EFG Hermes Finance launched valU, its innovative consumer financing solutions arm, in 2017 as part of the platform’s efforts to diversify its non-bank financial services offering and capitalize on global trends shifting towards fintech solutions and increased smartphone adoption across Egypt. valU offers clients a range of convenient repayment options to purchase products and services with customized installment programs. With authorized capital of EGP 750 million and paid-in capital of EGP 175 million, valU is a pioneering fintech solution provider in the country, empowering customers to make purchases from over 35 product and service categories through more than 898 partner merchants across 3,500 retail and online stores as well as 134 websites. valU allows customers to make use of installment payment programs lasting up to 60 months and brings them a variety of offers across its retail and online network. The launch of the company additionally forms part of EFG Hermes’ wider strategy to promote nationwide financial inclusion, in line with national development strategies and global practices.

2020 Operational Highlights

On the operational front, valU made great strides throughout the year, capitalizing on new opportunities and providing an expanded scope of services, as usage increased during the lockdown imposed as a result of the COVID-19 pandemic. During 2020, valU witnessed three-fold growth, with the number of customers growing to more than 170,000 users and over 265,000 transactions in excess of EGP 1.5 billion as well as increased shopping limits amounting to more than EGP 2.2 billion. In addition, the company doubled its on-ground sales team during the year and established a tele-sales unit to allow for home visits to onboard new clients throughout the pandemic.

valU continued to expand on its partnerships throughout the year, adding several new key retailers to its roster, including Cairo Festival City, Majid Al-Futtaim, El Mawardy, Adidas, El Sallab, Oriental Weavers, and Huawei. In addition, the company renewed some of its existing strategic partnerships, including Apple retailers in Egypt, Samsung, IKEA, and e-commerce platform valU also successfully partnered with Le Marché as the exclusive financing partner for the 2020 edition of its exhibition, empowering customers to purchase furniture with convenient installment plans and 5% cashback. It has also expanded its e-commerce network to include Homzmart, Rush Brush, and Hapilin. The company also teamed with external partners including, 2B, Edfa3ly, Homzmart, and Carrefour to offer a number of promotions, including the valU Friday Mega Campaign, where customers could win a variety of prizes.

During 2020, valU also worked on expanding the scope of its product offering, embarking on service financing and establishing solid partnerships in the process. The company partnered with El Gouna International School and Dubai-based education provider, GEMS Education, to offer financing plans for K-12 education. valU has also ventured into the medical services sector, teaming up with a number of aggregated medical services database providers, including Salamtak, El Nada Hospital, and Rofayda, to provide installment programs for their services. Following the extension of its regulation by the FRA, valU additionally ventured into sporting club membership financing during the year, signing on a number of clubs including New Giza Sporting Club, to offer customers plans for new membership and renewal fees. Finally, valU has ventured into the food and beverages sector, partnering with a number of caterers like The Cookery Co. and Chef Sarhan. In addition, valU worked throughout the year to invest in its platform’s capabilities. The company integrated new features into the application, allowing customers to browse online and offline merchants as well as imbedding deep links to online merchants, redirecting customers to checkout using valU through their respective websites. Moreover, the valU app now offers an Arabic platform to ensure it serves a larger customer base and reaches out to new customer segments.

valU also introduced upgrades to the platform including increased capacity and performance to allow customers to conduct their transactions quickly and seamlessly as well as enhance overall customer experience. Furthermore, valU launched a new segmentation approach in July that helped understand customers' purchasing behavior and preferences. This along with enhanced communication tools allowed for a better user interface for valU’s targeted users, enabling us to introduce new notification features such as segmented push and in-app notifications, segmented geo-locations, as well as targeted in-app pop-ups. Sending out segmented campaigns has impacted the business positively, with the funnel conversion rate increasing 3% Y-o-Y.

COVID-19 Measures

With the onset of the COVID-19 pandemic, valU immediately adopted a work-from-home policy to ensure the health and safety of its employees. However, following the significant increase in transactions owing to the lockdown, the company moved to a 50% work-from-office rotation with all necessary precautions in place to account for the increased volume of activity and ensure business continuity. valU continues to operate this policy and regularly revises its business continuity plans to align them with all health guidelines and directives from relevant government authorities to ensure the wellbeing of its team.

valU additionally availed a number of new programs and waivers to support both clients and merchants through the duration of the pandemic. The company introduced a waiver of upfront and purchase fees for its Super Hattrick program for the months of May and June and extended its payment cycle to grant customers a grace period of approximately two months. valU further postponed installment payments for its Uber joint program with the Saudi Development Fund, which facilitates vehicle purchases for Uber drivers, requiring participants to pay the interest rate for a period of three months, with no further payments during the postponement period.

valU also introduced a new product called Waqty during the height of the pandemic to grant non-valU customers transactional credit with instant approval for e-commerce transactions without any documentation requirements. Waqty is the first online transactional approval product in the market, enabling users to pay a 20% down payment using their credit card and accordingly receive instant access to finance on their desired products and receive them at their doorstep. In addition, the company emphasized e-commerce in its merchant acquisition strategy, as well as when advising customers, with promotions through the application in addition to other communication channels in response to the lockdown with the aim of meeting consumer demand while promoting health and safety.

2020 Key Financial Highlights

valU’s total operating revenues (offsetting interest expense on bank facilities) hit EGP 111 million in 2020 compared to EGP 25 million in 2019.

2021 Outlook

In the coming year, valU will seek to expand on its e-commerce service offering, providing increased support to brick-and-mortar merchants seeking to develop their online presence, as well as increasing operational synergies and cross-selling opportunities with partners across the Group, including PayTabs Egypt and EFG Hermes Corp-Solutions. This will serve to provide value-added services to valU’s merchants by granting them access to immediate liquidity, largely through Corp-Solutions’ factoring arm, as well as supporting them in expanding their business ventures.

The company is also currently working on expanding into new sectors to broaden its service offering and meet the ever-evolving needs of its customers. A key sector of focus for valU is medical services, with the company working on securing laboratory services, radiology, and pathology to its existing roster. The company is currently in the process of finalizing a partnership with leading medical diagnostics solutions provider Integrated Diagnostics Holdings to this effect.

In addition, as the Egyptian government and the CBE issue more directives to promote financial inclusion, valU stands poised to capitalize on greater opportunities across the market, as trends shift towards fintech and digital platforms. This will serve to create more business for valU as well as allow the company to promote a cashless society, support increased financial inclusion, and foster sustainable development and prosperity across the country.

Finally, valU is currently introducing its online shopping platform “Shop'it”, where valU customers can purchase their desired products from their favorite vendors in installments, gaining access to multiple products from various categories all on one platform.

FY20 4Q20 4Q19
valU App Customers 91,000 23,000 20,630
Limits Activated Value (EGP mn) 1,224 372 250
Outstanding Portfolio (EGP mn) 832 832 362
Number of Transactions 196,000 69,000 26,645
Number of Auto Loans 13 1 4
Number of Merchants 898 898 485