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18-Mar-2025

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Tasaheel Secures USD 138M Sukuk Issuance to Boost Financial Inclusion 3 months ago

Tasaheel, a prominent Egyptian lender focused on small businesses and entrepreneurs, has successfully completed an EGP 7 billion (USD 138 million) sukuk issuance aimed at strengthening its position within Egypt's non-bank financial sector. This significant financial maneuver is designed to enhance financial access for underserved businesses, thereby supporting Tasaheel's growth and contributing to Egypt's broader financial ecosystem.

Sukuk Issuance Details

The sukuk issuance, structured as a Modaraba sukuk, features a maturity period of five years and has received certification from both the Central Shariah Committee at the Financial Regulatory Authority (FRA) and the Sukuk Company Shariah Committee, ensuring compliance with Islamic finance principles.

Islam Ayoub, Managing Director of Tasaheel, remarked, "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 Sukuk

Sukuk is an Islamic or Shariah-compliant financial certificate that often represents ownership in an underlying asset, investment, or project. A Modaraba sukuk specifically refers to an investment partnership in which one party provides capital while another manages the investment.

Credit Rating and Investor Demand

The sukuk issuance has received an "A" credit rating from the Middle East Credit Rating and Investor Services (MERIS) and an "Excellent" (SQS1) sustainability score from Moody's Rating Agency, reflecting Tasaheel's commitment to the Sustainable Sukuk Principles established by the International Capital Market Association (ICMA). The issuance attracted strong investor demand, achieving a subscription coverage ratio of 1.2 times, highlighting its appeal and significance within the financial market.

Utilization of Funds

The funds raised through this sukuk issuance will be utilized to support Tasaheel's growth strategy, with a focus on expanding access to financial solutions for underserved businesses and individuals. Mounir Nakhla, Founder & CEO of MNT-Halan, emphasized, "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."

Importance of the Issuance

This sukuk issuance represents a pivotal step for Egypt's business finance sector and reinforces Tasaheel's commitment to providing sustainable financial solutions. Furthermore, it aligns with MNT-Halan's mission to drive financial inclusion across the country.

Regulatory Supervision

Key regulatory oversight was provided by the Egyptian Financial Regulatory Authority (FRA). The transaction was supported by a team of financial and legal advisors, including CIB and CI Capital as financial advisors, Maatouk Bassiouny & Hennawy as legal advisors, and KPMG as the transaction auditor. The sukuk was issued by Alkan for Sukuk and underwritten by CIB, AAIB, El Baraka, and Banque du Caire, with participation from SAIB, ABC, FABMisr, Faisal Islamic Bank, and ADCB.

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