Citadel getting into microfinance in Egypt

Citidel Capital, an Egyptian private equity firm with investments worth over $8bn, is launching a new microfinance company called Tanmeyah, the firm said today.

Tanmeyah, which will be controlled by a Citadel subsidiary called Finance Unlimited, plans to make loans to low- and middle-income entrepreneurs both in urban and rural areas of Egypt. Finance Unlimited will have a controlling 51 per cent stake in Tanmeyah, with the rest going to the company's management and Egyptian Gulf Bank, which will have a 24 per cent stake.

The people involved in Tanmeyah include a few veterans of microfinance in the Middle East: Amr Abouesh, who'd worked on a microfinance initiative with the Banque du Caire, Amr Abouelazm, who worked for the German Development Bank, and Hazim Medani, an alum of the Bank of Alexandria.

The company will start with 35m Egyptian pounds (Dh22.9m), and plans to open 15 branches in its first three months, with a goal of establishing 400 branches across the country. If all goes to plan, the company will have some 6,500 field officers by 2014. Loans will be between 4,000 and 35,000 Egyptian pounds, and the terms will be short: from four months to a year.

This strikes me as interesting stuff; it appears microfinance hasn't yet taken hold in the Middle East, despite the notable accomplishments of its pioneer and lead proponent, the Nobel-prize-winning Bangladeshi Muhammad Yunus. Will microfinance take off in the Middle East? I don't see why not.