Egyptians lean on instalment payments to cope with inflation

Egyptians are increasingly relying on instalment payments, not just for big-ticket items but for relatively cheap, routine items such as clothing and groceries

By Reuters

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A pedlar sells roasted corn cobs by the medieval Sultan Al Ghuri Complex in the Azhar district of Egypt's capital Cairo. Inflation in Egypt has accelerated to five-year highs. — AFP
A pedlar sells roasted corn cobs by the medieval Sultan Al Ghuri Complex in the Azhar district of Egypt's capital Cairo. Inflation in Egypt has accelerated to five-year highs. — AFP

Published: Wed 22 Feb 2023, 4:45 PM

Ahmed Ramadan, a 44-year-old father of three, started using instalment payment services eight months ago after feeling the sting of high prices that have squeezed Egyptians’ pockets over the last year.

He used the services to buy a television, a mobile phone for his daughter, and even clothes for his family.

“It might be more expensive than paying up front in cash but at least I can meet the needs of my entire family and not just one person,” Ahmed said.

The extra liquidity would help pay for his kids’ schools, he said.

Egyptians are increasingly relying on instalment payments, not just for big-ticket items but for relatively cheap, routine items such as clothing and groceries, as the North African country grapples with record-high inflation, consumers and industry leaders told Reuters.

Inflation in Egypt has accelerated to five-year highs, after the war in Ukraine hit finances, and the currency has been devalued by nearly 50 per cent since March 2022 amidst negotiations with the International Monetary Fund.

An instalment payment service was even introduced this year at the annual Cairo International Book Fair after publishers worried that sales for their non-essential wares would be weak.

“This way the reader ... buys the books he wanted and the publisher was able to get good sales and was not affected by the economic situation,” said Saeed Abdo, head of the Egyptian Publishers Association.

Sympl, a Cairo-based buy now, pay later service, has seen a surge in activity in recent months. Co-founder Yasmine Henna told Reuters new client acquisitions had jumped 50 per cent in January compared with the month before.

Existing clients are also using the service more, with repeat users accounting for 40 per cent of total monthly transactions in January, up sharply from five per cent in the same month last year.

“There’s a focus on life necessities like grocery shopping and fashion,” said Henna. “People now see that they have to buy now before prices get higher.”

Henna said that they plan to introduce new categories such as water and electricity bills.

Mohamed Mahmoud, another father of three, did not like the idea of paying through instalments at first but has now reconsidered it in order to meet his household needs.

“I now pay in instalments so I can eat and drink,” said Mahmoud. “I’m past the phase of using it for luxuries.” — Reuters


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