EFG Hermes entered into a binding agreement to acquire 76.7% of Tanmeyah Microenterprise Services SAE, according to EFG Hermes’ press statement Tuesday.
The statement said the EGP 345m transaction will see EFG Hermes acquire a 70% stake owned by Qalaa Holdings’ Finance Unlimited subsidiary; in addition to acquiring a portion of the shares held by Tanmeyah’s management, representing an additional 6.7% of the company.
Following the acquisition, the closure of the transaction is subject to regulatory approvals including the consent of the Egyptian Financial Supervisory Authority (EFSA) as well as the satisfaction of certain conditions precedent.
The transaction is valued at 100% of Tanmeyah, at EGP 450m. Qalaa Holdings currently has an effective ownership of 70% in Tanmeyah, according to Qalaa’s press statement Wednesday.
EFG Hermes Group Chief Executive Officer Karim Awad said the acquisition comes as the first in a number of strategic moves that EFG Hermes intends to undertake in the next 12 months and that will put in place the foundation for the firm’s growth over the next five years.
Chief Executive Officer of EFG Hermes Finance Wael Ziada said Tanmeyah is a unique opportunity for EFG Hermes given its national-scale branch network, well-established procedures and systems, and track record of lending in a highly under-penetrated market.
Ziada said the acquisition of a majority stake in Tanmeyah fits with EFG Hermes’ well-publicised strategy of growing our finance platform.
Tanmeyah was established in 2009 and provides financial services to Egypt’s largely underserved micro- and very-small-enterprise tiers. Qalaa Holdings Chairman and Founder Ahmed Heikal said Tanmeyah had EGP 509m in outstanding loans to 108,000 active borrowers at the end of 2015. The company has more than 1,500 employees at 114 branches across Egypt and has served more than 365,000 clients since its inception.
“Tanmeyah is the latest in a series of divestments for Qalaa that also includes Misr Glass Manufacturing (MGM), Rashidi El-Mizan and ASEC Minya,” he said.
Tanmeyah is a fast-growing provider of comprehensive microfinance solutions to business owners across Egypt.
It offers financial services and promotes financial inclusion through micro-enterprise lending and very small enterprise lending as well as payment solutions available through its extensive branch network.
The company’s microenterprise lending service provides working capital finance to both formal and informal small businesses in the range of EGP 4,000 to EGP 30,000 per loan.