Tanmeyah Micro-enterprise Services is Egypt’s leading non-bank provider of microfinance solutions and the country’s second-largest microlender overall. The company caters to owners of micro and very small businesses across Egypt who lack access to financing from the traditional banking sector. The company provides a comprehensive suite of microfinance solutions that target high-need areas across the country. Tanmeyah extends credit of up to EGP 50,000 for micro-enterprises and EGP 50,000-EGP 100,000 for very small enterprises repayable up to 24 months. The company also offers micro-insurance products.

Tanmeyah helps its clients achieve social mobility and find a path out of poverty by giving them the capital they need to grow their businesses. Founded in 2009, the company is an active participant in the financial inclusion drive now being led by the Central Bank of Egypt and the nation’s Council of Ministers.

Operational Highlights of 2018

2018 marked yet another year of exceptional growth for Tanmeyah despite the high corridor rates maintained by the Central bank of Egypt throughout the year. Key to the business’ growth has been the consistent expansion of its national footprint, of its team of loan officers and support personnel, as well as the work of its newly constituted project and research teams.

Tanmeyah entered 2018 with the goal of opening 50 branches nationwide — and closed the year having opened 98, bringing its total branch network to 248 locations nationwide from Upper Egypt to Alexandria — or, as the company says, “from the Dam to the Delta” — in 25 of the nation’s 27 governorates (excluding North and South Sinai).

As when dealing with any unbanked population, risk mitigation is key to Tanmeyah’s business model — the challenge of microfinance is never finding borrowers, it is finding qualified borrowers and recovering loans with margins intact. The company’s technological infrastructure plays a key role here, but the secret to Tanmeyah’s success rests in its team of well-trained and locally experienced loan officers. With that in mind, the company grew its headcount as of 31 December 2018 to almost 4,000 people, up from around 2,400 the same time a year ago.

Sourcing and training personnel and ensuring quality portfolio outcomes amid such rapid growth in the team and in branch personnel were the key accomplishments of 2018 for Tanmeyah. Notably, the company’s average turnaround time was unchanged in 2018 at a maximum of three days — down from an average of 3.8 days at the start of 2017. That figure is by far the fastest turnaround time in the market and is only possible through Tanmeyah’s proven risk-management framework and its team’s on-the-ground knowledge.

The company’s portfolio bears this out, with a base of active borrowers growing from around 167,000 in 2017 to more than 290,000 in the year just ended. The company’s total loan portfolio grew at a slightly faster pace, standing at c. EGP 2.8 bn. The substantial growth in Tanmeyah’s loan portfolio was driven by a 26% increase in the average loan size along with a corresponding increase in average daily issuances.

Since inception, Tanmeyah has issued more than 1 million loans.

The project management and research teams at Tanmeyah, each of which was created in 2017, were core to the delivery of the business performance in 2018.The project management team led the growth of the company’s national footprint by ensuring the efficiency of the company’s operations across the board and by further developing the IT infrastructure to support the firm’s digital transformation.

In parallel, Tanmeyah’s research team researched and devised successful strategies to drive the business into three new segments:

  • Tuktuks: The research team’s studies resulted in Tanmeyah deploying some EGP 350 million in financing for small businesses that operate Tuktuks (three-wheeled auto-rickshaws that serve underprivileged and peri-urban areas not served by mass transport). Tanmeyah developed a significant footprint in this promising sector in 2018.
  • Micro-Insurance: Early exploration of this essentially virgin territory allowed Tanmeyah to package and sell micro-insurance products, with clients purchasing some 40,000 policies in the year ended.
Key Financial Highlights of 2018

Tanmeyah witnessed revenue grow of 125% y-o-y in FY18 with the company’s top line increasing to EGP 631 million in FY18 compared to EGP 280 million reported in the previous year.

2019 Outlook

Tanmeyah is looking to grow throughout 2019 in both its core segments and the three newer market opportunities identified (Tuktuks, micro-insurance, and group lending – the latter which was launched towards the end of 2018), leveraging its national network, world-class risk management framework, and well-trained staff of loan officers. Tanmeyah’s goal is to expand its relationship with existing clients through the offering of new products (seeking a larger share of their spend on NBFS) while simultaneously tapping new segments. In the process, management expects to grow beyond the boundaries that are perhaps more typical of a microlender.

Investment in technology will be key to this drive: The pace of technological and regulatory change have made it clear that technology is crucial to the future of the NBFS sector. Tanmeyah is actively developing the capacity to use real-time data intelligence that would allow it to integrate live data in targeting and loan decisions, the growth of its customer base, and the formulation of new products. The company is also initiating a comprehensive digital platform that will serve as a one-stop shop for all of its products and services. The emphasis in this respect is to change the business’ value proposition to one that is based on a total customer experience and positions Tanmeyah as the “brand of choice” across its target consumer base.