Egypt-based fintech unicorn MNT-Halan is on a path of consolidation. The startup, which offers microfinance and payment solutions, has raised $157.5 million in funding and is using some of that money to acquire Tam Finans, a fintech company to expand into Turkey. Tam Finans provides financing to micro-businesses and SMEs. It currently operates 39 branches in 26 cities across Turkey and claims a 40% market share in the country. The combined entity's loan portfolio after this deal will be “just under $1 billion”, according to Mounir Nakhla, CEO of MNT-Halan.
 

MNT-Halan

The exact financial terms of the deal have not been disclosed, but one component of the deal is over shares. Actera, one of Turkey's largest private equity firms, and the London-based European Bank for Reconstruction and Development (EBRD) are co-owners of Tam Finans MNT-Halan and both will be shareholders in MNT-Halan. MNT-Halan raised $400 million worth of shares and debt about 19 months ago, which meant the company was valued at $1 billion following a deal in which Chimera Investments took a 20% stake for $200 million. MNT-Halan has not disclosed its full valuation with this latest round, but says it is now valued at over $1 billion. According to PitchBook, Tam Finans has raised more than $30 million in funding since its inception, mostly through debt.
 

Mounir Nakhla, who co-founded the company with Ahmed Mohsen, co-founder and CTO of MNT-Halan, said in an interview with TechCrunch that the company started talks with Tam Finans about 18 months ago. The Egypt-based fintech saw Tam Finans as an ideal partner to expand its existing business and considered it a strong entry into the Turkish market. In addition to existing customers, there are also opportunities to acquire entirely new customers. In Turkey, more than 30% of the population is unbanked and this creates opportunities for many fintech startups. After the economic crisis in 2018, many fintechs, such as Tam Finans, emerged to offer financing to the unbanked segments in Turkey. These fintechs offer services in credit rating assessment, loan consolidation and alternative lending.
 

Features and Performance of Tam Finans

Tam Finans offers an alternative type of financing called “invoice factoring” for micro, small and medium-sized enterprises (SMEs). In this model, Tam Finans buys open invoices from businesses in exchange for cash in advance. The company has developed a credit rating system that can digitally approve and distribute credit and provides loans to more than 20,000 active businesses. In total, it has a loan portfolio of around $300 million.
 

MNT-Halan recently obtained a factoring license and plans to start operating in this field in the fourth quarter of 2024. To date, the company has distributed more than $4.5 billion in loans and served more than 7 million clients in Egypt. This figure marks a huge increase compared to last January, when it provided $2 billion in loans to 5 million customers. MNT-Halan currently identifies itself as the largest unbanked loan provider, offering loans of $1,000 on average.

Lending is MNT-Halan's core business and source of revenue, but it also has various other products such as consumer finance, prepaid cards, e-wallets, savings, payments, e-commerce, FMCG delivery and mobile POS payments. In April this year, the company launched a super app to bring all these services under one roof. Nakhla said he is most excited about the growth of the prepaid card product and the card is the next big innovation.