As prices rise, consumers increasingly seek different payment solutions to help manage their household budgets. Potential solutions include consumer financing that allows customers to buy now and pay later (BNPL) or make payments in installments. 

Said Zater, chairman of the Egyptian Federation of Consumer Finance and CEO of non-bank services provider Contact Financial Holding, told the Daily News Egypt in February that consumer finance companies “have enhanced individuals’ purchasing power, stimulated local markets and driven production growth by providing flexible credit solutions and diverse financing options amid economic challenges.”

According to a February 2024 report by Tamara, a fintech platform in Gulf Cooperation Council (GCC) countries, BNPL emerged as the fifth most used payment method globally in 2022, with an estimated gross merchandise value (GMV) of $433 billion.

The BNPL market has rapidly expanded worldwide, and the Middle East is no different. As per a February report by Research and Markets, the overall size of the BNPL market, including all transactions made using BNPL service in the Middle East is projected to reach $5.79 billion in 2025, a 19.4% year-over-year increase.

The region’s young, tech-savvy population, high internet penetration, and the rapid growth of e-commerce significantly accelerated BNPL adoption, especially in the GCC. “The use of BNPL payments in the UAE and Saudi Arabia skyrocketed by 200% in July and August compared to the same period in 2023,”  Checkout.com, a multinational financial technology company, said in September. 

That has created various opportunities for fintech companies to capitalize. “Payment solutions and buy now, pay later services remained the hottest space within Fitech in MENA,” according to Forbes. The region’s top 50 fintech firms on Forbes’ 2024 list “have processed a total of over $240 billion in transactions, having secured more than $3.8 billion in total funding.”

Despite this growth Antoun Massaad, CEO of Cedar Rose, a provider of business intelligence and credit risk solutions in MENA, highlighted in December that “the MENA region’s lack of comprehensive regulations creates significant confusion for both BNPL providers and merchants.” 

BNPL in MENA

The BNPL market in the MENA region grew at a compound annual growth rate of 28.8% from 2021 to 2024 and is forecast to expand by 15.2% annually through 2030, reaching $11.74 billion.

This rise signals a shift “toward personalized, seamless financial experiences,” said a January article by the Business Information Industry Association.

The surge in e-commerce activity and growing consumer preference for flexible payment options have fueled this trend. “The growth of BNPL services is intrinsically linked to the region’s robust online sales and the relative scarcity of traditional consumer lending options,” Nitin Reen, a partner at Nuwa Capital, a Dubai-based venture capital company, told Arabian Gulf Business Insight in July.

Notably, Hosam Arab, Co-Founder and CEO of Tabby, a BNPL provider in Saudi Arabia, told Fast Company Middle East, a business media platform, that “Retailers that use Tabby see average order values increase by 33%. In turn, flexible payments increase shoppers’ purchasing power by giving them financial flexibility while reducing the initial cost.” 

Giant e-commerce platforms like Noon and Amazon MENA have bolstered the adoption of BNPL services across the region. “In the past 12 months, BNPL remained a preferred payment method for online shoppers in the U.A.E. and KSA (Saudi Arabia), with adoption rates reaching 39% and 42%, respectively,” said Remo Giovanni Abbondandolo, MENA general manager at Checkout.com, a global digital payments solutions provider, in March.

This surge “highlights the region’s growing demand for flexible payment options,” he added. “Moreover, with an 80% increase in daily online shopping since 2020, consumers are eager to adopt new payment solutions.”

Within the region, consumer finance companies like Tabby and Tamara have experienced substantial growth with about 10 million users across Saudi Arabia, Kuwait, the U.A.E., and Bahrain, and the valuation of both companies stands at $1.5 billion and $1 billion, respectively, according to the World Economic Forum in March.

Not yet saturated

Rising consumer demand for payment solutions has spurred interest from fintech startups, creating a competitive and innovative ecosystem. Walid Hassouna, CEO of ValU, a fintech company, told Fast Company Middle East in October that traditional financial services’ slow pace of catering to all segments created “an opportunity for more agile and innovative players to enter the fold and deliver on affordability, convenience, and access.”

Additionally, the relatively low rate of financial inclusion in the MENA region helps drive the growth of consumer finance companies. “BNPL customers can make purchases they would otherwise be unable to, which is a convenient solution to affordability challenges,” said Hassouna. 

He showed that this comes into play even more “when considering low access to traditional credit in these markets, making BNPL a suitable option for underbanked and unbanked segments who are otherwise unable to obtain credit.”

Thus, BNPL can accelerate and foster financial inclusion. “BNPL broadens credit access, empowering underserved groups like younger individuals and expatriates to engage more actively in the economy,” according to Fast Company Middle East. 

