| Arabi “MONGEZ” To Finance the Small Enterprises

Authors
Ayman Radwan, Yasser Mohamed, Mai Abbas,
Ghada Helmy and AbdElFatah Farahat
MARKETING MANAGEMENT - Dr Khaled Hafez

| ARABI “MONGEZ” TO FINANCE

THE SMALL ENTERPRISES
Final Project

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 | Arabi “MONGEZ” To Finance the Small Enterprises
Table of Contents
Company Profile ................................................................................................................................3
Marketing Pillars................................................................................................................................4
Product Features: ..........................................................................................................................4
Segmentation: ...............................................................................................................................4
A) Demographics: ..................................................................................................................4
B) Geographics:......................................................................................................................4
C) Behavioural factors:...........................................................................................................4
D) Sociocultural: .....................................................................................................................4
Targeting:.......................................................................................................................................5
Customer Attributes: .....................................................................................................................5
Differentiation: ..............................................................................................................................8
Product: ...................................................................................................................................... 10
Price:........................................................................................................................................... 10
Place (Distribution):.................................................................................................................... 10
Promotion: ................................................................................................................................. 10
SWOT analysis ................................................................................................................................ 11
Break-even Analysis and Forecasts................................................................................................. 14
Break-even Analysis .................................................................................................................. 14
Sales Revenues Forecast ............................................................................................................ 15
Conclusion: ..................................................................................................................................... 16
Recommendations: ........................................................................................................................ 16
Marketing Strategies ...................................................................................................................... 13
References .......................................................................................... Error! Bookmark not defined.

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 | Arabi “MONGEZ” To Finance the Small Enterprises
Company Profile
Arab Bank headquartered in Amman, Jordan has one of the largest
global Arab banking networks with over 600 branches spanning five
continents. Arab Bank provides a wide range of financial products
and services for individuals, corporations and other financial
institutions. The Bank’s products and services cover Consumer
Banking, Corporate and Institutional Banking and Treasury services.
Arab Bank’s extensive network covers key financial markets and
centers such as London, Dubai, Singapore, Shanghai, Geneva, Paris,
Frankfurt, Sydney and Bahrain. Arab Bank has the following sister
company, subsidiaries and affiliates companies:
Sister Company:
• Arab Bank (Switzerland) Limited.
Subsidiaries:
• Europe Arab Bank plc
• Arab Bank Australia Limited
• Islamic International Arab Bank plc
• Arab National Leasing Company LLC
• Al Arabi Investment Group Co. (AB Invest) LLC
• Arab Sudanese Bank Ltd
• Al Arabi Investment Group / Palestine
• Acabes For Financial Technology
• Arab Tunisian Bank
• Al Nisr Al Arabi Insurance Co. plc
• Arab Bank – Syria
• Oman Arab Bank S.A.O.G
Affiliates:
• Arab National Bank
• Turkland Bank
• Arabia Insurance Co.
• Commercial Building Co.

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 | Arabi “MONGEZ” To Finance the Small Enterprises

Marketing Pillars
Product Features:

Product Features: Type Purpose

Medium Term Loan to finance the

A) Medium Term Loan
following:
- Local suppliers.
- Capital Expenditure (CAPEX)
include expansion for the same
activity except for construction.
Mongez offers Corporate Credit Card up
B) Corporate Credit Card
to the Arab Bank approved facility to
cover the governmental expenses &
utilities only.
Note that Corporate Credit Card provided
as 5% of the MTL limit and above the
approved limit.

