Valu, the Egyptian consumer finance company that operates under a fintech licence from the country’s Financial Regulatory Authority, closed its fiscal year 2025 with gross revenue of $106m — up 71% on the prior year — and net income of $15m, an increase of 81%. Transactions across the platform more than doubled to 8.7 million. These are creditable numbers for any fintech. For one operating in an economy that spent much of the past two years dealing with a currency devaluation, elevated inflation, and a series of aggressive interest rate moves, they are particularly notable.

The company also announced it had received final regulatory approval from the Central Bank of Jordan to begin operations, with $7m in minimum capital already deposited and a local management team appointed. That announcement will lead most coverage of these results. It probably should not.

The more significant development in the FY25 report is buried in the product mix data: Valu’s core Buy Now Pay Later product — the installment financing tool that built the business — fell from 69.65% of total transaction value in FY24 to 54.16% in FY25. In its place, a prepaid card that did not exist at scale two years ago now accounts for nearly 19% of the business and is growing faster than anything else in the portfolio. Valu is, in effect, transitioning from a lending company into something that looks more like a payments business. Whether that is a deliberate strategy or a consequence of product success is a question the earnings release does not fully answer.

What Valu actually does — and why the product shift matters

Valu offers Egyptian consumers a way to pay for goods and services in instalments without needing a bank account or credit card. Its primary product, known internally as ‘U’, works through a network of over 9,000 merchant partners: a customer walks into a store — an electronics retailer, a furniture showroom, a travel agency — and finances the purchase through Valu’s app. Valu assesses the customer’s creditworthiness using its own machine learning model, approves or declines the application, and disburses payment to the merchant. The customer repays Valu in monthly instalments, either with or without interest depending on the promotional structure.

This model has a structural constraint: it only works where Valu has a merchant relationship. That limits both the addressable transaction base and the frequency with which customers use the product — you don’t buy a refrigerator every month. Transaction frequency per customer in FY24 was 9.1 times per year. It is now 16.6 times, an 82% increase. Something has changed.

That something is the Prepaid Card.

The Prepaid Card: a credit facility in your wallet

Valu launched its prepaid card just over a year before the close of FY25. The product works differently from the core BNPL offering. Once a customer has an approved Valu credit limit — determined through the standard underwriting process — they can transfer some or all of that limit directly onto the card as a spendable balance. The card then works like any other prepaid card: it can be used at any merchant that accepts card payments, anywhere in Egypt, including online, at point-of-sale terminals, and at ATMs for cash withdrawals.

The card solves BNPL’s oldest problem: it only works where the lender has relationships. The Prepaid Card works everywhere.

The commercial implication is significant. Where the core BNPL product ties Valu’s distribution to its merchant network, the card removes that constraint entirely. Valu extends credit once — at onboarding — and the customer then uses that credit across an unlimited set of merchants and transaction types, most of which Valu has no commercial relationship with. The customer brings Valu into every purchase, not just the ones that happen to take place at a partner store.

The numbers reflect this. The card’s gross merchandise value — the total value of transactions processed through it — grew 179% in FY25 to $98m. The number of activated cards doubled to 265,000. Spend transactions grew 210% to 3.94 million. Average daily spending on the card reached $268,000, up from $95,000 the year before.

The 2.6-to-1 ratio of spend transactions to top-up events is telling. Customers are not loading the card for a single large purchase and depleting it. They are topping up and then transacting repeatedly — using the card as a daily payment instrument rather than a one-off financing tool. ATM withdrawals, added during the year, now account for 9% of total card transactions, and e-commerce use grew from 26% to 29% of spending. Both categories indicate that the card is embedding itself into routine financial behaviour.

Sha2labaz, an earlier Valu product that served a similar off-network use case — allowing customers to convert their credit limit into cash for purchases outside the merchant network — has effectively been made redundant by the card. Its share of total GMV fell from 4.26% to 1.69% in a single year.

The core product is still growing — just not as fast

To be clear about what the product mix shift does and does not mean: the ‘U’ BNPL product is not in decline. Its GMV grew 20% year-on-year in absolute terms, from $238m to $283m. It still accounts for the majority of the business. What has changed is its relative position in a portfolio that is expanding in multiple directions simultaneously.

