Egyptian households turn to credit as inflation bites
In the past, locals used to buy only durables in installments. Today, breadwinners buy clothes, schoolbooks, stationery and groceries on credit.
Consumer finance is on the rise against a backdrop of price hikes in Egypt, where many households are struggling to make ends meet. Consumer finance rose by roughly 7% to 7.32 billion pounds ($374 million) in the second quarter (Q2) of 2022, against 6.84 billion pounds in 2022 Q1, according to data from the state-run Financial Regulatory Authority (FRA).
With inflationary pressures pounding the most populous Arab country’s middle class, Egyptian breadwinners are buying clothes, school books, stationery and groceries on credit. Consumer finance companies are prospering with more and more customers due to high inflation rates that have made it rather hard for many households to buy in cash.
The consumer price index (CPI) rose to 15.3% in August, on an annual basis, up from 14.6% a month earlier, according to data from the state-run Central Agency for Public Mobilization and Statistics (CAPMAS).
Consumer finance is a non-bank finance instrument in which a company provides customers with credit to buy goods or services without receiving deposits.
