Lending small sums to people without bank accounts is a volume business. Recovering those loans is, it turns out, another one. On October 5, Egypt’s Financial Regulatory Authority (FRA) approved the prospectus of MNT Tech Holding S.A.E., clearing the way for the Egyptian arm of MNT-Halan, the country’s biggest non-bank lender, to offer a fifth of its shares on the Egyptian Exchange (EGX). The document gives an unusually detailed account of how mass-market lending works in an emerging economy, and of what it costs.

Among its legal disclosures is a striking number: the group’s operating subsidiaries are pursuing 124,839 active cases in Egyptian courts, with claims totalling EGP 6.47bn ($123.5m). The great majority are actions to recover money from borrowers who have stopped paying, and from the people who guaranteed their loans.

The figure is not a measure of losses. MNT-Halan says it counts the full contractual value of the disputed agreements — original principal, accrued interest and penalty fees — rather than the unpaid principal alone, and that the total is less than 3.5 per cent of all the credit the group has extended since it began lending. In an investor presentation it puts loans that borrowers have stopped repaying properly at 1.5 per cent of its book. Even so, the volume is large: roughly one case for every 15 of the 1.9m borrowers the group counted as active in June, although the cases also involve former borrowers and guarantors. It shows what it takes to lend at scale to people who often have no payslip and little to pledge.

A lender built on small loans

MNT-Halan’s roots lie in Mashroey, a vehicle-finance business founded in 2009, and Tasaheel, a microlender started in 2015. The two were combined in 2018 and later merged with Halan, a consumer-lending app. After a $400m fundraising in 2023 the group was valued at $1bn; a round this June put its worth at $1.4bn.

At the end of June it reported an active loan book of EGP 46.7bn ($891m), served through about 1,200 distribution points in 25 governorates. At the end of 2025 it held 24.3 per cent of Egypt’s non-bank microfinance market by loan book and 14 per cent of non-bank consumer finance by disbursements.

Where the cases sit

The litigation is concentrated in the microfinance arm. According to disclosures signed off by the group’s internal legal counsel, most cases are actions to recover loans from defaulting borrowers and their guarantors:

Tasaheel accounts for 65 per cent of the cases and almost 89 per cent of the money claimed. The average claim there is roughly EGP 71,000 ($1,355), against about EGP 29,100 ($555) at Mashroey and EGP 11,300 ($216) at Halan Consumer Finance. The spread reflects the difference between loans to small traders and purchases of phones and appliances. (The three subsidiaries’ claims add up to EGP 6.43bn, EGP 38m less than the headline total; the extracts do not explain the difference.)

Why so many end up in court

Part of the reason is that most of the loans are not backed by anything a lender can seize. According to a summary of the prospectus by Thndr, an Egyptian retail-brokerage app, the portfolio relies heavily on commercial paper and promissory notes — signed promises to pay — rather than physical collateral. Such notes give no claim over a specific asset, and enforcing them means going through the courts. Where a lender cannot easily repossess a lorry or a shopfront, litigation does the work that collateral does elsewhere.

That also helps explain why two measures of trouble look so different. The 1.5 per cent figure describes overdue loans on today’s book. The litigation total is a running sum of contractual claims, with interest and penalties included, that may go back years and cover loans already written off or partly recovered.

A cushion, and what it is measured against

MNT-Halan argues that it is well protected. Like any lender, it sets aside money against loans that may not be repaid; these are known as expected-credit-loss provisions. At June 30 they stood at EGP 1.34bn ($25.5m), against a minimum of EGP 908m ($17.3m) under the FRA’s formula. That is a buffer of about EGP 430m ($8.2m), or some 47 per cent above the regulatory floor. At the end of 2025 the equivalent figures were EGP 1.42bn ($27.2m) and EGP 1.07bn ($20.3m), a cushion of EGP 358m ($6.8m), or about 34 per cent.

Both the company’s provisions and the regulator’s baseline fell over the six months. The IPO documents do not say why; selling loans to outside investors, which moves them off the balance sheet, can reduce the amount a lender has to set aside. For scale, the provisions equal roughly a fifth of the contractual value of the disputed claims, though the two are not like-for-like: provisions cover the whole book, while the claims include interest and penalties.

Funding the book

Funding is the second cost. The subsidiaries owed EGP 31.69bn ($605m) to banks at the end of June, including Commercial International Bank (CIB), HSBC Egypt, Banque Misr, QNB, Abu Dhabi Islamic Bank and National Bank of Egypt. That is equivalent to roughly two-thirds of the reported loan book, at a time when the central bank’s overnight deposit rate is 19 per cent and headline urban inflation, although down from more than 30 per cent in 2023, was still 14.5 per cent in August.

The pressure showed in earnings. According to prospectus figures, net profit fell from EGP 2.27bn ($42.6m) in 2023 to EGP 1.37bn in 2024 ($25.63m), as the cost of borrowing rose faster than the interest on loans already made, before recovering to EGP 1.98bn ($37.8m) in 2025.

