Hi. Mounir Nakhla, I'm happy to see you today, and I'm very pleased that you're with us as my guest on "My Guest with Moataz Al-Demerdash."
Welcome, welcome Mr. Moataz.
Thank you for accepting the invitation and for setting aside some of your time for us. I know you have many things going on, but I'm very interested in asking you about a lot of things as well.
I'm at your service, I'm here.
And thank you for hosting us in this wonderful office, because the atmosphere is very nice and the decor, honestly...
Different, different from the norm.
It gives off such a great vibe.
We are here at MNT-Halan. Exactly. What does MNT stand for?
Are you serious? A long story? Mounir Nakhla, isn't that the basis?
It started when we had a company called Mashroey.
And a company called Tahseel.
Yes.
There was an investor coming from England, a private equity fund, and they used to call it in the office MNT, MNT, MNT.
For Mashroey and Tahseel.
So when we wrote it down, we said MNT, it's catchy, so we wrote it as MNT.
It's a coincidence that my name is also Mounir Nakhla, so it's a nice coincidence.
It is a nice coincidence.
But that's a very nice thing, honestly.
They make for a good brand.
That's true, that's true. Of course, we will talk about the content later and what this brand does.
Honestly, MNT isn't consumer-facing, meaning it's not for the consumer. The consumer brand is called Halan. You'll see Halan cards, the Halan name, and Halan is...
It caught my eye while I was looking at your journey, of course. And by the way, I congratulate you on the success you've achieved, and on your struggle. We will talk about all your milestones. But it struck me, and I don't know if you agree with me or not, that we are all the product of our parents' work in us.
The equation of having an education, a graduate of the London School of Economics, and at the same time a journey of struggle, with one milestone leading to another with strong insistence on success—I think the result of this equation is known and guaranteed. What do you think?
Without a doubt, we are the result of the actions and efforts of other people; we are the outcome.
The first seven years of any human's life are the years where they download everything around them; usually, in the first seven years, they listen, watch, and see, so these are the years they actually learn, that is the unconscious learning. After that comes conscious learning, education, knowing what is right and wrong, and that you must do this, and the persistence and struggle—these are all principles one inherits and sees, so without a doubt, we are the outcome.
But that doesn't mean that everyone doesn't have a responsibility to work hard, strive, and do; I don't think it's right for one to shift the responsibility onto others, one must take responsibility for their actions and their efforts.
No doubt about it. Perhaps if we look at the CV of your companies, we might find that Halan, for example, is one of the most prominent achievements, and there is no doubt that you have become a unicorn, so the company's valuation...
According to my humble information, it has reached more than a billion dollars.
Is this for real? Did it make the news? It made the news. And by the way, you were also chosen by Forbes magazine, which is a very prestigious magazine in the global economy world. That you were among the top 25 funded companies in the Middle East.
I want you to tell me about the value of being a unicorn and being among the most funded companies.
A unicorn is just a valuation. It's the result of actions; the actions are more important than the valuation. The valuation is just the price, like asking how much a Mercedes or some other car costs.
It doesn't matter what it costs; what matters is how fast it goes, what the engine is like, how the leather is, the suspension, and if there are airbags in case of an accident.
Is more important than its price.
Performance. So we focus on performance, and the price follows.
And about the funding, the more funded a startup is, isn't that an indicator of success?
No, that happened in a specific year.
We closed a large transaction then and attracted many investors who invested in the company, so that was in a particular year. It's not something permanent.
But that means investor confidence in your business.
Yes, investor confidence in the business, and these are investors who spend, for example...
Nine months to a year studying the company before deciding whether or not to invest in it.
So it takes a lot of effort to perform what is known in English as "due diligence." Due diligence, where they get to know everything about the company, and based on that, they value the company and make an investment.
I was struck by the development of your business. I mean, we could talk about the journey from the beginning, of course. We will talk about everything, for sure. But I feel like you always have a vision to develop. You don't settle for a stage and stop there. You always see something as potential that no one else sees.
Right or wrong? It happens, it happens. It happens. I... And I can't say if this is an advantage or a disadvantage for me, but it's an advantage for me and the company that there is always something we're working on with great excitement, a new goal, and a lot of work. The disadvantage is that whenever I finish...
