July 7, 20266 min read

Asset-Based Lending in Egypt: How It Actually Works When the Currency Moves

July 2026 | AltFunds Global
By Taimour Zaman, Founder, AltFunds Global Corp. (Toronto) and AltFunds Global AFG AG (Zurich)

The short version

Asset-based lending works in Egypt. It is harder than ABL in Toronto or Zurich. It is not impossible. The country has the legal plumbing for it. What separates a deal that funds from one that stalls is structure, not optimism.

If you are an operator in Egypt or a broker bringing an Egyptian deal to a global desk, this is the version of the conversation we have on the phone. Written down.

Why do people ask us about this

The Egyptian pound has moved. A lot. The 2016 float was the start. The 2022 to 2024 adjustments took another 40 to 60 percent off, and through 2026, the rate has continued to drift, somewhere around 47 to 54 pounds to the dollar, depending on the week and which window you are looking through.

When a currency moves like that, three things happen to a borrower:

The local-currency value of their inventory and receivables looks fine on paper. In dollar terms, it has shrunk. Their revenue is in pounds, but the imported inputs they need are priced in dollars. And the lender they used to talk to has either pulled back or repriced the facility to a number that no longer makes the deal work.

This is the moment the ICP for our work shows up. Already approved for partial capital. Bank or private equity, or family office, said yes to part of it, then said the rest needs to come from somewhere else. The rates on the gap piece are too high to make the math work. The operator is not desperate. They have momentum. They just do not have a full stack.

That is who this post is for.

What ABL actually is, in one paragraph

Asset-based lending is a credit facility secured against the things a business already owns. Inventory. Receivables. Equipment. Sometimes, warehouse stock or commodities are under a managed agreement. The lender sets a borrowing base, a calculated number tied to the real-time value of those assets, and the borrower draws against it. As assets convert to cash, the line revolves. It is not a term loan. It is not project finance. It is a working facility that breathes with the business.

In a stable currency environment, this is plumbing. In Egypt, the plumbing has to be designed differently.

The legal foundation in Egypt is better than most people think

This is the part most foreign capital providers miss when they say no to Egypt out of habit.

Egypt enacted the Movable Collateral Law (Law 115 of 2015), which aligns with the UNCITRAL Model Law. In plain language, a lender can take security over things that are not real estate. Inventory. Receivables. Future receivables. Bank accounts. Equipment. Even intellectual property. Registration happens through the Egyptian Collateral Registry, which is online, fast, and inexpensive.

Once registered, the secured creditor has priority over later claims. Enforcement does not always require court process. Direct collection of receivables, set-off against bank accounts, or the sale of pledged movables is permitted in many cases.

There is also the older fonds de commerce structure under Law 11 of 1940, which lets a lender take security over a business as a bundle of operating assets. Foreign-currency loans are allowed. Foreign lenders can take security, with Central Bank authorization in certain cases under Banking Law 194 of 2020.

The legal infrastructure for ABL in Egypt is more developed than in many emerging markets. The friction is operational and economic, not statutory.

The four real risks, and how seriously capital handles them

1. Collateral value erosion

A warehouse full of finished goods worth eighty million pounds last quarter is worth less in dollar terms this quarter, even if it is the same warehouse with the same goods.

How real lenders handle it: FX-adjusted haircuts. Where a North American facility might advance seventy to eighty percent against eligible receivables, an Egyptian facility against pound-denominated receivables might advance fifty to sixty-five percent, with an additional ten to thirty percent discount applied to account for forward devaluation risk. The borrowing base is recalculated weekly or monthly, not quarterly. If the currency moves, the line resizes.

2. Cash-flow mismatch

The borrower earns in pounds. The lender wants dollars. Without structure, this is a slow squeeze.

How real lenders handle it: They prefer borrowers with hard-currency revenue. Exporters. Tourism operators. Agribusiness. Manufacturers selling to European or Gulf buyers. Dollar receipts flow into a controlled account, a cash dominion arrangement, and debt service is paid first, before the operating company receives the funds. For pound-only borrowers, the deal either does not get done in dollars or it gets done with an inflation escalator, a currency-conversion mechanism, or a swap that rebalances the exposure.

3. FX liquidity and convertibility

There have been periods in Egypt's recent history when withdrawing dollars from the country was difficult. Not impossible. Slower than the loan agreement assumed.

How real lenders handle it: They build alternative repayment mechanisms into the documents from day one. Pre-agreed commodity delivery rights. Asset substitution clauses. Political-risk insurance through MIGA or private insurers. Convertibility cover. A development finance institution guarantee is available where one is available. The deal does not assume the dollar window will always be open. It assumes there will be quarters when it is narrow.

4. Enforcement speed

The Collateral Registry is fast. When Egyptian courts get involved, they are not always quick.

How real lenders handle it: They structure the security so they do not have to go to court. Direct collection of receivables. Cash dominion accounts can sweep. Warehouse stock under a third-party collateral manager, meaning a real custodian who controls physical access to the inventory and releases it only against the lender's instruction. The further you can stay from a courtroom, the cleaner the deal.

What a workable ABL structure in Egypt looks like

A facility that actually funds usually has most of these features.

Hard-currency denomination, with the borrower's hard-currency revenue as the natural hedge. A borrowing base recalculated weekly, with conservative advance rates, fifty to seventy percent on receivables, forty to sixty percent on inventory, only on assets that meet tight eligibility criteria. Insured receivables. Recent invoices. No customer concentration over twenty percent.

Short tenor. Six to eighteen months, revolving. The lender wants to see the facility behave through one or two cycles before extending.

A cash dominion account in a major Egyptian bank with a tri-party agreement, so the lender controls the order in which cash is applied. Debt service first. Operating expenses are second. Distributions last.

Inventory financing through a collateral management agreement with a recognized warehouse operator. The CMA controls release. The lender sees the movement.

Margin call provisions. If the pound moves more than a defined threshold against the dollar, the borrower has a defined window to top up collateral or accept a paydown.

Credit enhancement where the deal needs it. MIGA cover. A development finance institution co-lending. A letter of credit from a top-tier international bank. A guarantee from a parent in a stable jurisdiction.

This is the structure. None of it is exotic. All of it has been done in Egypt and in similar markets across MENA, Africa, and Latin America.

Where we fit

We are not an Egyptian lender. We are a global financial advisory firm operating from Toronto and Zurich, working with institutional capital sources across North America, Europe, the Gulf, and select development finance institutions. We work with a broker network of more than 900 intermediaries on deals ranging from $1 million to $500 million.

Taimour Zaman is the Founder and Chief Capital Strategist of AltFunds Global. He is the author of Structured Finance Demystified and has been featured in TechTimes, Investment Executive, UK Entrepreneur, and Private Banker International.