The group has also turned to securitisation, which means packaging loans and selling the right to their repayments to banks or investors for cash up front. This year it issued EGP 4bn ($76m) of 13-month bonds in three tranches through Tasaheel and Halan Consumer Finance, rated A- by Middle East Credit Rating and Investor Services. The company calls this offloading, and it has become a main source of income: according to one reading of the investor presentation, it accounted for 45.5 per cent of revenue in the first half of 2026, up from 17.7 per cent in 2024, while interest income fell to 32 per cent.

The arrangement has its own risks. The prospectus treats offloading as a risk factor in its own right: if sold loans perform worse than assumed, the company must top up reserve accounts that support the payments owed to investors, leaving less money for new lending. The prospectus also reports that cash held against sold loans and not freely available rose from EGP 0.7bn ($13m) at the end of 2023 to EGP 8.9bn ($166.51 million) at June 30, citing roadshow materials.

Covenants, rules and the regulator

The terms attached to credit add friction. A EGP 100m ($1.9m) facility with QNB requires prior consent to direct or indirect changes in ownership. Because obtaining a waiver before the share sale was noted as uncertain, the prospectus warns that MNT-Halan could technically be in default, which could make the outstanding debt immediately repayable. Other credit lines and leases, such as the lease on Tasaheel’s 12,000-square-metre administrative headquarters in New Giza, forbid dividends unless all scheduled debt payments have been met.

The third cost is regulatory. In July the FRA sent Tasaheel an inspection notice that cited overlaps between microfinance and consumer-finance activity in shared branches, a slow shift towards mandatory non-cash payments, and gaps in compliance with anti-money-laundering rules. In August Tasaheel submitted a remediation plan to license and separate all branch operations by December 2027.

The company told the regulator that a move to 100 per cent digital repayment had met practical obstacles. Among them were borrowers’ reliance on informal cash networks and its participation in Decent Life (Hayah Karima), a government programme to develop poor rural areas, where formal digital payment infrastructure is thin. Cash is dearer to collect than electronic payments and harder to trace, which is why the regulator cares about it. Regulators also flagged product misclassifications, noting that Halan Consumer Finance had extended credit for items outside ordinary retail purchases, such as investment gold bullion, agricultural fertiliser, animal feed and commercial taxis.

What investors are being offered

The offering is large by local standards. MNT Tech Holding is selling up to 320m shares, 20 per cent of its 1.6bn issued shares, at EGP 24.50 ($0.47) each, raising up to EGP 7.84bn ($150m). The total could rise to 25 per cent if the FRA agrees. All the shares are existing ones, sold by the main shareholder, MNT Investments B.V., a Netherlands-based vehicle, so none of the money from the sale itself goes to the company. The sale is split in two:

• Tranche 1 (public offering): up to 48m shares ($22.5m), 15 per cent of those on offer and 3 per cent of the company’s capital. Public subscriptions close on October 15.
• Tranche 2 (private placement): up to 272m shares ($127.3m), 85 per cent of those on offer and 17 per cent of capital.

Mounir Nakhla, the founder and chief executive, has said that half or more of what the parent raises would go back into the listed company through a capital increase of up to EGP 4bn ($76m), according to EnterpriseAM, a local news service. The prospectus says investors in the offering must waive their pre-emptive rights in that increase — the right to buy new shares first, in proportion to their holdings — so their stakes would be diluted within a month of the sale. If the new shares were issued at the offer price, EGP 4bn would add about 163m shares, roughly a tenth of the existing total, and cut each holder’s stake by about 9 per cent.

The offer price is a 5.5 per cent discount to the EGP 25.92 ($0.49) fair value that BDO, the independent financial adviser, assigned to the shares. At EGP 24.50 the company is valued at EGP 39.2bn ($748m). That is about 20 times 2025 net income, against 28.5 times for Valu, its closest listed peer. The comparison with the $1.4bn private valuation is not like-for-like, since the flotation covers only the Egyptian business.

Anchor demand comes from CIB, Egypt’s largest private-sector lender, which has agreed with MNT-Halan and MNT Investments to take a cornerstone stake in the private placement and will be entitled to nominate a director. CIB is also one of the group’s key lenders and, by the group’s own account, helped arrange earlier securitisations for Tasaheel, so the ties between the company and its anchor investor run in several directions. EFG Hermes is sole bookrunner and underwriter. The shares will trade on the EGX main market under the ticker HALN.CA.

The test ahead

Nothing in the disclosures suggests that MNT-Halan’s borrowers are defaulting faster than it admits. By its own figures, provisions exceed the regulator’s minimum and bad loans are a small share of the book. What the prospectus does make plain is the price of lending to customers who cannot pledge assets: legal fees, provisions, a heavy reliance on bank and structured funding, tight loan conditions, dilution after the sale, and a regulator pressing for tighter controls on cash.

The outlook for interest rates matters too. According to Thndr’s reading of the prospectus, the group’s bank funding costs move with central-bank rates, while loans already made cannot be repriced before they mature. Falling rates would therefore help its margins, and the company’s plans assume they will fall. If inflation stalls the easing, borrowing would stay dear while the yield on existing loans stayed fixed. Investors are buying a lender whose pricing has to cover all of these costs, and whose results will depend on how that balance holds.