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Expanding Microfinance Products in Egypt

Tanmeyah is a microfinance institution (MFI) in Egypt that extends loans to local micro-enterprises. Tanmeyah is in the midst of a 5-year plan to expand its portfolio three-fold, including by introducing new products such as very small enterprise (VSE) loans to cater to slightly larger enterprises. Tanmeyah requested FSVC’s assistance in refining and marketing its VSE loan product. It also requested help in enhancing its risk management policies and procedures in order to comply with Egypt’ new MFI law.

FSVC met these requests by organizing two separate consultations with Tanmeyah. During the first, which ran from April 19-23, 2015, FSVC volunteer experts Christian Johnson (Managing Director, Emerging Markets Finance) and Robert Baidoo (an independent financial consultant) helped with issues related to the VSE loan product. During the second, which took place from June 7-11, 2015, FSVC volunteer experts Robert Rout (President, BankNet Consulting) and Angie Sharma (Senior Compliance Examiner, U.S. Federal Deposit Insurance Corporation) assessed and advised on risk management issues.

During the April project, the FSVC volunteer experts met with Tanmeyah senior management and VSE product managers to discuss their strategic plan, Egypt’s microfinance market and the VSE loan product. The volunteer experts then conducted a gap analysis to compare the VSE product to international best practices, and outlined recommendations to improve Tanmeyah’s VSE loan product. As a result, Tanmeyah is in a stronger position to enhance the market segmentation and marketing for its new product, and adjust its internal policies,
procedures and human resources (HR) to support it.

During the June project, the FSVC volunteer experts reviewed the requirements of Egypt’s new MFI law with Tanmeyah senior management, and identified and assessed cross-cutting risk themes and monitoring parameters with risk, audit, finance and HR department representatives. The FSVC volunteer experts then presented their recommendations on how to enhance current risk management policies and procedures in line with international standards and the MFI law.

As a result, Tanmeyah received a set of tools and techniques to use to identify and mitigate credit, operational, market, interest rate and liquidate risks.  Properly structured loan products from Tanmeyah, that are compliant with the MFI law, will provide MSMEs access to new loans to buy  equipment, hire personnel or make other investments to expand their businesses, and thereby contribute to the overall economic prosperity of Egypt.