Egyptian fintech unicorn MNT-Halan has secured another EGP 3.4 billion ($71.4 million) through a securitized bond issuance, further cementing its strategy of using debt to power its massive lending operations.

The deal, announced Monday, marks the seventh issuance for the company’s consumer finance arm, Halan Consumer Finance, and was managed by Commercial International Bank (CIB) and CI Capital. It’s the latest move in a pattern that has allowed MNT-Halan to scale rapidly by continuously converting its loan portfolio into fresh capital.

This issuance is part of a larger three-year, EGP 8 billion ($168 million) securitization program approved by Egypt’s Financial Regulatory Authority, indicating a clear roadmap of reliance on the debt market for funding.

The Debt Engine

Securitization has become the core of MNT-Halan’s funding engine. The process involves bundling its existing loan receivables — the money owed by its borrowers — and selling them to investors as bonds. This provides the company with immediate cash to underwrite new loans without diluting equity through venture capital rounds.

The latest $71.4 million bond was offered in five tranches with varying maturities, from six to 36 months, and credit ratings from MERIS (Middle East Rating and Investor Services) to attract a range of investors.

This deal follows a significant funding announcement in 2023 when MNT-Halan raised $200 million in equity and $140 million in debt, securing its status as a unicorn with a valuation exceeding $1 billion. That debt also came from two securitizations, signaling the model’s centrality to its operations.

Amr El Ganainy, Deputy CEO of CIB, noted that the issuance reflects the bank’s commitment to supporting Egypt’s consumer finance sector, which he described as a key driver of market activity and economic growth.

MNT-Halan began in 2018 as a ride-hailing app for two- and three-wheelers before pivoting into a comprehensive digital ecosystem. It now serves as Egypt’s largest lender to the unbanked, connecting customers, vendors, and micro-enterprises through a super app that offers lending, payments, logistics, and other services. This capital-intensive model requires a constant flow of funding to sustain its growing loan book, especially in an inflationary environment that boosts demand for credit.

A Familiar Fintech Playbook

MNT-Halan is not the only Egyptian fintech to master this strategy. valU, a leading buy-now-pay-later (BNPL) platform, has built its growth on a similar model. Since 2021, valU has raised EGP 12.3 billion ($246 million) through 15 separate securitization issuances.

This approach offers a significant advantage over competitors who rely solely on venture capital. By tapping into debt markets, companies like MNT-Halan and valU can access large, repeatable tranches of capital, giving them a stable funding source to outpace rivals, particularly in a constrained VC climate.

The success of MNT-Halan’s seventh issuance signals strong investor confidence in the quality of its loan portfolio. However, it also highlights the company’s deep dependence on a functioning credit market and the consistent repayment ability of its borrowers — a high-stakes model that has, so far, continued to pay off.