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Raya Holding For Financial Investments: delivering cutting-edge solutions and services in Egypt

Interview - June 26, 2019

The Worldfolio sits down with Medhat Khalil, Chairman and CEO of Raya Holding For Financial Investments, who gives his insight into the evolving ICT landscape in Egypt, its competitive advantages as a business process outsourcing (BPO) destination, and the company’s range of activities in Egypt, which include financial services, BPO and manufacturing, amongst others.



Egypt started the implementation of the reforms two years ago with the objective of creating a stable macroeconomic environment to allow the private sector to flourish, create jobs, and raise the standard of living of the population. What is your view of the impact of the economic reforms that took place?

The liberalization of the Egyptian pound led to a relative appreciation of the dollar from 6 EGP to 18 EGP. This is a double-edged sword, on one hand it reduced the demand on the dollar reserves used to stabilize the EGP pound, and made the Egyptian labor and locally-produced goods cheaper for exports, facilitating the attraction of foreign funds. On the other hand, it caused inflationary pressures that affected everyone. Our imports and trading business got affected, and steered us to redirect our investment initiatives into the manufacturing arm of our business, as we continue to invest in Egypt and our local operations. We also recently acquired and revamped a factory for frozen fruits and vegetables, enhanced the capacities for our factory for PET recycling, and founded a new factory for two and three-wheeler vehicles assembly manufacturing.


In terms of some of your subsidiaries, like Raya Contact, how has it affected the competitiveness of your end prices?

It positively affected our Contact Center Outsourcing (CCO) business, enhancing the price competitiveness of our CCO services and exports to the international market. Egypt is now being considered as a hub for Business Process Outsourcing (BPO) because of the country’s multilingual labor pool, scalability and capacity for higher-value work. We also have tens of thousands of new graduates every year from all over Tier 1 and Tier 2 cities’ universities with decent foreign language accents. Labor costs are low following the currency devaluation, when compared to other regional competitors like India, Philippines, Jordan, Tunisia and Morocco. Egyptians acquired various skills while dealing with different cultures comes naturally. Egypt’s population is nearly the same size as the Philippines and has a relatively central geographic positioning that is easily accessed from Europe and North America.  These factors have helped the country’s value become more apparent to a new generation of BPO leaders and their clients.


How would you assess the competitiveness of the ICT sector today in Egypt, and how do you see it evolving?

We would like the government to further increase its investments and allocated budgets for the ICT sector, so the industry can leverage its competitiveness further ahead, in comparison to other countries like India, Pakistan, UAE, and Saudi Arabia; because this will open many opportunities for both public and private incorporations working in the ICT field to grow and increase the ICT sector contribution to the Egyptian GDP. Raya Information Technology has been a leader in the ICT market for 20 years. We have accumulated extensive experience that enabled us to dominate the market and to put a remarkable footprint wherever we go. Our growth across the past couple of years was a subsequent result for our strategy to reinforce our presence through the wide diversity of offerings, adopting the latest technologies, developing our team capabilities to catch the dynamic evolution of IT worldwide - in addition to developing a strong service arm, which was reflected in achieving numerous successful mega projects.


In terms of not only ICT but also e-payments, what role do you play today in the technology ecosystem, not only in Egypt, but also in the region?

We are working on providing more IT services to the Gulf area. So, we are actually providing a lot of ERP implementations in these countries. As for Egypt, we are satisfied with the positioning of the call center and business process outsourcing, and we are also expanding on that front significantly. This is basically our two most growing areas in the ICT sector. .

Our strategy is to help the different corporations whether public or private in their digital transformation journey. Our main role in the market is to deliver and implement cutting-edge solutions and services, which help corporations in all market verticals to best perform.  We always think out of the box. We lead through advanced thinking to have a unique value proposition and to educate the market about the new disruptive technologies.


You mentioned BPO and CCO. Why do you believe that Egypt can be competitive in that specific business segment?

Our current competitiveness post the EGP devaluation is definitely cheap labor and cost competitiveness, as our rates are globally very competitive. You also need highly skilled people in terms of language and we have a large pool of such caliber at Raya Contact Center. We have become a world-class Business Process Outsourcing (BPO) provider, offering back-office services, inside sales management and professional services for clients in the Middle East, Europe, Africa and North America in over 25 different languages.


What kind of reform or promotion programs would you like to see from the public sector?

I would like to see especially education and training for languages as a national priority.


I see that you’ve also taken quite a few steps to diversify financial services into promoting e-payment solutions as well as driving technology into financial services. How important do you think those moves are by a company such as yourself in order to drive financial inclusion?

Sure, we believe this is very important, that is why we are taking a major role. We actually initiated this by creating the first company that is working in this non-banking financial services, so we incorporated the first company and sold it to the government. Then we founded the second private sector company Fawry and sold it once reaching a certain satisfactory growth stage. We also went further in this sector, and incorporated Aman. We are very proud to be the one who has started and initiated such important Fintech investments in Egypt. Aman for e-payments aims for enabling financial inclusion nationwide. Playing an active role in society is very important to us and we are taking a major role which is aligned with the government’s vision to evolve eventually into a cashless society. We also recently founded Aman Consumer Finance (installment services) and Aman Microfinance (entrepreneurship funding for the non-bankable small enterprises).


In terms of Raya Holding For Financial Investments, can you tell us a little bit more about the diversification strategy that you are undertaking?

At Raya Holding For Financial Investments we believe that with a diversified portfolio, we manage risk better. While great achievements mean taking risks, a well-prepared company will always have an edge. We have always believed that diversity is essential; it keeps us relevant and encourages growth and progress. We continue to be guided by our mission to empower every line of business and every person in our organization to grow, advance and achieve more. That is why Raya penetrates new markets by focusing on manufacturing and exports as well as consumer finance. We ventured into two and three wheels transportation vehicles through recognizing a demand that needed to be met. Raya Auto was established to provide versatile transportation vehicles that can easily and safely navigate many of the narrow and winding streets in Egypt and in all of Africa.

The outstanding performance of our business lines makes us confident that we are achieving real value for everyone. The market remains full of opportunities, and we always seek accelerated growth.  Egypt is full of opportunities for investment, and this is what we are capitalizing on. We enter where it is challenging to operate and where the entry barrier for the specific industry is high.