MNT-Halan Consumer Lending Expansion Tests Profit Recovery Amid Egypt’s Economic Pressures

Egypt’s economy grew approximately 4.7% in the second quarter of 2026, according to the Central Bank of Egypt’s October 29 assessment. Household expenses continued rising despite slower overall inflation.

Housing, water, electricity, gas and fuel prices increased 24.1% year-on-year in October, while actual housing rents rose 27.7%. High borrowing costs added to the expenses facing consumers.

MNT-Halan is increasing consumer lending while reducing its exposure to higher-risk small and medium-sized enterprise loans. Its November financial results showed a sharp improvement in quarterly profit, although earnings for the first nine months remained below the previous year’s level.

The company is expanding consumer finance at a time when household repayment capacity and the cost of funding new loans remain important financial considerations.

MNT-Halan listed on the Egyptian Exchange on October 20 at EGP24.50 per share. Its first reported results following the listing give shareholders an opportunity to assess the shift in lending strategy.

The company’s ability to maintain its profit recovery will depend on credit losses, financing expenses and how much of its earnings comes from recurring lending operations rather than income from transferring loan receivables.

Egypt’s Consumer Finance Market Expands Despite Higher Interest Rates

The Central Bank of Egypt raised its overnight deposit rate to 20% and lending rate to 21% on October 29, increasing both by 100 basis points.

The decision followed renewed concerns about global energy prices, imported inflation and tighter international financial conditions. Annual headline inflation stood at 13.9% in September, but the central bank maintained restrictive monetary policy to contain further price increases.

Egypt’s Financial Regulatory Authority (FRA) reported EGP96.3 billion in consumer financing during 2025, an increase of 57% from EGP61.3 billion the previous year.

Approximately 10.8 million beneficiaries received financing, while 48 licensed providers operated in the market. The figures establish substantial growth in non-bank consumer lending before the October 2026 interest-rate increase.

Consumer finance companies disbursed EGP9.21 billion in February 2026, up 43.8% from EGP6.40 billion a year earlier. The number of customers financed increased 56.2% to approximately 1.18 million. Outstanding balances reached EGP71.9 billion at the end of February, compared with EGP47.6 billion in February 2025.

The FRA introduced additional credit-reporting requirements in September, directing consumer finance companies to establish real-time connections with the Egyptian Credit Bureau, I-Score.

The arrangements cover loan approvals, disbursements, repayments and changes in credit status. Stronger customer authentication requirements were also introduced to address unauthorised borrowing and credit fraud.

On November 12, the regulator extended its suspension of applications for new conventional consumer finance and microfinance licences until October 11, 2027. Applications for new fintech-based consumer finance companies remain suspended until February 2027. Existing licensed operators can continue providing credit, while prospective entrants face restrictions on obtaining new authorisations.

The October interest-rate increase raises questions about future lending costs rather than establishing that consumer finance charges have already risen. Providers rely on different funding arrangements, and the rates charged to borrowers depend on individual credit terms.

The latest available FRA figures confirm strong growth in financing volumes and outstanding balances, but they predate the October monetary tightening and cannot establish how borrowing demand or repayment performance has responded.

MNT-Halan Shifts Lending Toward Consumer Finance

MNT-Halan disbursed EGP13 billion in consumer financing during the first nine months of 2026, an increase of 42% year-on-year. Consumer loans represented 29% of its EGP48.1 billion gross loan portfolio at September 30, compared with 23% a year earlier. The overall loan book increased 14%, with consumer finance accounting for a growing proportion of outstanding credit.

Microfinance remained the company’s largest lending segment, representing 39% of the portfolio. SME financing declined from 33% to 29% as MNT-Halan reduced its exposure to higher-risk business borrowers.

Management has also prioritised smaller SME loans over larger individual exposures. Higher-risk SME lending accounted for 15% of third-quarter disbursements, compared with 25% a year earlier.

Total disbursements reached EGP34.5 billion during the nine months, up 9%. Active borrowers increased 14% to 1.4 million. Outstanding individual loans rose 24% to EGP33.3 billion, while the business loan book declined 3% to EGP14.8 billion.

The company did not separately disclose how much of the consumer finance increase came from new borrowers, larger loans or repeat borrowing.

Monthly customer retention in the Halan Card segment reached 51% in September, up from 45% previously. The card supports purchases and instalment financing through MNT-Halan’s payment network.

The company attributed part of the improvement in retention to card adoption but did not provide a separate breakdown of consumer financing generated through the product.

