According to Daily News, From the womb of crisis, opportunities are born. The consumer finance sector, the active player in the current circumstances, benefited from the high inflation in Egypt.
The country’s core inflation rate rose to 24.4% year-on-year in December 2022, from 21.5% in November.
High inflation is always associated with a weak purchasing power of consumers, which has increased the demand for consumer financing services during the last period.
According to the Financial Regulatory Authority’s (FRA) report for November 2022, the number of clients in consumer financing activity increased by approximately 109.4% compared to the same period the previous year, bringing the total number of clients to 2,546 in November 2022, up from 1,216 in November 2021.
The report also showed that consumer finance companies provided financing of about EGP 26.84bn during the first 11 months of 2022, compared to EGP 15.157bn during the same period in 2021, with a growth rate of about 77.1%.
According to Mohamed El-Fike, co-founder of the Sympl platform, which specializes in Buy Now and Pays Later services, inflation has increased demand for goods, but a lack of supply causes the incompleteness of a large number of operations, and the biggest challenge currently is the supply of goods.
He added that the existence of the financial culture of the consumer is essential, especially since a lack of awareness can cause the customer to stumble, and the regulatory authorities have added more safety to the customer by regulating the relationship, which regulates financing relationships for more than 6 months.
According to international reports, he estimated the annual growth rate of the consumer finance market at between 30 and 35%, pointing out that the financial supervision estimated the market size in the first year of regulating the activity at around EGP 7bn, confirming the market’s large size.