When consumers and businesses can borrow money, economic transactions will take place efficiently thereby making the economy grow.
Credit allows companies access to tools they need to produce the items they buy. A business that couldn’t borrow might be unable to buy the machines and raw goods or pay the employees it needs to make products and profit.
In 4,000 B.C., when Sumerian people began establishing the world’s first cities, credit was extended for what may have been the first time.
Loans were made with interest in the Sumerian city of Uruk and early versions of financial contracts were exchanged. In the centuries since different methods of making loans have developed but the basic premise remains the same: People want things they can’t pay for all at once and credit makes it possible to obtain them.
Due to this demand and a limited supply, individuals and businesses in some countries are unable to take advantage of trading opportunities and realize their full economic potential in countries.
NICHE TO MAINSTREAM
Less than 5% of Egyptians have access to credit cards. The effects of the COVID-19 lockdown on the Egyptian economy resulted in greater demand for credit facilities, as consumer behavior shifted towards buying goods with credit due to salary reductions, a rise in unemployment and underemployment, and an overall economic slowdown.
blnk, a fintech platform founded in October 2021 by Amr Sultan and Tarek Elsheikh, that enables instant consumer credit in Egypt, has closed one of the country’s biggest funding rounds for a startup this year raising $32 million.
The funds will be used to accelerate financial inclusion within underserved communities across the country, to support further development of blnk’s Artificial Intelligence-powered lending infrastructure, and to finance the company’s fast-growing portfolio of customers.
blnk has developed a digital lending platform that empowers merchants of all sizes to instantly underwrite and finance their customers’ purchases at the point of sale and enables consumers to access financing to purchase a range of products and services, including electronics, furniture, and automotive services, paying over installments ranging from six to 36 months.
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