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3 Innovation

EFG Hermes has always been a leader in terms of offering innovative solutions and products to its clients. The COVID-19 pandemic gave rise to a unique set of circumstances and challenges that offered opportunities for our teams to excel in several fields, particularly in terms of financial inclusion and digital solutions, not only in terms of products but also in terms of stakeholder engagement and outreach.

Extending our Reach: Financial Inclusion

According to research recently conducted by AmCham Research, more than half of Egypt’s population lacks access to basic financial services. This means that they are financially excluded from accessing opportunities to improve their economic circumstances. Concurrently, Egypt has one of the highest rates of mobile penetration in the world at 95%. With around 25% of the population in the 18-30 age group, this translates to a large segment with high digital literacy and a preference for cashless transactions.

Financial inclusion can support overall economic growth and the achievement of broader development goals including the SDGs, when provided responsibly and sustainably in a well- regulated environment. Since acquiring Tanmeyah Microenterprise Services in 2016, EFG Hermes has made financial inclusion a priority of its non-bank financial institution (NBFI) platform. In 2017, EFG Hermes decided to capitalise on its extensive know-how, local intelligence and regional leadership and launched valU, an innovative solution that gives customers the ability to use their smartphones to complete purchases from different merchants across Egypt and allows them to pay in convenient instalments over 3-24 months. In 2020, EFG Hermes added 2 exciting new fintech initiatives to its NBFI platform, EFG EV Fintech, the first financial technology-focused investment company in Egypt, and PayTabs Egypt, a B2B payment solutions company.

Building a Platform for Growth: EFG EV Fintech

EFG EV Fintech is the first financial technology-focused investment company in Egypt. Through its accelerator program in partnership with Falak Startups, it nurtures, supports, and empowers fintech start-ups and contributes to the development of the fintech ecosystem. Through its VC arm, EFG EV Fintech invests directly in promising seed and pre-series A level start-ups, providing them with higher ticket investment to help them reach Series A funding stage. EFG EV builds on the financial expertise of EFG Hermes and the entrepreneurial know how of Egypt Ventures to offer fintech start-ups strong support to improve their chances of success in their grow journey.

In addition to government partnerships, EFG EV has established a regional network of start-up accelerators and incubators from across the MENA region and over 25 partnerships with key industry stakeholders both locally and internationally to expand the outreach of its portfolio companies and help them compete on a regional and global scale. EFG EV has also made a prominent name for itself locally as a hub for entrepreneurial activity, having hosted, co organized and actively participated in 13 regional and global start-up conferences. Moreover, EFG EV has been selected by the EBRD as one of only two entrepreneurship support entities in Egypt to get their backing.

the MENA region and over 25 partnerships with key industry stakeholders both locally and internationally to expand the outreach of its portfolio companies and help them compete on a regional and global scale. EFG EV has also made a prominent name for itself locally as a hub for entrepreneurial activity, having hosted, co organized and actively participated in 13 regional and global start-up conferences. Moreover, EFG EV has been selected by the EBRD as one of only two entrepreneurship support entities in Egypt to get their backing. Three of EFG EV’s portfolio companies, XPay, PayNas, and Hood were selected as part of the most promising companies in the region by the Next 100 African Startup initiative, organized jointly by the IFC and The Ministry of Investment and International Cooperation.

Three of EFG EV’s portfolio companies, XPay, PayNas, and Hood were selected as part of the most promising companies in the region by the Next 100 African Startup initiative, organized jointly by the IFC and The Ministry of Investment and International Cooperation.

Towards 2030: Fuelling Growth through Financial inclusion

Many of the start-ups supported by EFG EV specifically target solutions for underserved segments of society such as microenterprises, gig economy workers, and freelancers with limited access to credit, information, or business support. They aim to fuel and drive the digital economy by developing solutions that are scalable, simple, adaptable, and innovative.

Boosting Inclusion: PayTabs Egypt

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In April 2020, EFG Hermes and PayTabs, an award-winning global fintech solutions provider, entered into a strategic partnership to launch PayTabs Egypt, a mass B2C and B2B payment acceptance and solutions provider.

PayTabs Egypt provides a cutting-edge platform to facilitate financial inclusion, catering to both the online and digital payment needs of multiple consumer segments in the country. It offers several innovative fintech solutions, payment-processing platforms and interoperable systems through a state-of-the-art hybrid digital payment platform that will enable one-click payments and comprehensive solutions for merchants and consumers alike. It also plans to step in to provide merchants and businesses with several progressive payment acceptance methods such as QR codes and payment gateways.

Creating Equitable Opportunities: Tanmeyah

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EFG Hermes Finance acquired Tanmeyah Microenterprise Services in 2016 and it has since become the Firm’s flagship company under its NBFI platform. Tanmeyah provides financing for micro and very small businesses across Egypt giving its thousands of clients access to the necessary capital to find a path out of poverty and grow their businesses. The company also offers products and services that complement the diverse needs of the microenterprise community, such as microinsurance. As part of its commitment to innovation, Tanmeyah officially rolled out its new digital collection via Damen in 2020. This will ease repayments for clients due to Damen’s nationwide accessibility with over 50k Points of Sale. Over 70% of Tanmeyah’s active borrowers are between the age group of 21-40, with women accounting for 47% of active borrowers. To further empower women running home-based businesses, Tanmeyah recently launched a new product, ‘Women in Business’ with USD 5mn in funding from the EBRD. Tanmeyah has consistently delivered superior results, thanks to its commitment to good governance, risk management, and community engagement.