Whenever I finish a stage, I find myself in a new stage all over again, starting a project that will take five to seven years, so I get busy again, and I work more, and it's...
There's no break, I mean; you go from one thing to another, back-to-back, as they say.
The last 16 years were like that.
The last 16 years.
The matter started with a simple idea, which was consumer finance, light vehicle financing, in general.
Yes, it started like that in 2010, and it wasn't my idea.
No, no, it wasn't my idea.
But what I know is that you spent a period in your youth—you're still young and doing great, but you spent a period studying some microfinance.
Microfinance. I was a social researcher, and I saw the villages, hamlets, and countryside of Egypt; I toured the governorates.
You toured them, so you were able to understand exactly the needs of the families that are... the...
I saw a side of Egypt different from what I was used to seeing.
Fady opened up different horizons for me. I saw many opportunities and realized how much people needed services, products, and financial support, so I thought, this is a huge market we can serve.
So, as I began to grow, build connections, and gain the chance to execute my ideas, I decided we needed to cover the entire country.
Tell me, honestly, for a young man from the upscale Zamalek neighborhood, who went to Al-Alsun school and is a member of the elite Gezira Club, how is it when you go to the countryside, mingle with farmers, and get involved in that scene? It's not that anyone said anything, but how—how did you adapt?
I just sit and talk to anyone. How did you adapt? I am a human being, and they are human beings sitting together, drinking tea and chatting. What is your life like? Besides, our problems are all the same. How are you doing with? How was your day? "I have a headache." "My leg hurts." "I'm having financial trouble." "Things are going great for me." "Work is going well." "My wife makes me happy." "My wife is bothering me." "I'm thinking of doing this." "The kids are exhausting me." "The kids make me happy." We are all just like that. What is the difference, really?
But the success of your start was born from these communities, because your project started that way.
Egypt's economy is built on these communities; the entire economy of Egypt.
80 to 90% of it is this economy; this is the country.
So, for anyone to imagine that this isn't the country, they are mistaken—this is the country.
The economy is built on the issue of, you know...
It's built on small and medium enterprises found in every governorate, every street, and every corner. Egyptian markets, trade, industry, artisans, farmers, livestock—that is the economy. What else could the economy be?
They need, as you said, support from programs like Mashrou'y, Tasheel, or Hala, so they can do business and work.
They need to be able to grow their projects. Any company today that wants to grow its business and sell more, what does it do? It goes to the bank, shows its balance sheet, and the bank asks for a bank statement. Based on that, they get financing to enter a tender, to grow—working with one pound, then ten, then a hundred. But these small projects didn't have access to a funding entity. To grow their projects, who was funding them? Wholesale merchants were funding them.
Of course, but the wholesaler would add to the price. For example, if he were to supply a retail merchant with 100,000 pounds worth of goods... He'd say, "Cash is 10,000." "Or pay me back in a week, once you sell them." "For 11,500." So when microfinance companies came along to fund them, stimulate them, grow their businesses, and give them support... They found it to be very profitable. Banque du Caire started working on this in '99, and Banque Misr in 2001.
So even banks—there are two banks in Egypt, and Bank of Alexandria is also active.
These date back to the late nineties and the year 2000. So there are associations, companies, and banks—it's a huge market.
I want to go back to the beginning of the journey and learn about the idea and the start of the companies. I notice, of course, that it has been about, let's say, 20 or 17 years, right?
Our journey in this field.
I mean, the company we are at today, since 2010. I will never forget that the company was founded...
2009.
And my middle son was born on January 10th, 2010. I remember I said he brings his own provision with him. You know when they say a child comes with his own luck, I truly believe in that.
Yes, with all three boys.
God bless. That's a beautiful thing. Many people look at their children's birth dates and link them to their work, and they find that a child does bring their own luck.
Ah, the development phase, I mean, is considered 2019 when you turned...
To technology.
Since 2017.
'17, we got into technology when I met Ahmed Mohsen.
And he started adding a lot to the company, of course.
Yes.
He is, well, maybe I don't want to say a genius, but he is different from us.
Innovation.
