Said Zater, CEO of Contact Financial Holding and Chairpersom of the Egyptian Federation of Consumer Finance, took part in the 8th Capital Markets Annual Summit, which was held under the theme of “Structural Reforms – Sustaining Development”. The summit, which was sponsored by the Ministry of Finance, the Ministry of Planning and Economic Development, the Financial Regulatory Authority, and other entities, focused on the structural reforms that the Egyptian government is implementing in various economic sectors to enhance investment and sustainability.
In the second panel, titled “Corporations and the Challenges of Managing Cost of Financing,” Said Zater said: “Consumer finance is a vital economic sector in Egypt, as it affects everyone, boosts consumption, and supports economic growth. It is the future we will all be living. The consumer finance law, which was issued in 2020, has created new opportunities for companies to enter and play a significant role, especially amid crises such as COVID-19 and exchange rate fluctuations.” He also said: “Consumer finance is different from other types of financing, such as leasing, because it is not possible to apply a floating interest rate to the customer.”
Zater discussed consumer behavior as well, explaining that customers may use consumer finance to buy goods that they may not need urgently, fearing future price hikes, or for saving purposes due to inflation, which may lead to difficulties in paying the installments.
Zater mentioned that Contact was established in 2001 as the first finance company in Egypt, and began issuing securitization bonds in 2005 as the first securitization bond issuer in Egypt. Later, it issued sukuk, and became one of the largest issuers of bonds and sukuk in Egypt. He said that the company needs substantial liquidity to fund its operations, so it uses all financing tools, as relying only on banks is not feasible. Therefore, it seeks to meet its financing needs and achieve the required liquidity.
Regarding the Ras El Hekma deal, Zater expected that exchange rate stability would attract investors, and stressed the need to stabilize the exchange rate and use resources to maintain a healthy market that allows companies to view the Egyptian economy with optimism.