Segmentation:
A) Demographics:
▪ Age groups:
- The age range of the target demographic would be above 21 years old according
to Egyptian law of commerce.
▪ Gender:
- Mongez includes both men and women small business owners.
▪ Educational Level:
- High school diploma and above, who have bank signature.
B) Geographic:
- MONGEZ is targeted towards small enterprises in Egypt. The geographic focus of
this market demographic would be on the whole of Egypt including smaller cities
as well as rural areas.
C) Behavioural factors:
- Satisfactory I-Score level and above for both company report &/or main
shareholders, indicates ability to repay loans.
D) Sociocultural:
- Small Business owners from diverse cultures, willingness to seek out financing
options.
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 | Arabi “MONGEZ” To Finance the Small Enterprises

Targeting:

Target Segments: Segment Business Activity Annual Sales

Small Enterprises 1) Small Manufacturers. Sales Revenues Starting

from EGP 20 million to
2) Small Traders.
EGP 50 million.
3) Small Service
Providers.
Targeted Clients will be divided according to their sales with maximum ticket limit up
to EGP 5 million as follows:
▪ Tier 1: Small Enterprises’ last financial statements indicate sales revenues range
with EGP 20 million up to EGP 30 million.
▪ Tier 2: Small Enterprises’ last financial statements indicate sales revenues range
with EGP 30 million up to EGP 40 million.
▪ Tier 3: Small Enterprises’ last financial statements indicate sales revenues range
with EGP 40 million up to EGP 50 million.
➢ Not Targeted Segments:
1) Medium Enterprises (Sales Revenues Starting from EGP 50 million to EGP 200 million).
2) Large Corporate (Sales Revenues above EGP 200 million).

Customer Attributes (Market Research):

A survey was conducted over a sample of 100 person; Results are presented as below:

GENDER AGE GROUP

Male Female from 21 to 30 from 30 to 60 above 60

5%

29%

49%
51%

66%

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 | Arabi “MONGEZ” To Finance the Small Enterprises

▪ How you often use credit facility room to pay governmental expenses & utilities?
a scale from 0(lowest) -5 (highest)

▪ How Frequently do you use Credit Card for purchasing?

FREQUENCY CREDIT CARD PURCHASING

A lot Frequently Rarely Never

9%

10%

23% 58%

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 | Arabi “MONGEZ” To Finance the Small Enterprises

▪ What is your reaction to the described service below?

➢ “Mongez” Corporate Credit card line to pay governmental expenses & utilities.

REACTION TO MONGEZ
Moderately Familiar Slightly Familiar Not at all

23%
31%

46%

▪ How long do you expect to get this flexible package of services below?
➢ Medium Term Loan to finance (Local suppliers, CAPEX).
➢ Corporate Credit Card up to the approved facility to cover the governmental
expenses & utilities only (provided as 5% of the MTL limit and above the approved
limit).

TIME TO ACCESS FLEXIBLE FINANCE

5:7 working days 7:10 working days more than 10 days

26%

44%

30%

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 | Arabi “MONGEZ” To Finance the Small Enterprises

Differentiation:
The top 3 businesses we’re competing against, what they do well and not so well. What we’ll do
differently to succeed in the market.

Competitor Banque Misr Banque Du Caire Fawry Micro

Name Finance

Product Name: Express Engaz Fawry

Strengths: - Loans are provided - Loans are

- Collateral is
within 24 hours provided within
required for loans
with Repayment 48 hours.
amount above
period up to 36 - No collateral is
EGP 500,000.
months. required.
- Repayment period
up to 36 months.
Weaknesses: - Low loan amount
- Low loan amount - Low loan amount
with maximum
with maximum with maximum
EGP 500,000 for
EGP 1 million for EGP 50,000 for
micro and small
micro and small micro and small
enterprises.
enterprises. enterprises.
- Loans are provided - Collateral is - Short loan
required for loans
up to 15 days with repayment period
above EGP 50,000.
a long process up to 12 months.
despite time frame
declared from
Banque Misr
which within 5
days.
What we do ✓ High loan amount ✓ High loan amount
✓ Fast loan
differently: in the market up in the market up
approval process
to EGP 5 million to EGP 5 million
within 10 days.
for micro and for micro and
✓ High loan
small enterprises. small enterprises.
amounts up to
✓ No collateral is ✓ Long repayment
EGP 5 million for
required. period.
micro and small
enterprises.
✓ No collateral is
required.