Shift, Valu’s auto loan product — which finances vehicle purchases over longer tenors — grew GMV 78% to $63m despite what the company describes as a difficult two years for Egypt’s automotive sector, driven by import restrictions and currency instability. Ulter and Loans, which cover higher-value purchases such as premium goods and large personal loans, grew GMV 190% to $26m, helped by the digitisation of Valu’s underwriting process for large-ticket items. Customers can now receive approval for these products directly through the app using only a national ID card, replacing what was previously a partially manual process.

The co-branded credit card, offered in partnership with Bank NXT under an underwriting-as-a-service arrangement — where Valu provides the credit scoring engine and the bank provides the regulated card product — grew financing volumes 322% to $43m. Valu’s earnings release describes this arrangement as a ‘blueprint for upcoming integrations with additional financial institutions’, suggesting the company intends to license its underwriting capability to other banks, which would generate fee income without requiring Valu to expand its own balance sheet.

A revenue model that is changing under the surface

One detail in the financial data that received little attention in early coverage of these results: the proportion of Valu’s financed volume that carries interest fell from 72.8% in FY24 to 67.6% in FY25. In a year of strong revenue growth, this initially seems contradictory.

The explanation lies in how BNPL economics work. When Valu offers a customer a zero-interest instalment plan, it is typically the merchant — not the customer — who pays for the financing, in the form of a discount fee charged by Valu for enabling the sale. As Valu runs more zero-interest promotions to attract customers and increase transaction velocity, the interest income from customers declines but the merchant discount revenue increases. Merchant discount revenue grew 81% in FY25 to $22m and now accounts for roughly one fifth of total gross revenue.

The net effect is a business that is reducing the cost of credit to end customers — making the product more attractive — while shifting more of the revenue burden onto merchants who have a commercial incentive to participate. This is a deliberate competitive strategy, not a margin problem. Whether it remains sustainable as Valu’s negotiating position with merchants evolves is a question the data does not yet answer.

Valu is reducing the cost of credit to customers while making merchants pay more. It works — as long as both sides keep showing up.

Net Interest Margin — the spread between what Valu earns on its loan book and what it pays to fund that book — expanded sharply in FY25, from 10.8% to 15%. This was largely a consequence of timing rather than product strategy: Egypt’s central bank cut its benchmark interest rate by 725 basis points across the year, reducing Valu’s funding costs, while the rates locked into longer-term loans issued in prior periods remained unchanged. The weighted average tenor of Valu’s loan book extended from 16 to 17.5 months during the year, meaning the high-rate assets will continue to generate returns for longer even as new borrowing becomes cheaper.

How Valu funds itself — and why that is harder to copy than it appears

Valu does not fund its lending primarily through deposits, as a bank would. Instead, it draws on a combination of credit facilities from 26 commercial banks and non-bank financial institutions — totalling $293m in authorised limits at year end — and a securitisation programme that allows it to sell packages of consumer receivables to institutional investors in the capital markets.

Securitisation, in practice, works like this: Valu bundles together a portfolio of consumer loans — say, $10m of instalments due over the next 18 months — and sells that portfolio to a special purpose vehicle, which in turn issues bonds backed by those loan repayments. Institutional investors buy the bonds, Valu receives cash immediately, and the credit risk transfers off Valu’s balance sheet. The investors are repaid as customers repay their loans.

Valu completed seven securitisation transactions in FY25 alone, raising $116m. Its cumulative total is now 20 transactions worth $378m since inception. Additionally, it executed discounting and offloading transactions during the year that generated $78m in cash through non-recourse sales — meaning the buyer of those receivables, not Valu, bears the credit risk if customers default.

This funding structure has a property that balance sheet metrics do not capture: it creates a track record. Institutional investors who participate in securitisation programmes require years of performance data before they will price a new issuer’s receivables at competitive rates. Valu, with 20 completed transactions, is the established benchmark for Egyptian consumer finance receivables. Any new entrant to the market would need to build a comparable track record before accessing equivalent capital market pricing — a process that takes years and cannot be accelerated with money alone.

Jordan: the real question is what it proves

The Jordan expansion — final regulatory approval secured from the Central Bank of Jordan, $7m in minimum capital deposited, offices secured, management team in place — is the announcement most likely to generate press coverage. The investment is modest relative to Valu’s scale. Net income in FY25 alone was roughly twice the Jordan capital commitment. This is not a significant financial event for the company.

What it is, potentially, is a proof of concept for a more ambitious regional strategy. Valu’s entire operating model — its products, its underwriting approach, its funding relationships, its regulatory positioning — was built within the specific framework of Egypt’s Financial Regulatory Authority. The FRA regulates non-bank financial institutions including consumer finance companies under rules that have developed alongside Valu’s growth. Valu has not simply followed those rules; it has, in some cases, helped establish them. The first digitally onboarded BNPL transaction in Egypt under the FRA’s fintech licence was a Valu transaction, executed on the noon e-commerce platform.