Younger generations are increasingly keen to pay in installments. According to a June report by Pymnts, a global data and analytics platform, “BNPL adoption rates are highest among Gen Z and millennial consumers, demonstrating the wide appeal of BNPL to populations still building their spending power.”

That signals the ease and accessibility of BNPL to all age groups. “Because BNPL offers a low-barrier alternative to traditional credit, it doesn’t require a high credit score or lengthy approval process, making it accessible to a wider population, particularly younger and lower-income individuals,” said Abdulla Al-Moayed, CEO of Tarabut, a software company in Bahrain, in an interview with Arab News in December. 

In addition, “The ease of using BNPL through mobile apps and online platforms also aligns well with a generation that values convenience and speed,” he said.

To stay ahead in the market, BNPL providers should ensure they are more attractive than traditional banks. “With over 200 global players, including niche providers, traditional banks, and tech giants, the competition is intense,” said Massaad.

Massaad added that competition can lead many providers to reduce fees, adding that “providers must clearly show the value they bring to merchants as in increased sales and better customer reach.”   

Egypt’s BNPL market 

In Egypt, high inflation minimizes consumer purchasing power. “This prompts consumers to resort to buying in installments to meet their needs while bearing an additional cost of interest rates, which increases financial pressures,” according to an article by Alternative Policy Solutions in October.

From 2021 to 2024, the BNPL payment market in Egypt achieved a compound annual growth rate of 53%, according to the Egypt Buy Now Pay Later Business and Investment Report 2025 by Research and Markets. In 2025, the market transactions are projected to hit $1.67 billion. 

This upward trajectory is expected to continue, with the market projected to grow 23% annually from 2025 to 2030. By the end of 2030, the BNPL sector in Egypt is projected to expand from its 2024 transaction value of $1.26 billion to approximately $4.7 billion.

In recent years, the number of consumer financing companies in Egypt has surged, gaining substantial momentum and boosting BNPL market growth. At the end of 2023, there were 34 licensed consumer finance companies, according to a December industry insight by AmCham Egypt. 

This increase can be attributed to the flourishing Egyptian fintech ecosystem. Notably, the country’s fintech market is projected to grow 12% this year, according to the Egyptian Fintech landscape report for 2024. 

To obtain a license from the Financial Regulatory Authority (FRA), consumer finance companies need at least EGP 10 million ($199,000) in issued capital, be at least 25% owned by a financial institution, and be founded by individuals with a minimum 50% stake in the company, the industry insight said.

Consumer finance companies span diverse categories, financing passenger vehicles, durables (household appliances, electronics, etc.), tuition fees, healthcare services, airplane and hotel accommodations, and insurance. 

According to FRA Chairman Mohamed Farid in February, the value of loans and services by consumer finance companies reached EGP 61.3 billion in 2024, compared to EGP 47.3 billion in 2023, achieving a growth rate of 29.6%, Hapi Journal reported. 

FRA data indicates electronics and electrical appliances topped Egyptian installment purchases in the second quarter of 2024, with a total value of EGP 3.45 billion.

Consumer finance providers attract a wide range of customers. Zater noted that the number of people utilizing these services has reached about 3.3 million, indicating that more Egyptians are opting for installment plans and credit services to finance purchases.

The Egyptian market includes providers such as valU, MNT-Halan, Shahry, and AMAN Holding. The report highlighted that providers such as Shahry and valU address the needs of middle-income consumers for everyday items, electronics, and essential goods. 

According to the landscape report, valU’s transaction volume soared to 1.9 million with a gross merchandise volume of EGP 9.2 billion and over 3 million app downloads. In the first quarter of 2024, valU continued to innovate by launching a co-branded credit card and prepaid card, both in partnership with Visa. 

BNPL trap

Unlike traditional credit products, BNPL services often don’t report to credit bureaus, potentially creating a false sense of financial security. “Consumers can enroll in multiple BNPL programs with different providers, and that can lead to unsustainable debt levels that are not reported to traditional credit scoring systems,” according to an article by Forbes in February. 

The article noted that BNPL services typically operate outside traditional lending regulations, offering fewer consumer protections than credit cards. In addition, late payment fees, unclear terms, and aggressive collection practices can put users in a worse position than credit cards, particularly for those who view BNPL as a safer alternative. 

Nonetheless, the appeal of breaking payments into smaller amounts can encourage more spending, which can potentially lead to poor choices and increased financial burdens. Alain El Hajj, co-founder of Paymob, told Fast Company Middle East in October that “BNPL creates a robust infrastructure to support increased transaction volumes, especially on higher-value purchases which consumers may otherwise delay.”

This in turn leads to overspending and impulse purchases, said Jennifer Streaks, senior personal finance reporter at Business Insider in March. “People don’t see these loans as real money.”