Protecting and preserving trust

Tanmeyah’s corporate governance framework protects the interests of customers, employees, shareholders, and communities and drives value for stakeholders. The company complies with all laws and regulatory requirements and requires its employees to uphold the highest ethical standards.

Managing risk

Tanmeyah’s frameworks and policies help identify, manage, and mitigate risks through continuous risk monitoring and management. In-house training and policies foster a culture of risk management across the organization, making risk awareness the responsibility of every person who works at Tanmeyah, underpinning our growth, customer satisfaction, and loan security.

Growing communities

At the heart of Tanmeyah’s business model is helping some of Egypt’s most underprivileged citizens carve out better lives for themselves and, in turn, their families and their communities at large. In addition to serving clients’ financial needs, Tanmeyah helps them achieve their goals with guidance, training, and advice, hiring from within the communities and through extensive in-house training and career development, producing community leaders whose impact goes beyond just the clients we serve every day.

Driving Ambition:
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Mohamed Gamal, Blacksmith

‘I heard of Tanmeyah through relatives when I needed to buy equipment to expand my blacksmithing business. I’ve taken out two loans with them over the last four years and I intend on continuing to use their services to reach my ultimate goal of opening a factory.’

Um Amr, Dressmaker

‘I needed capital to buy raw materials for my shop. A friend told me about Tanmeyah’s loans, and I found the payment terms and interest rates reasonable. Without those loans, I wouldn’t have been able to buy a second sewing machine or grow my business.’

Maintaining our Edge: Advocacy & Engagement

EFG Hermes continuously engages with peers, policymakers, community members and regulators to promote good governance, responsible investing, and environmental and social stewardship.

World Learning Summit 2020 Digital

The World Learning Summit (WLS) is a small, well established international conference offering scholars, PhD students, entrepreneurs, and policymakers a space in which to present and discuss ongoing projects and ideas relating to higher education in the context of globalization and digital transformation.

In October 2020, Hanaa Helmy, CEO of the EFG Hermes Foundation and Head of CSR, was invited to participate in a WLS panel session on ‘Innovating Learning for Sustainable Societies’, a discussion on education’s digital future in the context of global sustainable development. Ms Helmy’s experience in education enhancement through integrated development in Upper Egypt brought considerable value and perspective to the panel.

SDG Ambition

The EFG Hermes CSR team has been chosen to participate in SDG Ambition, an accelerator initiative that aims to challenge and support participating companies of the UN Global Compact in setting ambitious corporate targets and accelerating integration of the SDGs into core business management. SDG Ambition enables companies to move beyond incremental progress and step-up

transformative change – unlocking business value, building business resilience, and enabling long-term growth. It also provides a forum for experience exchange and networking and is held in partnership with Accenture and SAP, and with 3M as Patron Sponsor.

SDG Pioneers

Each year, the UN Global Compact (UNGC) celebrates a group of SDG Pioneers — business leaders who are doing an exceptional job to advance the Global Goals through the implementation of UNGC’s Ten Principles on human rights, labour, environment, and anti-corruption. In 2018, Hanaa Helmy, CEO of the EFG Hermes Foundation and Head of CSR was selected as an SDG Pioneer in recognition for her work in integrated development and advancing the SDGs. Since then, she has been invited to be part of the Selection Group evaluating finalists for the SDG Pioneer selection process.

Virtual Investor Conferences

EFG Hermes has been organizing industry-shaping conferences over nearly two decades to global acclaim irrespective of market or global challenges. Most recently, the 15th edition of the EFG Hermes One on One Conference 2019 was shortlisted at the ICE Awards alongside a list of global companies for ‘Best Motivational Event’ and ‘Best Logistical Challenge of the Year’, underscoring the event’s importance in the industry today.

This year, COVID-19 pandemic circumstances forced the cancellation of our flagship One on One Conference. We immediately turned to our digitization team, who have been steadily implementing the Firm’s digital transformation strategy over the past few years. In June, we are proud to have hosted our first Virtual Investor Conference, bringing together executives from 72 companies in 14 countries with 480 institutional investors representing 160 institutions managing assets in excess of USD 15 trillion. Over the course of six days, 6500 meetings took place seamlessly on a digital platform moderated by EFG Hermes.

This inaugural Virtual Investor Conference continues EFG Hermes’ track record of hosting the largest FEM-focused events, providing an alternative venue for connecting global investors with opportunities across several regions. With the broadest reach of any such event in the Frontier Emerging Market (FEM) universe, the current turnout of attendees and presenting companies reflects the strong appetite of both global investors and local companies to explore potential avenues of growth in the coming period.

Building on the success of the inaugural conference EFG Hermes launched the 2nd Virtual Investor Conference in October. Attended by executives from 157 companies representing 25 countries will connect with more than 650

investors managing an aggregate USD 17 trillion in assets, the second edition was even more successful than the first, adding an even greater pool of institutional investors and a broader cross section of industries represented.

The success and turnout reflect not only EFG Hermes’ ability to hold leading FEM events despite prevailing global challenges but also underscore the strength of FEM markets and investor sentiment regarding their resilience in the face of headwinds.