Egypt’s Kashat launches country’s first nano lending mobile app offering short-term loans up to $100

Kashat, a Cairo-based fintech has launched its Android-only mobile app that offers short-term loans between EGP 100 (USD 6.33) and EGP 1,500 (~$95) to the users in Cairo and Alexandria, it told MENAbytes earlier this month. The app that’s designed for the unbanked segment of Egypt aims to help users cultivate a financial identity by providing them with instant credit.

The users can sign up on the Kashat using their national ID card, a selfie of themselves, and by answering a few questions in the registration form to disclose their details. The users are then provided with a limit (which goes up to EGP 1,500) if their profile is approved.

They then have the option to apply for a loan. If approved, the user is given up to 6 hours to accept the offer. Upon acceptance, they can withdraw the cash from any Aman store in Cairo and Alexandria. The repayments can also be made at Aman stores and its third-party merchants. Kashat plans to add more payment and repayment options in the future.

The two companies behind Kashat are Cairo-based financial group Pharos Holding and Pakistani tech firm Planet N Group that builds and invests in technology startups in the emerging markets. Planet N also runs Tez, a Pakistani fintech that operates Tez, a financial services app for the unbanked in the country that also provides them access to small amounts of credit.

The terms of Pharos and Planet N’s partnership are not clear but it appears that they have outsourced the tech development to VentureDive, a Pakistani company that had also developed the technology for Careem during the early days of Dubai-based tech firm.

Kashat that’s licensed by Financial Regulatory Authority currently has a team of over ten employees who are being led by Sumair Farooqui, the co-founder and CEO of the startup who has previously also founded a financial services comparison platform and was a vice president for a leading Pakistani bank prior to that.

Sumair, speaking to MENAbytes, about launching Kashat, said, “We’ve worked very hard to put it together. Our launch programs over the course of the upcoming year will enable us to work towards delivering a completely frictionless experience. Egypt being a high growth market is well poised to roll out truly inclusive financial services and we are hopeful that our proposition (Kashat) will help contribute to the joint industry pursuit of a cashless society.”

Commenting on why they think the time is right for something like Kashat, he said, “Egypt has burgeoning payments ecosystem designed to serve the financially excluded. Moreover, the rising importance placed by the government to digitize and serve those who are excluded has made this the right time to introduce products such as Kasaht.  We hope to contribute to the ecosystem and the overall industry’s cohesive effort to deliver more financially inclusive solutions.”

Kashat allows users to pay back the loans in 61 days over two equal monthly installments. The app charges an annual percentage rate (APR) between 16 to 28 percent depending on the loan amount from the borrowers and also deducts a flat fee of EGP 8 in form of processing fees from total limit amount at the time of disbursing the loan.

The app, just like traditional financial institutions is also required to report their delinquent customers to the country’s credit bureau. If a user fails to pay their loan back to Kashat, they run the chance of damaging their credit standing with other future lenders. It also charges a late fee of EGP 3 per week with a maximum cumulative late fee of EGP 24 over 8 weeks for all loan amounts.

Egypt, as Sumair indicated, is a big untapped market. It is one of the largest unbanked population in the world. What Kashat would be hoping to do is to bring a decent part of this unbanked population into their ecosystem, build their credit history by providing these nano loans and potentially sell more services in the future.