EFG Hermes Factoring, a subsidiary of financial services corporation, EFG Hermes, has received a licence to offer factoring services in the Egyptian market, further diversifying its product offering to large corporates and SMEs across Egypt.
EFG Hermes has allocated an initial EGP 250 million to operate the new venture, which falls under the umbrella of its non-bank finance platform, EFG Finance Holding.
“The new venture will leverage our liquid balance sheet and our growing relationships with financial institutions to build an optimal capital structure that is capable of meeting fast-growing demand for factoring services from both large corporates and SMEs alike. Venturing into the factoring space is yet another step in our strategy of diversifying our product offering,” said EFG Hermes Holding’s Group CEO, Karim Awad.
Factoring services provide businesses with a means to access financing through assigning future receivables or payables to a third party or a ‘factor’ at a discount. Factoring receivables/payables, including cheques, invoices and contracts among others, allows businesses to meet their immediate working capital financing needs and obtain liquidity to invest in future growth plans.
Fatma Lotfy, Chairperson of EFG Finance Holding, and Chairperson of EFG Hermes Factoring said the Egyptian factoring industry is fairly young with only a handful of players offering varying degrees of service depth and comprehension and EFG Finance Holding’s aim is to bring a comprehensive and high-quality suite of factoring services that address a critical financing gap within a few months of acquiring the licence.
EFG Hermes Factoring will be a subsidiary of EFG Finance Holding, which also includes valU for installment sales services, EFG Hermes Leasing and Tanmeyah, Egypt’s largest private microfinance provider.