Why the CBE and FRA are moving against Egypt’s BNPL boom

💸 In May, a warning from one of Egypt’s most senior bankers set off quite the needed conversation over how Egyptians finance their phones, fridges, and furniture. CIB CEO Hisham Ezz El Arab warned (watch, runtime: 5:08) that customers shut out of bank financing are turning to non-bank lenders at elevated rates despite weak repayment capacity, invoking the US subprime crisis: “A small spark can create something much bigger [...] where the collapse of a group of institutions dragged the rest down,” he said.

The BNPL genesis

The industry Ezz El Arab was describing didn’t exist a decade ago. Buy now, pay later (BNPL) financing arrived in Egypt in late 2017, when EFG Hermes seeded Valu with an initial EGP 250 mn investment. A spurt of growth soon followed — Valu tripled its customer base to 170k users by 2020. By the time it listed on the EGX in June 2025, it had logged over 9.2 mn cumulative transactions and held 25% of the consumer finance market.

MNT-Halan wasn’t far behind, reaching unicorn status in 2023. In June, the National Bank of Egypt’s investment arm, Al Ahly Capital, took an equity stake valuing the company at USD 1.4 bn — the first time a commercial bank bought into an non-banking financial institution (NBFI) as a shareholder. Valu and MNT-Halan — EGX-listed and bank-backed, respectively — are the sector’s biggest, most closely-watched names. A longer trail of relatively smaller — but equally utilized — platforms followed.

The sector-wide numbers explain why the warning resonated. Consumer finance extended by NBFIs — the category housing BNPL alongside installment and microfinancing lending — grew 57% y-o-y to EGP 96.3 bn in 2025, serving more than 10.8 mn customers, according to FRA data.

Trouble in loan paradise

Economists point to a specific mismatch, not just a growth rate. Financial expert Mohamed Abdel Moneim previously told EnterpriseAM that consumer finance apps have extended credit lines of up to EGP 250k to people earning monthly salaries of EGP 6k-8k — a gap he calls “unsustainable,” warning it risks exposure for borrowers.

The backlash isn’t just economic. Egyptian law firms report a rise in complaints over aggressive debt-collection tactics tied to consumer finance and BNPL products — incessant calls, contact with borrowers’ employers and family members, and pressure that crosses from lawful follow-up into harassment, according to a recent Lexology report. What makes matters worse: the same consumer can utilize several BNPL services. Globally, the practice, known as loan stacking, is well-documented.

The crackdown

So, what’s Om El Donia doing? The Central Bank of Egypt (CBE) kicked things off in April, we were told. Banks are now barred from granting or renewing credit facilities to NBFIs unless those firms are fully coded with the CBE and actively reporting to the Egyptian Credit Bureau (I-Score), with a three-month clock to unwind existing exposure to anyone who doesn’t apply.

The FRA followed in May with a public, three-tier blacklist for the sector; separate lists for unlicensed operators, entities with final convictions, and formerly licensed players hit with administrative measures. The point is to let customers check who they’re dealing with before clicking proceed. By late June, compliance came with a deadline attached. The FRA tied NBFI expansion to a clean compliance record, giving companies until 25 August to sort themselves out. Miss that, and they’re looking at an expansion freeze — anywhere from three months to three years, depending on how far out of line.

Know before you owe

Here’s the thing nobody tells you at checkout: BNPL was built for a specific purchase, not a lifestyle. The laptop you actually needed, the fridge that gave out — that’s the use case. The trouble starts when it becomes a running tab instead of a one-off decision. EGP 2k a month for a phone doesn’t feel too much like debt. Neither does EGP 250 for an air fryer. Each one, on its own, clears the “I can afford this” bar without much thought — that’s the entire design of the product. Add them up, though, and you’ve built a considerable debt. The math that makes each individual plan reasonable is exactly what makes the total invisible.

The fix isn’t complicated: Treat every new BNPL plan as a question about your total monthly installments, not just this one. If you can’t say what you’re currently paying across every provider combined, that’s the actual problem — not the fridge. These purchases have a way of sneaking up on you — and yes, that includes the pizza you opted to pay for later on Talabat.