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 | Arabi “MONGEZ” To Finance the Small Enterprises
Positioning: Unlock the potential of your business with Mongez by Arab Bank - our
Agile financing solutions provide fast and flexible access to the funding you need to
succeed and grow your small enterprise in Egypt."
➢ Agile Finance:
- Mongez provides quick fund disbursement with fast loan approval process within
10 days, which can be beneficial for SMEs that require cash quickly. Traditional
lending methods can often take several weeks or even months for processing.
- Mongez offers flexible repayment options, which can be tailored to the individual
needs of SMEs. This makes it easier for SMEs to manage their cash flow and repay
their loans.
- High loan amounts up to EGP 5 million for micro and small enterprises.
- No collateral is required.

Value Proposition: The value proposition for Mongez, provided by Arab Bank to
finance small enterprises, can be expressed as:
Value = Quality of financing solutions + Excellent customer service
- The quality of financing solutions refers to the flexibility of Mongez as a financial
product. The financing solutions are tailored to the unique needs of small
enterprises, and are designed to help them grow and expand their operations.
- Mongez offers Corporate Credit Card up to the Arab Bank approved facility to
cover the governmental expenses & utilities only as 5% of the MTL limit and
above the approved limit.

Sales Revenues Ticket size (loan amount) Credit Card Line

Tier 1 EGP 20: 30 million EGP 3 million EGP 150,000

Tier 2 EGP 30: 40 million EGP 4 million EGP 200,000
Tier 3 EGP 40: 50 million EGP 5 million EGP 250,000

- Overall, the value proposition for Mongez is built on the foundation of delivering
high quality financing solutions coupled with outstanding customer service and
support.

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 | Arabi “MONGEZ” To Finance the Small Enterprises

Product:
- Mongez is a financial product that offers financing solutions to small enterprises
in Egypt. The product may include loans, lines of credit, and other types of
financing support to help small businesses grow and expand.

Price:
- Mongez offers competitive interest rates and fees to attract small business
owners who may be price-sensitive. According to the following

Medium Term Loan Small Manufacturers Small Business Traders

Line Pricing: And Small Service Providers

Interest Rate 5% according to Central Interest Rate 6.25% above to

Bank of Egypt initiative pricing Central Bank of Egypt corridor
offer rate.

Arab Bank Fees:

Fees Type Pricing

1%
1) Administrative Fees
3%
2) Early Settlement Fees
2%
3) Past Dues Penalty

Place (Distribution):
- Mongez will be distributed (delivered) inside Egypt by Arab Bank branches.

Promotion:
- Arab Bank promotes the Mongez product through various channels as the following:
o Arab Bank Website.
o Social Media Video Ads.
o Interactive voice response (IVR) through Arab Bank call centre.
o Street Banners and billboards.
o Banners and fliers at all Arab Bank Branches.
o SMS campaign.

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 | Arabi “MONGEZ” To Finance the Small Enterprises

SWOT analysis
Mongez strengths, weaknesses, opportunities and threats.

Strengths 1. Mongez has a unique selling point as it caters specifically to

What’s good small enterprises which may have difficulty obtaining financing
about MONGEZ from other banks.
2. Arab Bank has a strong reputation in Egypt and other countries
in the region, which could help to attract customers to this
product.
3. The bank has a strong network of branches and relationships
with local businesses, which may make it easier to market and
distribute Mongez
Weaknesses 1. Arab Bank may need to invest more resources in marketing and
What’s not so training staff in order to effectively promote and manage
good about Mongez.
MONGEZ

