Banking expert Ayman Hassan Soliman said valuing the "MNT-Halan" offering on the Egyptian Exchange requires looking at the group's ability to earn a return that covers its funding and operating costs and credit losses, adding that the size of its debt and the number of lawsuits against defaulting customers are not enough on their own to judge its growth prospects or risk level.

Soliman noted that the offering aims to sell about 20% of the company's capital for close to EGP 7.84 billion, amid indicators that reflect a broad scale of activity while also raising questions about its debt and the quality of its financing portfolio.

He explained that the entity being offered is "MNT Tech Holding for Financial Investments", not "Tasaheel" or "Halan Consumer Finance" on their own, as the holding company groups a number of companies operating in non-bank finance, payments, technology and commerce.

According to Soliman, loans and facilities owed by the subsidiaries total about EGP 31.7 billion, a figure that should be assessed in light of how finance companies work: they borrow and redeploy the funds as financing to customers at a higher return.

He stressed that the key yardstick is the cost of funds and the return earned on deploying them, after operating expenses and credit losses, which determines how far the debt can support growth and deliver a suitable return to shareholders.

He pointed to about 124,800 lawsuits against defaulting customers, with total claims of nearly EGP 6.47 billion, most of them filed by "Tasaheel". He noted that the value of these claims does not necessarily equal the outstanding non-performing loans, as it may include the total contractual value of the contracts rather than only the remaining principal.

He added that these figures must be read in the context of the scale of activity, noting that since its founding the group has disbursed about EGP 178 billion in financing, while its current financing portfolio stands at about EGP 46.7 billion, with about 1.9 million active customers.

He explained that an accurate credit assessment requires analyzing default ratios, the size of provisions and how well they cover non-performing and written-off debts, collection rates and the cost of credit risk. Total financing disbursed since founding reflects the historical scale of activity but is not enough to judge the quality of the current portfolio.

Soliman stressed that rapid growth in the financing portfolio is not a positive sign on its own unless it comes with stable credit quality, which calls for comparing portfolio growth with the growth of defaults, provisions and credit losses.

He believes the group has growth drivers in its broad customer base, large financing portfolio and diversified activities, while its business model by nature relies on borrowing and carries credit risks that require highly efficient management.

Soliman concluded that the most important question for investors is whether the return on the financing portfolio is enough to cover the cost of funds, operations and credit losses while delivering a suitable return to shareholders. If that equation holds, debt can fuel growth; but it could become a risk multiplier if funding costs and defaults rise faster than returns.