Tanmeyah Begins Operating Branches of Microfinance Network in Egypt

Citadel Capital's Platform Company Finance Unlimited, along with an experienced microfinance management team and the Egyptian Gulf Bank, open Tanmeyah Micro Enterprise Services across Cairo and Egypt's Delta

Finance Unlimited today announced the first branch openings and start of operations at Tanmeyah, Citadel Capital’s microfinance platform. Tanmeyah in partnership with the Egyptian Gulf Bank opened 15 branches in the month of July and issued loans worth EGP 8,091,000 to 1,669 clients.

The company’s 15 branches in Cairo and the Delta presently employ more than 200 employees across seven of Egypt’s governorates. Tanmeyah expects to open 23 additional branches and grow its portfolio of outstanding loans to EGP 70 million across 19,000 clients by the end of 2009. Tanmeyah will ultimately employ as many as 7,000 loan officers and other trained staff.

“Microfinance is a complicated and labor intensive business and we’re pleased with a first month performance that beat internal expectations,” said Amr Abouesh, Executive Chairman of Tanmeyah. “Certainly productivity and operations in a project of this scale benefit from a learning curve. We’re in operational mode, we’re issuing the money and we expect that the numbers will only better as the organization and productivity develops.”

The micro-lending group is 51% owned by Citadel Capital Platform Company Finance Unlimited. Management holds a 24.3% stake, while the Egyptian Gulf Bank owns the remaining 24.7% share.

Tanmeyah is operated by industry veterans. Amr Abouesh, Executive Chairman, spearheaded Banque du Caire’s micro financing initiative and Hazim Medani, Tanmeyah’s Managing Director and Chief Executive Officer (CEO), was formerly Chief Operating Officer at Bank of Alexandria and Director of the bank’s restructuring programs. Amr Abouelazm, Deputy Chairman and Deputy CEO, was previously the Deputy Director of German Development Bank (KfW) in Egypt.

“Tanmeyah is an effort to scale and develop a unique core business model. We look to employ members of the communities where we’re present and train these individuals to locate and fund successful micro and small businesses that need capital to grow,” said Hazim Medani, Managing Director and CEO. “This model is different from other microfinance schemes — just like traditional commercial and corporate banks, we’re looking for things like cash flow, a proven business model, management competence and market potential.”

Entrepreneurs are required to have completed at least one year in their business cycle before qualifying for a loan, which means that Tanmeyah will not finance start-ups.

Loans are generally issued to qualified business owners within five days of credit approval with a minimum loan size of EGP 1,000 and a maximum of EGP 30,000. The nature of the microcredit model, with relatively low margins and small principals, requires short-term loans with a typical repayment cycle of four months to one year.

“One-person shops account for more than 50% of all enterprises and 17% of total employment in Egypt, according to Egypt’s Ministry of Finance,” said Ahmed El Houssieny, Managing Director at Citadel Capital. “This large, critical segment is a new sector for Citadel Capital but it fits into our strategy of building a local platform and expanding to new markets on regional and sector advantages. Capturing the significant potential in this overlooked market requires funding, expertise and experience, value that Citadel Capital and its partners deliver through Tanmeyah.”

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Finance Unlimited is Citadel Capital’s Platform Company holding a number of discrete investments in the regional financial services industry. The company currently has controlling stakes in the Sudanese Egyptian Bank and Pharos Capital, a Cairo-based investment bank and a top-five Egyptian brokerage with active alternative investment and asset management practices.

Citadel Capital is the leading private equity firm in the Middle East and North Africa. The firm focuses on building platform investments throughout the region in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has returned more than US$ 2.2 billion in cash to investors, more than any other private equity firm in the region.

For more information, please contact:

Ms. Ghada Hammouda
Head of Corporate Communications,
Citadel Capital (S.A.E.)

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