The digital transformation and e-payments company Fawry became the first listed tech company in Egypt with a market capitalisation of $1 billion last week.

At the end of trading on 17 August, the market value of the company had jumped to LE15.56 billion (around $1 billion), meaning it is now rubbing shoulders with the likes of CIB (Egypt), QNB Al-Ahli, the Eastern Company, the Abu Qir Fertilisers Company, Telecom Egypt, and Al-Sewedy Electric in the EGX index billionaires’ club.

Analysts said Fawry had benefited from the lockdown and social-distancing regulations introduced to halt the spread of the Covid-19 pandemic, as more domestic and international transactions were being made electronically instead of using traditional payment methods.

Fawry, the first Egyptian e-payments company established in 2008, allows consumers and companies to pay their bills electronically through multiple channels including online, by ATMs, using mobile wallets, and at retail points of sale.

It offers more than 560 services in multiple fields, including paying mobile-phone bills, utilities, government services, renewing licences, and charitable donations. It provides financial services to clients through a variety of channels and at more than 166,500 locations.

Fawry’s commercial outlets include small grocery stores, pharmacies, libraries, and post offices. According to the company’s website, it conducts more than three million financial transactions a day.

Fawry reported a 135.5 per cent jump in its net profits in the first half of this year, compared to the same period in 2019, to reach LE85.9 million by the end of June. A statement by the company said the exceptional performance was due to a jump in the firm’s sales, which reached LE549.26 million in the first half of 2020, 47 per cent higher than the LE373.33 million it realised in the first half of 2019.

In the first half of 2020, Fawry had 29 million users making 529.9 million transactions.

“We expected the company to grow, but the Covid-19 crisis expedited the process,” Fawry founder and CEO Ashraf Sabri told Al-Ahram Weekly. Sabri said the company’s growth had been a result of increased mobile-phone transactions and e-commerce, both of which had increased by around 2.5 times during the last few months of the pandemic. Payment services inside stores had also increased, he said.

Sabri said the price of the company’s shares on the stock exchange was unimportant, since this could rise and fall depending on market performance. Investors take decisions based on a firm’s strength, expectations of future performance, and ability to grow, he said.

Fawry debuted on the EGX index in August 2019, with the financial services company Sigma Capital saying at the time that the only company competing with it in the same market was Ebtikar Financial Investments.

Ebtikar is not a listed company, but is a joint venture between two other companies listed on the EGX index, namely MM Group and B Investments.

Fawry shares began trading in early August 2019 with a public and private offering of 254.6 million shares, or 36 per cent of capital. The shares were divided into five per cent for the public offering, 10 per cent for the private offering, and 21 per cent for strategic investors.

The private offering targeted investors in the US, Australia, Canada, and Japan. The price of the shares in the public and private offering was the same.

The price of Fawry shares has been climbing since 30 June to exceed LE22 last week, or 300 per cent higher than the offer price last year. “This is despite the fact that since its debut in the stock market the company has not added new services. But it has added a new app, called myFawry, which provides clients with more benefits and has created more users,” Sabri said.

Financial analysts at local investment banks praised the share performance of communications, financial services, and e-payments services on the EGX index, saying this was due to the regulations introduced to halt the spread of the Covid-19 coronavirus and requiring transactions to be made remotely.

Egypt is the biggest market in the region with more than 100 million consumers, but only 32 per cent of these have bank accounts. Some 23 per cent of payments last year were made electronically, meaning that the e-payments market still has room for growth.

The government has launched campaigns to promote e-payments and has for some time been investing in companies that facilitate the transactions of individuals and companies.

Sabri expects his company to continue growing even after the pandemic has ended, saying that there has been an expansion in e-transactions and that society is gradually becoming more accustomed to them, including consumers and government agencies.

He said it was unlikely that society would go back to other forms of payment after becoming used to a payment method that is easy and time-saving.

Lending services to small and medium-sized businesses is the newest Fawry product, and it provides existing merchants and others with business opportunities to grow through small loans.

Since its launch in 2018, this service has attracted more than 700 borrowers, valued at LE4.9 million in the first quarter of 2019. Sabri said his company would focus in the coming phase on services via mobile phones, e-commerce, and lending to small companies.

*A version of this article appears in print in the 27 August, 2020 edition of Al-Ahram Weekly.