020, a key priority for Tanmeyah was to invest heavily in its technological infrastructure, both as the company sought a smooth transition to remote working and as a means of streamlining its operations. The data science unit supported its digitalization efforts, helping Tanmeyah make use of key data with ease through its dashboards, resulting in optimizing operational synergies across the company.

The year was not without its challenges for the company, however, with sales slowing down as a result of the lockdown. In addition, the company adopted IFRS 9 early in the year, which predicts risk using expected credit loss. This caused Tanmeyah to approach its risk management prudently, focusing on collections rather than sales throughout the year. As the company adapted to the challenges of the year and stabilized its risk, it resumed its focus on issuance, with sales picking up in 4Q20.

To alleviate financial burden of its customers, the company offered a partial payment or extension program on installments due. The offers were valid for April, May, and June as the company choose to follow the FRA directive to banks extending a six-month postponement to installments to support the company’s stakeholders, benefiting a total of over 85,000 clients.

Throughout the year, Tanmeyah launched two new products after reassessing its product portfolio. It introduced its Women in Individual Lending program, which extends loans to individual women seeking to launch or expand their home-based businesses. This followed a decision to halt its Group Lending program launched in December 2018. Tanmeyah also formed a partnership with tricycle manufacturer Pullman in August to offer facilities in Assiut, as a pilot phase. This program comes following the end of the tuk-tuk light vehicle program previously in place by the company. On the microinsurance partnership front, Tanmeyah continued to perform well, selling more than 103,000 policies during the year, a 10% Y-o-Y increase.

During the year, Tanmeyah also focused heavily on its market positioning. The company primarily used channels such as social media as well as traditional marketing campaigns to strengthen its corporate image and increase its customer base. In mid December, Tanmeyah launched a one-month TV and radio campaign. Tanmeyah developed a CRM module for its in-house call center and outsourced additional call center agents to tackle the higher traffic on its hotline.

Key Financial Highlights

In spite of the challenges posed by the local and global environment, Tanmeyah saw increased revenue growth during the year, posting a total of EGP 1.1 billion, a 3% increase from the EGP 1.05 billion recorded at year-end 2019.

Forward-Looking Strategy

In 2021, Tanmeyah will seek to further enhance its technological capabilities, with the end goal of completely digitizing its operations. The company has already taken steps to launch this strategy, disbursing handheld devices to many of its loan officers, with more expected to follow in the coming year.

In line with its commitment to promoting financial inclusion, the company entered into a partnership with Damen, a leading e-payment network to offer payments through their points of sale. Early phases of the partnership were launched in December 2020 across 26 branches with a full roll out to all Tanmeyah branches expected by January 2021.

Tanmeyah will also seek to expand its footprint by venturing into a number of sectors. In addition, the company will seek to leverage new regulations for microfinance providers allowing them to work with SMEs to diversify its offering and develop a range of products tailored to their needs, cementing its position as a pioneer in the microfinancing space.