Yes, with new ideas and also in technical aspects. He is very skilled in computer science.
And in mathematics. He is a prodigy in both, which are both very difficult things. But add to that, the personality that is usually like that is often very focused and reserved, but Ahmed isn't like that. Ahmed Mohsen is a cheerful, smiling person who is socially approachable and talks to everyone.
He can think, innovate, and see things that are intangible today. I see it from the perspective of what the market wants. And he sees it from the perspective of how we can execute it through technology, and how we can do something not done today to facilitate the service for the client, so they can get it faster, cheaper, and with higher quality, so he changes all that.
By using technology, which in its simplest form, for those watching, is a mobile application.
A card linked to an application.
And payments by mobile, too, so you've made life easier for people.
Of course, from their home. They can do everything, apply for a request, register themselves. We could even conduct a credit study for them, and give them an instant approval for a credit limit, but to receive the card, they must sign, and someone must see them and match the ID to the person, these types of things.
So there will be, as you'd say, an in-person meeting, but only when necessary.
That is only for that, but all the procedures are entirely online on the mobile.
Yes, on the application. If someone is investing, we can do it from A to Z on the app.
So, for example, if they are buying into securities funds, or other funds, today the company...
Hmm.
The number of services we work in has grown, between consumer finance, microfinance, small business finance, and payments, whether it's a wallet or the card. We have distributed 1.4 million cards, and those who use them on a monthly basis exceed a quarter of a million citizens.
So, besides the card, we have a game on the application. The main goal of this game is to attract customers. There is... E-commerce, if someone wants to compare the prices of this TV versus that one, or wants to compare phones. So these are the two things at the end; their goal is not, most of the things we do, we don't profit from them.
We do them to attract the customer to us. And provide them with a good service. And then we try to sell them the services that are profitable for us. But what we discovered is that when the customer enters our ecosystem... And within our suite of services, if they take more than one service, the chances of them leaving us for someone else decrease.
Does your business compete with banks, or do you work with them in a system, say, like a joint cooperation?
I always say that I owe all my success to the banks.
It would have been impossible for us to be here today, standing on our feet, without the banking sector. The banking sector is definitely our partner. We don't take deposits today.
So no citizen gives me deposits; I cannot take deposits. Who takes deposits? Banks.
So the banks lend to me wholesale.
And we finance the projects and individuals. The relationship is very interesting; they give us, for example, a billion pounds, and we give out 10,000, 50,000, 30,000, 100,000, 5,000, and so on. It's as if they are wholesale and we are retail. Our relationship with banks is stronger than just a partnership; you even find some banks... through their funds and investment companies, have become our partners.
They became partners with you?
Yes, of course, Al Ahly Capital.
It is the investment arm of the National Bank of Egypt.
They came and took a stake in our company.
It was published in the newspapers and everything.
Today, there are how many banks in Egypt? 36, maybe 37 banks.
We are working with 35 banks.
There isn't a bank that isn't working with us.
So, it is definitely a strong relationship.
But wouldn't the consumer prefer to deal with you for the ease of things and procedures, rather than going directly to the bank? No, of course, there are citizens...
Hmm.
who like to work directly with the bank. The bank can offer benefits, take deposits, give interest, provide financing against a deposit, or offer specific certificates. Some are bank customers.
And there are customers who are not bank customers. They might enter a bank and see a security guard or see someone in a tie; they don't feel comfortable. The scene doesn't make them comfortable. But going up to an office on the second floor of a building similar to their home, in an area 200 meters from their house, is comfortable for them.
So we complement each other to serve...
The Egyptian people. It caught my attention during the interviews I held with a number of businessmen or influencers, who are either businessmen or what is known as entrepreneurs... that they always tell me the Egyptian market is a promising market. A market with room for growth. A market with potential. Simply put, we are talking about a market in a country with a population of approximately 110 million. Sometimes they say we are 120 million. I don't have the exact number, but it is around that range. So I was surprised that after your success in the Egyptian market, you started to have a vision to enter other markets. You went to Turkey. You went to the UAE. You went to Pakistan. So why, why did you go outside the Egyptian market?
I will tell you about this. When I first opened our branches...
