Egyptian-American Enterprise Fund announces major investment in Sarwa Capital S.A.E.
Cairo, Egypt, November 31, 2015 – The Egyptian-American Enterprise Fund (“EAEF”) today announced that it has entered into conditional binding agreements to invest in Sarwa Capital S.A.E. (“Sarwa Capital”), a pioneer in consumer finance, leasing and securitization in Egypt. The transaction includes the injection of US$20 million of new capital to enhance the company’s capital base, in addition to acquiring some existing stakes giving EAEF a majority stake in the business.
This announcement is an additional step in EAEF’s primary goal to promote financial inclusion, create employment opportunities, and attract new foreign investors to the Egyptian market. EAEF’s announcement demonstrates its strong commitment to support investment in the Egyptian private sector and the Egyptian economy.
“Our partnership with Sarwa Capital will help us support an already-established and successful management team in growing their business. We are honoured to have the opportunity to assist Sarwa Capital in further expanding its financing base and product offering in Egypt,” said James A. Harmon, Chairman of EAEF, adding: “Only about 10% of the Egyptian adult population currently hold a bank account, and approximately 50% of Sarwa Capital’s client-base comes from outside the banking system. Sarwa’s core competencies lie in its ability to structure and organize credit extension in innovative ways that has helped expand the consumer finance market, including serving the previously unbanked population, which in turn is expected to strengthen the average Egyptian’s purchasing power. Sarwa Capital’s consumer finance business, small and medium sized leasing business, as well as mortgage business are all areas with significant room for growth. In addition, we believe that Sarwa Capital’s position as the largest issuer of debt securitizations in Egypt will pave the way for further deepening of the debt capital markets in the country. EAEF intends to bring its vast resources and network of best-practice expertise to support the current management team in addressing these exciting businesses.”
“It is our great pleasure to welcome the Egyptian American Enterprise Fund on board and we look forward to a fruitful and long partnership. We have found in EAEF a long-term partner that shares our vision and commitment to creating value by leading the development of retail and structured finance in Egypt. EAEF’s resources will be invaluable to us as we seek to grow as the largest player in structured financial services, in addition to complementary activities that serve both the banking sector and the debt capital markets,” added Hazem Moussa, Managing Director and co-founder of Sarwa Capital.
Ibrachy & Partners acted as the legal counsel to EAEF. Arab Legal Consultants acted as legal counsel to the management team and other minority shareholders.
Closing of the transaction is subject to the satisfaction of customary closing conditions.
About the Egyptian-American Enterprise Fund:
The Egyptian American Enterprise Fund (“EAEF”) is a United States government-funded private entity inspired by the Enterprise Fund model successfully developed in Central and Eastern Europe in the 1990s. Since the inception of the Enterprise Fund Program, over US$ 1.1 billion has been invested directly alongside US$6.9 billion invested by private parallel funds.
With an anticipated capital of US$300 million, EAEF is committed to promote financial inclusion, job creation and increase foreign and domestic investment in Egypt, with a broader target of long term sustainable economic development. EAEF’s primary mission is to stimulate the Egyptian private sector by providing access to investment and human capital, modern technologies as well as best business practices, while achieving financial profitability.
As part of its development mandate to increase access to finance and attract foreign capital to Egypt’s private sector, earlier in 2015 the Fund in consortium with Helios Investment Partners and MENA LTV Fund announced its acquisition of Fawry, an electronic payments platform. To date, EAEF has committed over USD 75 million in Egypt in 2015.
The fund is led by a board of directors that is primarily comprised of American, Egyptian-American and Egyptian nationals.
Further details on the Egyptian-American Enterprise Fund can be found at http://www.eaefund.org
The U.S. Agency for International Development administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide.
About Sarwa Capital Group:
Sarwa Capital is the leader in consumer and structured finance in Egypt. Through its well-known subsidiary Contact Auto Credit and its affiliates, the group has arranged consumer financing of over EGP 7.5 billion serving clients throughout Egypt with a wide distribution network and partner outlets.
Sarwa Capital has pioneered the securitization market in Egypt, having issued and arranged bonds totalling over EGP 7 billion since 2005, making Sarwa the largest player in the debt capital markets. In addition to financing the group’s originated business, Sarwa has been serving clients aiming to tap into the market and has developed a range of products catering to the debt capital markets.
Sarwa Capital is also planning on launching a number of innovative financial products over the course of 2016.