Opportunities 1. There may be a large and growing market for financing small
External factors businesses in Egypt, as economic conditions continue to
MONGEZ could improve and more entrepreneurs enter the market.
take advantage 2. Arab Bank may be able to develop new products or services
of. that complement Mongez in order to capture additional market
share.
3. By successfully providing financing for small enterprises, Arab
Bank may be able to establish itself as a leader in this space
and gain a competitive advantage.
4. Access to new markets: Technological advancements allow for
easier access to new markets and opportunities for expansion.
5. Increase in financial inclusion: The use of mobile payment
systems and other digital financial solutions has the potential
to increase financial inclusion and bring unbanked populations
into the formal financial system.
6. Innovation in product development: With advancements in
technology, MONGEZ can create innovative products and
services that cater to changing customer needs.
Threats 1. Data security risks: With the adoption of digital banking
External factors solutions, there is a risk of data breaches and other cyber
that could threats that could lead to financial losses and reputational
cause problems damage.
for MONGEZ. 2. Disintermediation: The use of blockchain technology and other
decentralized financial solutions could potentially lead to
disintermediation, meaning that traditional financial
intermediaries could be bypassed or replaced.

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 | Arabi “MONGEZ” To Finance the Small Enterprises
3. Increased competition: With advancements in technology, new
products to finance small enterprises may enter the market,
disrupting traditional finance institutions, leading to increased
competition and a decline in market share.
4. Operational risks: Despite technological advancements in
financial systems, operational risks still exist, and technological
failure or malfunction could lead to losses.
5. Regulatory challenges: Governments and regulatory bodies
may struggle to keep up with technological changes, leading to
unclear regulations and uncertainty.

PESTEL analysis:
1. Political - The political stability in Egypt can be a concern for Mongez as any
political instability can impact the economic growth and stability, which can
affect small enterprises. Mitigation - Arab Bank have a contingency plan in place
in case of any political instability that could impact their operations.

2. Economic - The economic environment in Egypt is challenging, with high inflation

rates and currency devaluation. This can affect small businesses' ability to repay
loans. Mitigation - Mongez offer flexible repayment options to allow businesses
to repay their loans at a pace that suits each business.

3. Sociocultural - The cultural norms in Egypt can be different from other countries.
This can impact the product adoption rate, and the perception of financial
services to potential customers. Mitigation - Arab Bank creates awareness
campaigns to educate people about the benefits of financial services and offer
services that cater to Egyptian cultural norms.

4. Technological - Many small businesses may not be technologically advanced,

which could hamper their ability to apply for loans electronically or meet the
digital requirements. Mitigation - Mongez offer non-digital options for
businesses to apply for loans, such as paper applications.

5. Environmental - Climate change can impact small businesses, and their ability to
repay loans if they are affected by natural disasters. Mitigation - Mongez can
establish sustainability initiatives to ensure that small businesses survive
environmental factors. Arab Bank Research Department provide environmental
risk assessments for businesses to assess their exposure to environmental
factors.

6. Legal - The Egyptian government has strict regulations for lending practices, and
banks need to ensure their compliance. Mitigation - Arab Bank have a legal
team to ensure compliance with lending and regulatory guidelines and
maintain transparency in their processes.

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 | Arabi “MONGEZ” To Finance the Small Enterprises

Marketing Strategies
1) Frontal Attack: Arab Bank could lower the interest rate on Mongez loans in order
to compete with other banks offering small business loans. Mitigation: Arab
Bank should ensure that they are still making a profit on these loans and not
sacrificing quality or customer service to lower rates.

2) Flank Attack: Arab Bank could offer additional services to Mongez customers
such as business consulting or workshops on how to grow their small business.
Mitigation: Arab Bank needs to ensure that these additional services are
profitable and do not distract from the core product, the Mongez loan.

3) Encirclement Attack: Arab Bank could create a separate brand or product line
specifically for small business financing and market it aggressively to compete
with other banks in this space. Mitigation: Arab Bank needs to ensure that this
separate brand does not dilute the strength of the Mongez brand and confuse
customers.

4) Bypass Attack: Arab Bank could partner with fintech companies that offer
alternative financing options and integrate these options into the Mongez
product offerings. Mitigation: Arab Bank needs to ensure that these fintech
partnerships are reliable and safe for customers and that they do not lose
control over the customer experience.

