Investors update: Egypt sells 9.5% stake in state-owned telecom firm for $121 million

Egypt sells 9.5% stake in state-owned telecom firm for $121 million

Highlights

• Egypt sold a 9.5% stake in state-run Telecom Egypt Co., raising more than 3.7 billion Egyptian pounds ($121 million) in a signal to investors that the country is serious about implementing a sweeping economic reform program.
• The government sold 162 million shares in the telecommunications company, representing about a 9.5% stake in the firm, according to a filing to the Egyptian stock exchange reported by Bloomberg. 
• The shares were priced at 23.11 Egyptian pounds each, according to a separate filing. Egypt plans to offer a further 0.5% for company employees to buy.

Source: Bloomberg

Our Takeaway

Egypt is urgently seeking revenue by privatizing state-owned companies to fulfill upcoming foreign debt obligations that are due in a matter of months. This initiative is a component of a 46-month financial support package worth $3 billion, which was agreed upon in December – Egypt made a commitment to the IMF to reduce its presence in the economy and grant private enterprises a significantly larger role. Broadly, this move signals the North African country’s commitment to reducing government involvement and promoting private-sector participation, which could attract potential investors.

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Tiger Global-backed Axis launches digital payments platform for Egypt SMEs

Highlights

• Egyptian fintech Axis has launched its digital payments platform to the North African market after securing a license from the apex bank, the Central Bank of Egypt (CBE).
• The startup offers an open-loop mobile wallet, axisPay, which offers a digital banking alternative for small businesses and their employees.
• This is coming almost 18 months after the startup received an $8.25 million seed investment co-led by Tiger Global, Sawari Ventures, and Raba, with participation from Firstminute Capital and RaliCap; founders of Venmo, Rho Banking and Cred; and executives from Revolut and Plaid.

Source: Zawya

Our Takeaway

Across Africa, merchant acquisition is proving to be the “new” scramble for digital payments and services on the continent, which has an estimated $800 billion informal trade economy comprising more than 56 million micro, small, and medium-sized businesses. In Egypt, there are 8 million of those and they contribute to 80% of the nation’s $400 billion+ GDP, employing over 20 million people. These small businesses are heavily cash-based, with little access to online banking services, payroll processing, and working capital financing. To address this, a number of startups have sprung up, the latest in the news being Axis. 

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Jia raises $4.3m seed to boost small businesses financing in emerging markets

Highlights

• Jia has raised $4.3 million in seed funding, and an additional $1 million commitment for on-chain liquidity, in a round led by early-stage backer TCG Crypto.
• A blockchain-based fintech providing loans to micro and small businesses in emerging markets, the startup offers loans to borrowers, who receive tokens after repayment, that they can later redeem at a rate agreed upon based on Jia’s profits. 
• The fintech plans to use the funding to double down on its operations in Kenya, and the Philippines, before exploring new markets in West Africa, Latin America, and Asia.

Source: TechCrunch

Our Takeaway

Jia, along with other fintech companies, is dedicated to addressing the access-to-finance gap that hinders business growth in markets such as Africa. Current data reveals that small enterprises constitute 90% of Africa’s businesses, yet they encounter a significant financing deficit of $330 billion. These businesses are burdened with the need for collateral and must fulfill various time-consuming requirements to secure loans from traditional lenders. Fintech startups like Jia are taking proactive measures to fill this financial void and provide the necessary support.