I started in Greater Cairo. I started in Hamdiya, Shubra El Kheima, Matareya, Al Khusus. I started in those areas, and then I started to open... in Minya, and I found that Minya has 5 million people.
I said this is a very big market.
This is a country that is as big as, or larger than, countries neighboring us.
I went to Asyut, then found Dakahlia.
Kafr El-Sheikh, Beheira... I found that every place I enter has three, four, or five million people; that's a huge market one can work in.
So I spent years, four or five years of my life, opening branches, and then I started adding products, from financing light vehicles.
To home appliances. I mean, I already have the whole system ready.
Add a product.
It's like you opened a supermarket.
Will you sell tea, oil, and sugar and just stop?
You might sell milk, you might sell Coca-Cola; since you opened, you sell. So, just like I did in Egypt, first I open, then I add products.
I said, well, Egypt isn't the only country in the world.
What's stopping the company from being in 10 countries within 10 years?
What's stopping us from being in 20 countries in 15 years? It's a mindset. Imagine if, for example, Coca-Cola, McDonald's, or Nescafe...
Had said, "We'll just sell in our own country."
Yeah.
That's a bit of a strange thought.
But they conquered the world.
Yeah, they offer a product, and people now...
I've always been annoyed. That big companies come from abroad to sell to the Egyptian citizen and profit from them, and this is considered importing. It drains our currency, strengthens their economy; these companies also hire, grow, and have an investor base. So why shouldn't there be an Egyptian company with a specific product? There are many Egyptian companies in manufacturing, exporting, etc. But in our field, we can also enter one, two, three, or four countries. Especially since we built expertise here. I'm confident it doesn't exist elsewhere in the world.
It relates to difficult technical things like scoring models, computer core banking software; now we've even integrated artificial intelligence that helps us make many decisions in lending and collections. In following up with clients. In adding extra services for clients, etc. I feel like we now have 100 technology engineers. Creating, led by Ahmed and his team. They enabled us to have added value when we enter neighboring countries or even global ones.
I said, every country—being able to enter a country is very difficult.
I mean, it could take me one to two years of preparation to invest in a country outside of Egypt.
But when we enter, a huge economy opens up to us.
For example, Turkey has almost 90 million people; Pakistan has 200 million people.
The Emirates doesn't have those numbers, but it has a huge economy, a large GDP, and a big economic scale. There are other countries we might announce in the near future.
Also in the Gulf? Yes, in the Gulf. Are you studying them? We're close, God willing.
Yeah.
I mean, there is paperwork even, I expect.
Great, would you like to say what these countries are, or do you want to announce them at the right time?
I think it will be announced when...
When it's final, when we execute.
And what attracts you to a specific market? Population? So you mention Pakistan?
The GDP. The GDP. Population and ensuring that we have added value.
I mean, can I really add value to the country, or is everything I'm going to do already done?
If I see that I have value to add, whether through our expertise, technology, or otherwise, then I must have a team, a managing director, or someone to run the country.
We can't do it alone. So, if those three elements come together, we invest. We have a board committee that studies it; it's not a unilateral decision made by Mounir Nakhla.
Hmm, a board of directors.
There are board meetings, and decisions are issued.
Yes, I have to present it, and a hundred people ask me what I'm doing and say this decision isn't right. I have to prove it, we study it, and the process of trying to convince the board of an idea or investment... is very useful to ensure the decision is sound. It reduces the risks, because a decision like investing in another country is a very big one.
Because just as it can bring a return, it can bring a loss.
So it has to be well-studied.
Hmm.
And then, I've lost plenty before.
So, if someone makes a small investment and loses, it's acceptable. Making a big investment and losing, that's painful.
A bit difficult.
It's painful.
It is said that a successful businessman is one who knows when to withdraw from a project as soon as he senses a loss.
Is that statement correct?
Yes, the worst thing a businessman can do is let their ego get in the way. If I take a step and realize it's wrong...
and I say, "No, I'll make it work," just out of stubbornness because I was the one who decided it, that's what they call in English "throwing good money after bad." You're going to lose it. The right decision is...
To say no early on, limit your losses, and shut it down, even if that means stepping out and saying, "Actually, guys, the decision I advised you on was wrong."
