Raseedi, an Egyptian financial technology startup, has acquired Kashat, a nano-finance provider and its subsidiary Pharos Microfinance, in an equity deal aimed at expanding its product offerings and introducing instant loans. The undisclosed sum paid for Kashat marks a significant move in Egypt’s burgeoning fintech sector, targeting the country’s large unbanked population.
The acquisition will enable Raseedi to offer instant cash loans of up to EGP 3,000 (approximately $95 USD) to small business owners and sole proprietors, disbursed within five minutes. These short-term loans will have repayment cycles of one to three months. Raseedi plans to leverage its proprietary technology and credit scoring algorithm to assess borrower eligibility.
Ahmed Atalla, Raseedi’s chief executive, outlined ambitious expansion plans following the acquisition. After a six-month rollout in Egypt, the company intends to expand into markets with substantial unbanked populations, including Morocco, Uzbekistan, and other countries in Central and West Africa. Mr. Atalla told EnterpriseAM, an Egyptian business publication, that Morocco is tentatively targeted for launch within 12 months.
Raseedi currently boasts 120,000 monthly active users and aims to increase this figure to 1.5m within six to eight months, with a longer-term target of 3m. “We plan to disburse up to EGP 3,000 to underbanked people,” Mr. Atalla said, adding that the company intends to engage with the Financial Regulatory Authority (FRA) to potentially increase this lending limit. The focus is on providing access to finance for small businesses and entrepreneurial ventures.
Beyond individual borrowers, Raseedi plans to launch a business-to-business (B2B) service in the second half of the year. This service will target partnerships with companies such as ride-hailing services and delivery platforms, offering drivers and delivery workers instant payments against future earnings or cash advances of up to EGP 3,000. “The goal is to conduct partnerships with big businesses with a lot of employees on the ground to give them the ability to be paid in advance for their endeavours,” Mr. Atalla explained.
The acquisition will also bring management changes. Raseedi will appoint a managing director to lead Kashat and recruit personnel in credit and risk management roles.
Karim Nour, co-founder and chief executive of Kashat, highlighted the significance of the deal in a statement: “The ability to easily lend money to the masses will be expanded, and Raseedi along with Kashat, through its subsidiary Pharos Microfinance, will become Egypt’s only financial service provider to offer nano loans at scale; and that was purpose built for the task. This deal is important because the companies involved are true big data and artificial intelligence players, and are both home-grown.”
The acquisition underscores the growing importance of fintech in emerging markets like Egypt, where access to traditional banking services remains limited for a significant portion of the population. By offering quick access to small loans, Raseedi aims to tap into a substantial market and contribute to greater financial inclusion. However, the company will need to navigate regulatory landscapes in its target markets and manage the risks associated with lending to underbanked populations. The success of its expansion will depend on its ability to effectively scale its technology and manage credit risk while maintaining responsible lending practices.