Shaheen Mohamed, a middle-aged small clothes shop owner, was taken aback when he learned that movement in Egypt would be restricted and shops would be closed early due to a coronavirus outbreak.
“I got worried about my business as people’s demand on clothing would go down amid a lockdown imposed to prevent the spread of the virus as well as amid an expected declining purchasing power,” Mohamed told Inside Arabia.
Mohamed is among tens of thousands of business owners and irregular workers whose jobs are threatened by the coronavirus outbreak.
Most Egyptians face an uncertain future as coronavirus has taken its toll on the country’s tourism industry, exports, trade, and health sector.
However, entrepreneurs and innovators are coming up with out-of-the-box ideas in order to help Egyptians cope with the coronavirus repercussions and ensuing hardships.
One example is an Egyptian multilingual android-only application called Kashat which is giving short-term loans to Egypt’s unbanked community in order to boost their finances amid a coronavirus outbreak that threatens an unprecedented economic crisis.
Kashat is designed to help users cultivate a financial identity by providing them with instant credit.
Kashat, which is licensed by the Financial Regulatory Authority, is designed to help users cultivate a financial identity by providing them with instant credit. The app offers short-term loans that start from 100 EGP up to 1,500 EGP (about $7 to $100 USD) with a repayment plan up to 61 days.
“We target the unbanked community with smart phones in Egypt, which is currently approximately 10 percent of the overall population, as it stands, with the smartphone market growing at a conservative estimate of 10 percent,” Kashat’s Marketing Lead, Hend El-Samahy, told Inside Arabia.
Other than traditional tech startups, Kashat is targeting business owners who run small businesses from home or kiosks, tradesmen such as plumbers, carpenters, and painters as well as salaried employees that do not have access to banks.
Kashat also helps housewives who have a home business such as cooking and sewing and are in need of a 300 to 500 EGP (about $20 to $35 USD) loan to get materials they need in order to push their business through. Other customers in their portfolio could be taxi drivers who would want funds for gas or fixing a tire.
“We currently have more than 55,000 installs for our application, over 10,000 accounts created,” El-Samahy said, adding that during the time of the coronavirus these brackets will be the neediest for these kinds of loans.
Kashat is managed by two companies – Cairo-based financial group Pharos Holding and Pakistani tech firm Planet N Group – that build and invest in technology startups in the emerging markets.
Kashat currently has a team of over 10 employees led by Sumair Farooqui, the co-founder and CEO of the startup.
Farooqui has previously founded a financial services comparison platform and was a vice president for a leading Pakistani bank prior to that.
“Being able to help millions of the unbanked Egyptians get access to small loans will definitely benefit overall society.”
“Being able to help millions of the unbanked Egyptians get access to small loans will definitely benefit overall society and the larger financial services industry,” El-Samahy said.
She added that by helping millions of excluded people build a financial identity, the company aspires to become one of the catalysts to the inclusion drive undertaken by various stakeholders and government efforts in Egypt.
Through Kashat, users will be able to apply for instant credit using their smartphones. They first set up an account through the app itself, take a picture of their national IDs, answer a few questions, and wait for a message to inform them of the credit decision within minutes.
If a credit application is approved, the borrower will be able to withdraw the funds from Aman Stores instantly, the repayment of the loan will also take place through the same channel.
As businesses take losses due to the coronavirus and some of them have closed down, many Egyptians are suffering financially.
Ahmed Hossam, a kiosk owner, said that the coronavirus pandemic has pushed people to buy less and this has largely affected his business.
“Limited income brackets need these kinds of loans for the time being amid a lockdown that harmed many businesses.”
“Limited income brackets need these kinds of loans for the time being amid a lockdown that harmed many businesses and pushed many business owners to reduce their workforce in order to endure [the] losses,” Hossam told Inside Arabia.
“As a kiosk owner, I am prone to lose my income at any time if I contracted the virus. So, having such loans would be of great help to people like me if anything bad happened to [us].”
Mai Abdel Haleem, a chef who has a small food business, said that she needs some funding in order to push her business ahead as she buys cooking materials and packaging items.
“Getting a [micro] loan is great for me as a small business owner,” Haleem told Inside Arabia.
Abdel Haleem, who used to work as an accountant at a private company, is now focusing on her business after the company laid off about a quarter of its workers.
“I think many people who work for the private sector are like me and turning to small businesses can be the perfect solution at the moment,” she added.
Egypt has seen a growth in micro, small, and medium-sized businesses (SMEs) over the past few years with the government encouraging these enterprises in order to reduce the pressure on employment at state institutions.
According to official statistics, the total number of enterprises for micro and small enterprises nationwide reached 2.4 million and the number of their employees reached 6.3 million.
To help these enterprises cope with the current situation, the government has put off repayment of loans given to SMEs.
Moreover, the government has taken a raft of measures to avoid further economic crisis and to help nationals cope with the negative economic repercussions of the coronavirus.
The government has dropped export fees by 10 percent, loosened tax payment on business owners of several industries, as well as delayed the repayment of loans of all kinds in order to ease the burden on citizens.
In an attempt to boost irregular workers, the government also gave an allowance worth 500 EGP (about $35 USD) to irregular workers.
The number of irregular workers stands at 15 million representing 15 percent of the country’s total population.
According to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS), the number of irregular workers stands at 15 million representing 15 percent of the country’s total population.
“This is a big number and finding solutions to help those workers who do not have a stable job is a must during these tough times,” Ahmed el-Shami, an economist and professor of feasibility studies at Ain Shams University, said.
He added that startups like Kashat offer innovative ideas to problems that are emerging from the coronavirus pandemic.
“Offering short-term loans would greatly help many small business owners or people whose jobs [are] threatened by coronavirus and do not have any other source of income,” Al-Shami told Inside Arabia.