Tasaheel, a leading Egyptian non-bank financial institution (NBFI) and subsidiary of MNT-Halan, has successfully completed a 7 billion EGP ($138 million) Modaraba Sukuk issuance. This strategic move is set to enhance financial accessibility for underserved businesses while reinforcing Tasaheel’s role in Egypt’s evolving financial landscape.
The issuance marks a significant milestone in the country’s business finance sector. In effect, it aligns with Tasaheel’s long-term vision of providing sustainable, Shariah-compliant financial solutions to entrepreneurs and small businesses.
A Landmark Sukuk Issuance
The 5-year Modaraba Sukuk has been approved by both the Central Shariah Committee at the Egyptian Financial Regulatory Authority (FRA) and the Sukuk Company Shariah Committee, ensuring full compliance with Islamic finance principles. The issuance has attracted strong investor interest, with a 1.2x subscription coverage ratio, demonstrating confidence in Tasaheel’s financial model.
Islam Ayoub, Managing Director of Tasaheel, emphasized the impact of the funding:
“By raising capital in this way, we are advancing our mission to promote financial inclusion and empower small business owners who are the backbone of the Egyptian economy. This transaction will enable Tasaheel to make a meaningful difference in the lives of many.”
Understanding Modaraba Sukuk
A Sukuk is an Islamic financial certificate that complies with Shariah principles. In fact, it often represents ownership in an asset, investment, or project. The Modaraba Sukuk follows a profit-sharing structure, where one party provides capital while another manages the investment. This allows for ethical, risk-sharing financial solutions that align with Islamic banking principles.
Credit Ratings & Sustainability Commitments
Tasaheel’s Modaraba Sukuk has earned strong ratings, reinforcing its credibility in the financial market:
- A Credit Rating from the Middle East Credit Rating and Investor Services (MERIS).
- “Excellent” (SQS1) Sustainability Score from Moody’s Rating Agency, in alignment with the Sustainable Sukuk Principles of the International Capital Market Association (ICMA).
These ratings highlight Tasaheel’s commitment to sustainable finance while positioning the company as a key player in responsible investment opportunities.
Utilizing Funds to Expand Financial Access
With the newly raised capital, Tasaheel plans to expand its financial solutions, particularly targeting small businesses and underserved communities across Egypt. The funding aligns with the company’s broader mission of driving financial inclusion by offering innovative, flexible lending solutions to businesses that struggle with traditional banking access.
Mounir Nakhla, Founder & CEO of MNT-Halan, shared his vision for the future:
“Tasaheel is tapping into new funding channels and diversifying its base to further fuel loan book growth. By securing innovative, tailored financing solutions, we’re extending our reach to more businesses and continuing to make an impact in Egypt and beyond.”
This expansion is a major step for Egypt’s financial sector, bridging the gap between traditional and alternative finance models, while fostering economic growth.
Regulatory Oversight & Key Stakeholders
The issuance came about under strict regulatory supervision from the FRA, ensuring compliance and transparency. A network of financial and legal advisors played a crucial role in facilitating the transaction:
- Financial Advisors: CIB and CI Capital
- Legal Advisors: Maatouk Bassiouny & Hennawy
- Transaction Auditor: KPMG
Additionally, the Sukuk was issued by Alkan for Sukuk and underwritten by leading banks, including:
- CIB, AAIB, El Baraka, and Banque du Caire
- SAIB, ABC, FABMisr, Faisal Islamic Bank, and ADCB
Strengthening Egypt’s Financial Ecosystem
Tasaheel’s successful Sukuk issuance reinforces its leadership in Egypt’s NBFI sector, showcasing how Islamic finance can drive financial inclusion and economic progress. The company remains committed to offering ethical, sustainable, and accessible financial solutions to businesses that need them the most.
As Egypt continues its financial sector evolution, initiatives like Tasaheel’s Sukuk pave the way for a more inclusive and diversified economy, proving that innovative funding strategies can empower entrepreneurs and strengthen the country’s financial infrastructure.
