BNPL Offers On The Rise As Egyptians Contend With Record High Inflation
Buy now, pay later – or BNPL – has turned into a trend in Egypt. From vegetables to dental treatments, citizens have been using deferred payment methods to meet their needs.
The sector could grow by 52.3% this year, according to a Research and Markets report. The transition comes as the value of the Egyptian pound remains concerningly low.
While BNPL offers have been a lifesaver for the poor, they also allow wealthy Egyptians to maintain their desired social class.
Record Inflation Harming Purchasing Power And Country’s Economy
In Al Asher, a lower-income neighbourhood of the east Cairo district of Nasr City, Khaled Alaa has been selling fruits and vegetables on his own BNPL scheme.
“Most of my customers are women who live in or around the area. So I know where they live and if they don’t come and pay their debts, there is a direct way for me to reach them,” he said.
A record high inflation is diminishing people’s purchasing power. Unable to afford essentials, many have been using the BNPL offers or reducing expenses in other areas.
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After noticing a worrying decline in appointments and a growing reluctance to undergo expensive procedures, a dentist in Greater Cairo said he started offering deferred payments.
When patients who needed fillings would hear the prices, “they would just ask me to remove the whole tooth and get it over with, which is a cheaper procedure,” said Mohamed Hamed.
The dentist now asks for a copy of patients’ national IDs and for them to sign a proof of debt. The new business model has been working well for now, he added.
FinTech Companies And Financial Institutions Accept Changes
FinTech companies have also increased their operations significantly. ValU partners with local businesses to offer zero-interest payment plans on a variety of products and services.
Over the past year, the company has expanded its offerings beyond clothes and beauty products, now dealing with tuition fees, pharmacy bills and doctors’ fees.
Even the Central Bank of Egypt has adjusted the requirements for credit card applicants in order to allow them to borrow a larger percentage of their income than before.