Bank facilities and receivable transfers support MNT-Halan’s lending operations. At September 30, the company reported EGP27.6 billion in credit facilities and total debt of EGP27.9 billion.

Restricted cash declined to EGP6.7 billion from EGP8.3 billion in June after MNT-Halan replaced part of the cash collateral supporting transferred receivables with bank guarantees.

Of the EGP48.1 billion gross loan portfolio, EGP22.9 billion remained on the company’s balance sheet at September 30. The wider portfolio includes receivables transferred through securitisations and other financing arrangements.

Further consumer lending growth will require continued access to these funding channels, alongside the bank facilities supporting the company’s operations.

MNT-Halan’s Profit Recovery Faces Shareholder Scrutiny

MNT-Halan’s third-quarter revenue increased 15% from the preceding quarter to EGP5.433 billion, according to its November 2026 financial results. Net profit rose from EGP399 million to EGP836 million, lifting the net profit margin from 8% to 15%.

Profit was nevertheless 31% below the EGP1.213 billion recorded a year earlier. Earnings for the first nine months declined 11% to EGP1.746 billion.

Income from transferring loan receivables reached EGP2.346 billion during the quarter, up 17% from the previous three months. MNT-Halan transferred EGP6.8 billion in loan principal and reported an income-to-principal ratio of 34.3%, compared with 28.7% a year earlier. Nine-month income from these transactions increased 51% to EGP6.899 billion.

The company has adjusted its receivable transfer arrangements, selling shorter-term repayment portions to debt investors while retaining later payments. Its reported offloading profitability rose to 37.9% during the first nine months from 26.3% in 2025.

The yield on loans retained on its balance sheet declined from 47.7% to 30.3%, partly reflecting the revised arrangements and earlier interest-rate reductions.

Financing expenses declined 26% quarter-on-quarter to EGP1.017 billion, while the net cost of funding fell to 18.2% for the nine months from 23.7% in 2025.

Expected credit losses and write-offs increased to EGP490 million in the third quarter, against EGP477 million in the preceding quarter and EGP260 million a year earlier. Other income included EGP279 million from the waiver of an intercompany loan at a subsidiary outside Egypt.

Non-lending revenue increased from EGP895 million in the second quarter to EGP1.384 billion in the third. Card transactions reached EGP36.8 billion during the first nine months, while outstanding customer investments totalled EGP4.6 billion. MNT-Halan also introduced digital brokerage and factoring services, although separate net profit figures for these activities were not disclosed.

MNT-Halan began trading on the Egyptian Exchange on October 20 at EGP24.50 per share. Its initial offering involved 320 million existing shares, representing 20% of issued capital, and attracted subscriptions exceeding the shares available.

A subsequent capital increase raised EGP4 billion in new equity. The proceeds were not included in the company’s September balance sheet, and their contribution to future earnings will depend on subsequent deployment.

Receivable transfers remain an established source of income for MNT-Halan, but their profitability depends on transaction terms and the cost of financing retained loans.

The third-quarter results also benefited from lower funding expenses and the EGP279 million loan-waiver gain, while credit-loss charges increased.

With nine-month earnings still below the previous year’s level, shareholders have yet to see whether the expanding consumer finance business can deliver a sustained improvement in underlying profitability.

MNT-Halan’s Lending Growth Faces a Profitability Test

The Central Bank of Egypt is scheduled to review interest rates on December 17, following its October increase of 100 basis points. The bank has set an inflation target of 7%, plus or minus two percentage points, for the fourth quarter of 2027. Higher energy prices, international financing conditions and domestic fiscal measures remain risks to its inflation outlook.

MNT-Halan has approximately EGP13 billion in equity following the EGP4 billion capital increase completed through its public offering. Management plans to support further consumer lending and payments expansion with the additional capital. The company has not disclosed how much will be allocated to individual lending products or when the funds will be deployed.

Securitisations and receivable transfers provide funding for MNT-Halan’s lending operations. Their earnings contribution depends on the prices investors pay for transferred receivables and the financing costs attached to loans retained by the company.

Further interest-rate increases could affect those terms, while higher impairment charges would reduce the returns generated from new lending.

The next financial statements will establish whether consumer finance is contributing more to net profit after funding expenses and credit losses. Returns on equity will also become important following the capital increase.

MNT-Halan has recovered quarterly profitability, but its investment case remains dependent on maintaining lending margins and controlling credit losses as its consumer finance business expands.