Borrowing money

EFG Hermes’ ValU and FAS Labs to Expand Buy Now Pay Later Model in Saudi Arabia

Egyptian FinTech platform valU has signed an agreement with FAS Labs, a joint venture owned by major Saudi retailer Fawaz Abdulaziz Alhokair and shopping mall operator Arabian Centers Company to expand the buy now, pay more consumer finance model later (BNPL) in the kingdom.

Under the partnership, valU, part of EFG Hermes, will acquire a 35% stake in the paid-in capital of FAS Finance, the new consumer microfinance company owned by FAS Labs, the companies said in a joint statement In Monday.

FAS Finance’s share capital will be maintained at 55 million Saudi riyals ($14.6 million).

FAS Labs offers customizable digital consumer finance solutions and the agreement with valU “will accelerate FAS Finance’s ability to develop and scale a fully integrated purchasing platform”, the companies said.

In Saudi Arabia, the solutions will be available through Alhokair’s distribution network of over 1,000 stores, as well as online at Vogacloset and single-brand sites, including 14 in Saudi Arabia.

They will also be extended to other suppliers, retail networks and merchants to cover the entire Saudi market.

The solutions will also be offered to ACC tenants, spread across 21 malls in 11 major cities across the kingdom.

BNPL’s business model, which allows consumers to make online purchases instantly and spread out their interest-free repayments, has exploded since the start of the Covid-19 pandemic.

The industry is expected to grow 10 to 15 times by 2025 globally, surpassing $1 trillion in annual gross merchandise volume by some estimates, according to a report by New York-based data research consultancy CB Insights.

A subsidiary of EFG Hermes Holding, valU was established in 2017 and offers customizable financing plans and access to an extensive network of retail and e-commerce providers in various industries including residential solar solutions, appliances appliances, electronics, education, travel and furniture. .

Its solutions cover more than 5,000 points of sale and more than 330 websites.

The latest move aims to expand valU’s reach into new markets, with “other similar measures to follow soon”, said Walid Hassouna, managing director of valU and the Non-Banking Financial Institutions (NBFI) platform. at EFG Hermes Holding.

The platform will also issue cash loans with its BNPL solutions in the kingdom, he said.

FAS Labs obtained preliminary approval to establish FAS Finance as a Shariah-compliant digital consumer finance company from the Central Bank of Saudi Arabia in January 2022.

The change in ownership of FAS Finance remains subject to regulatory approvals from the Central Bank of Saudi Arabia, the Ministry of Commerce, the Ministry of Investment and the General Competition Authority, the companies said.

Updated: June 06, 2022, 11:56 a.m.

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