Jordan operates under a different regulatory authority — the Central Bank of Jordan — with a different consumer credit framework, a smaller addressable market, and a different economic structure. Whether Valu’s underwriting model, trained almost entirely on Egyptian consumer behaviour and repayment patterns, produces comparable results in Jordan is not a question that FY25 data can answer. It is the question that the Jordan operation will exist to answer.

If it does — if Valu can demonstrate that its credit engine works in a new market without significant recalibration — the geographic expansion logic becomes compelling. Saudi Arabia, Morocco, and several other MENA markets share structural characteristics with Egypt: large informal economies, low banking penetration, high mobile usage, and growing regulatory appetite for formalised consumer credit. Jordan is the test. The report, for now, offers no timeline or financial projections for the Jordan operation beyond the initial capital figure.

The risks that the strong numbers do not resolve

Valu’s non-performing loan ratio — loans more than 90 days overdue as a proportion of the total portfolio, including previously securitised amounts — rose from 0.72% in FY24 to 0.98% in FY25. In absolute terms this remains among the lowest NPL ratios in Egypt’s consumer finance sector, according to the company’s own benchmarking against Financial Regulatory Authority published data. In directional terms, the movement warrants attention.

More specifically, the coverage ratio — the proportion of provisions held against non-performing and written-off loans — fell from 89% to 66% over the same period. A declining coverage ratio means that for every dollar of bad debt, Valu holds fewer provisions as a buffer. This is not necessarily a sign of deteriorating portfolio quality; it can reflect deliberate provisioning decisions when a company is confident in its loss estimates. But taken alongside the rising NPL ratio and a loan book that extended its average tenor during the year — meaning many recent loans have not yet had time to season and produce their eventual default pattern — it is a combination that justifies continued scrutiny as the portfolio matures.

Valu’s FY25 disclosure does not break down NPL performance by vintage — that is, it does not show whether customers who joined in FY23 are defaulting at different rates from customers who joined in FY25. This is standard information in more mature consumer credit markets and would allow investors and analysts to assess whether the underwriting model is performing consistently across different market conditions. Its absence makes it harder to distinguish between a credit book that is seasoning normally and one that is under incremental pressure.

The Jordan credit model question is a related concern. Approval rates in Egypt ran at 47.8% in FY25 — meaning just under half of applicants were accepted. That figure reflects years of data accumulated on Egyptian consumer behaviour across economic cycles. Jordan’s market will require a recalibration period during which the model operates with less historical context. How Valu manages credit risk during that period, and what it discloses about early Jordan performance, will be worth watching.

What FY25 actually establishes

Strip away the headline growth rates and what Valu’s FY25 results show is a company in the middle of a structural transition. It is moving from a merchant-anchored lending business — one that grows by signing new merchant partners and offering installment financing at point of sale — toward a payments infrastructure business that sits inside everyday consumer spending through a card that works anywhere.

The lending business is not going away. Shift, Ulter, and the core BNPL product are all growing. But the Prepaid Card’s trajectory — 179% GMV growth, 210% transaction growth, 22 spending transactions per customer per year — suggests that the payments product is capturing a different and higher-frequency relationship with consumers than any lending product can. A customer who uses the Valu card twenty-two times per year is not using a loan product. They are using a payment product that happens to be funded by a credit facility.

That distinction matters for how the company should be valued, how it should be regulated, and how competition dynamics evolve. It also matters for Jordan and any subsequent market expansion. If Valu is entering Jordan primarily as a BNPL lender, the regulatory path and the business model are relatively clear. If it intends to replicate the card-led payments model, it is entering a market that includes established card networks, mobile money operators, and banks with existing consumer relationships — a considerably more competitive landscape.

The FY25 report does not articulate which of these Valu sees as its primary identity going forward. That is, perhaps, the most useful question the next earnings cycle could answer.

Analysis based on Valu FY25 Earnings Release covering the year ended 31 December 2025. All financial figures converted from Egyptian Pounds to US dollars at a rate of 1 EGP = $0.019. The $7m Jordan capital figure is stated in US dollars in the original report. FRA market share data sourced from Financial Regulatory Authority publication for December 2025. Launch Base Africa had no independent access to company management for this analysis.