Although Egypt’s banking sector has been one of the most thriving in the Arab countries, a huge part of its population still falls under the unbanked segment, and as a result, they have been deprived of almost any sort of financial services. But in January 2019, Sumair Farooqui and Karim Nour decided to change this reality, and provide nano financial services currently in the form of small loans to the unbanked and under-banked demographics in Egypt. Their solution was to create Egypt’s first nano lending mobile app, Kashat.
The FinTech and microloan solutions provider was founded to positively impact financial inclusion in Egypt, and the Arabic-speaking world at large, by providing accessible, seamless and productive financial services.
How Kashat Works
Kashat is currently available only in Egypt on Google Play and Huawei’s AppGallery, and it offers short-term loans between EGP 100 (~$6) and EGP 1,500 (~$95).
Who is eligible for Kashat’s micro-loan?
* Egyptians who are above 18 years old, with a valid national ID.
All the users need to do is:
1. Download the Kashat app
2. Sign up using their national ID card
3. Upload a selfie of themselves
4. Answer a few questions in the registration form to disclose their details.
The users are then provided with a limit (which goes up to EGP 1,500) if their profile is approved. They then have the option to apply for a loan. If approved, the user is given up to 6 hours to accept the offer. Once accepted, users can withdraw the cash from any Aman store shown here. The repayments can also be made at Aman stores and its third-party merchants. Kashat plans to add more payment and repayment options in the future.
Kashat charges its users an Annual Percentage Rate (APR) between 16 to 28 percent depending on the loan amount from the borrowers and also deducts a flat fee of EGP 8 in form of processing fees from total limit amount at the time of disbursing the loan. Users are allowed to pay back the micro-loans in 61 days over two equal monthly installments.
Like any other financial institution, Kashat reports their delinquent customers to Egypt's credit bureau. If a customer fails to pay their loan back to Kashat, they run the chance of damaging their credit standing with other future lenders. It also charges a late fee of EGP 3 per week with a maximum cumulative late fee of EGP 24 over 8 weeks for all loan amounts.
Funding of Kashat
In 2019, Kashat managed to raise $1M in seed funding round. In April 2021, Cairo Angels invested an undisclosed amount in the FinTech unique startup. Less than 6 months later, Kashat managed to raise $1.75 in a Bridge funding round, led by Launch Africa, with the participation of several regional investors including previous investor, Cairo Angels. The thriving microlender plans to utilise its newly acquired funds to further support and develop its platform, as well as expand its operations.
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