5) Guerrilla Marketing: Arab Bank could create a viral marketing campaign on

social media platforms to target small business owners who are not aware of
Mongez and its benefits. Mitigation: Arab Bank needs to ensure that the
campaign is tasteful and does not offend potential customers or damage the
reputation of the bank. Additionally, the campaign should not result in false
promises about the product.

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Break-even Analysis and Forecasts

This section will offer a financial overview of “MONGEZ” as it relates to the marketing
activities. It will address Break-even Analysis, sales forecasts, expense forecasts.

Break-even Analysis

The break-even analysis indicates that almost 1.8 M revenue per quarter to break-even.

Break even Analysis

600000

400000

200000

0
450000 700000 1300000 18000000 2000000 240000 260000
-200000

-400000

-600000

-800000

Break-even Analysis
Quarterly Revenue Break-even 1,800,000 LE

▪ Assumptions:
6.5%
- Available Percent Variable Cost 72S,OOOLE
- Estimated Quarterly Fixed Cost

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Sales Revenues Forecast

- The following chart forecasts sales based upon the Market Segmentation
Strategy. Sales are seasonal in this industry, tending to be higher in the
warmer summer months, and to drop off in the winter. However, SR will aim
to flatten sales across the sales cycle by targeting segments that will want to
keep their business good year-round.

Breakdown Forecasted Sales Revenue 2023

14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Tier 1 1,000,000 2,647,059 3,529,412 5,882,353
Tier 2 5,294,118 7,058,824 8,235,294 11,764,706
Tier 3 8,823,529 7,647,059 8,235,294 10,588,235

Tier 1 Tier 2 Tier 3

Breakdown Forecasted Sales Revenue 2024

20,000,000
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Tier 1 1,150,000 3,044,118 4,058,824 6,764,706
Tier 2 7,941,176 10,588,235 12,352,941 17,647,059
Tier 3 14,117,647 12,235,294 13,176,471 16,941,176

Tier 1 Tier 2 Tier 3

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 | Arabi “MONGEZ” To Finance the Small Enterprises

Conclusion:
Below is a summary of all the gaps/risks in previous strategies and its mitigations:

Risk Mitigation

- New products integrate the market of - Arab Bank can continue to invest in product
small enterprises finance. development create innovative products and
services that cater to changing customer needs.
- Arab bank can mitigate threats by investing in
- Advancements in technology.
new technologies that empower its employees
- Data security risks, data breaches and
and customers to better manage their finances
other cyber threats that could lead to
and transactions securely and efficiently.
financial losses and reputational
damage.
- Digital Banking and business solutions have
- The use of blockchain technology and
revolutionized the provision of financial services
other decentralized financial solutions
to SMEs. Both banking institutions and FinTech
could potentially lead to
companies offer unique solutions that meet the
disintermediation, meaning that
needs of SMEs. However, it is important to
traditional financial intermediaries
understand the strengths and weaknesses of
could be bypassed or replaced.
each approach and work towards A
- disrupting traditional finance
COLLABORATIVE MODEL that benefits SMEs
institutions, leading to increased
and combine the strengths of both to enhance
competition and a decline in market
Small and Medium Enterprises.
share

Recommendations:
1. Arab Bank can conduct rigorous risk assessments to ensure that it is extending loans
only to small businesses that are likely to be successful and able to repay their debts.
2. The bank can also explore partnerships with other Technology providers that support
small enterprises and can provide technical assistance or other resources to help
these businesses succeed.
3. To stay ahead of competitors, Arab Bank can continue to invest in product
development, marketing, and training to ensure that its staff and customers are well-
informed about Mongez and the bank's other financing options.
4. Expand its network: The bank can explore opportunities to expand its network and
reach new customers by establishing new branches or partnerships with other banks
or financial institutions.
5. Invest in technology: Arab bank can mitigate threats by investing in new technologies
that empower its employees and customers to better manage their finances and
transactions securely and efficiently.
6. Foster a culture of innovation: By encouraging innovation across its organization,
Arab Bank can stay ahead of the curve and remain competitive in a rapidly changing
financial industry.

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