Nagat Mohamed was in dire straits. After sales at her clothes shop in Egypt’s Nile Delta plummeted, she took out a loan from a microfinance company to keep the business going — but did not earn enough to pay that back either.
To escape default, the 43-year-old entrepreneur turned to a traditional money-lending system known as a “gameya” — revived with a 21st-century twist as an app.
“It was a real lifesaver,” Mohamed said over the telephone. “I could not sleep because of the debts, but finding this app saved me and my children.”
Photo: EPA-EFE
A gameya is a type of community savings pool that also functions as a peer-to-peer loan system.
Members deposit a fixed, equal amount of money into a joint pot every month. At the end of each month, one person is awarded the full amount until everyone has had their turn.
While gameyas were long organized informally and offline, they are now being offered through apps in a tech transformation that is revolutionizing financing for Egypt’s cash-strapped female entrepreneurs.
One-fifth of all Egyptian workers are women, according to the World Bank, many of whom run their own small businesses or home-based initiatives.
That makes it hard to get a loan from banks, which require documentation proving a fixed salary or ownership of a shop.
Meanwhile, microlenders typically impose exorbitant interest rates of up to 40 percent.
Many online gameyas have no interest rates, and registration requirements are minimal: Just upload an ID, sign a contract in person and provide monthly income statements.
The apps also let members pay a fee to be among the first in line for a payout, thus letting them settle old debts quickly and avoid taking on new loans with onerous interest rates.
Mohamed turned to an online app called MoneyFellows to help her repay the 15,000 Egyptian pounds (US$955) that she owed the microfinance company for her shop.
“Two months ago, I finally paid my loan. I’m joining another money circle to grow my business and fund my daughter’s marriage,” the mother of three said.
Many of Egypt’s female entrepreneurs turned to the gameya model during the COVID-19 pandemic, which hit small enterprises hard.
Three-quarters reported a drop in business in 2020, and 9 percent had to shut down completely, a survey by the Egyptian Ministry of Planning and Economic Development found.
“People are showing growing interest in online savings systems, because they are simple, easy to use and come with meager interest rates,” MoneyFellows chief executive and founder Ahmed Wadi said.
The number of female entrepreneurs using the app has risen from about 20,000 before the pandemic to about 150,000, representing about 6 percent of its 2.5 million users.
On average, they take out loans of 12,000 Egyptian pounds.
Women make up one in three users of another app, ElGameya, typically seeking loans of about 15,000 Egyptian pounds.
“There was an already existing need for our business,” ElGameya founder Ahmed Mahmoud Abdeen said. “Women were already joining offline gameya apps or borrowing from their friends and families to pay their loans or grow their business. We only made life easier for them.”
Part of the appeal is the flexibility.
If ElGameya’s borrowers want to get their payout within the first four months of the lending circle, they pay a monthly interest rate of up to 9 percent, but if they accept a longer wait, the interest fees are waived.
Amal Abdel Aty, who owns a home utensils shop in the Nile Delta city of El Mahalla El Kubra, said she had been forced to borrow from her friends and sell some of her possessions to meet repayments on two loans she took from microfinance companies.
Her first loan was worth 10,000 Egyptian pounds at an interest rate of 24 percent over 18 months. When she could not pay it, she took out another 10,000 Egyptian pound loan.
“It was a huge burden on me and on my family,” the 40-year-old said.
Three months ago, she joined a 12,000 Egyptian pound lending circle at ElGameya and has already been awarded the full pot, allowing her to pay back the first microfinance loan.
“I will get into another round and hope that the other loan will be paid by the middle of next year,” Abdel Aty said.
Gameya loan apps are not regulated, but the central bank is working on a system of authorization.
The money-lending circles have a long history of boosting access to finances for marginalized communities, particularly in urban areas, said Yomna El Hamaki, a professor of economics at Ain Shams University.
There is also a religious element.
“In a Muslim society like Egypt, people usually prefer to register for gameyas rather than go to the banks or other financial institutions, which offer loans at interest rates that are considered forbidden by many Muslims,” El Hamaki said.
With economies squeezed by the pandemic, they have become an online lifeline for Egypt’s budding women business leaders.
“These apps are a buffer for many who got their financials adversely affected by the pandemic,” El Hamaki said. “It is better than loans or traditional gameyas because they provide easier, faster and trustworthy access to financing, especially for women who lack this.”
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
RSS