Nagat Mohamed was in dire straits. After sales at her clothes shop in Egypt's Nile Delta plummeted, she took out a loan from a microfinance company to keep the business going – but did not earn enough to pay that back either.
To escape default, the 43-year-old entrepreneur turned to a traditional money-lending system known as a 'gameya' — revived with a 21st-century twist as an app.
"It was a real lifesaver," Mohamed told the Thomson Reuters Foundation over the phone.
A gameya is a type of community savings pool which also functions as a peer-to-peer loan system.
Members deposit a fixed, equal amount of money into a joint pot every month. At the end of each month, one person is awarded the full amount until everyone has had their turn.
While gameyas were long organised informally and offline, they are now being offered through apps in a tech transformation that is revolutionising financing for Egypt's cash-strapped female entrepreneurs.
One in five Egyptian workers are women, according to the World Bank, many of whom run their own small businesses or home-based initiatives.
That makes it hard to get a loan from banks, which require documentation proving a fixed salary or ownership of a shop.
Microlenders, meanwhile, typically impose exorbitant interest rates of up to 40 percent.
Many online gameyas have no interest rates, and registration requirements are minimal: just uploading an ID, signing a contract in person, and providing monthly income statements.
The apps also let members pay a fee to be among the first in line for a payout, thus letting them settle old debts quickly and avoid taking on new loans with onerous interest rates.
Mohamed turned to an online app called MoneyFellows to help her repay the 15,000 Egyptian pounds ($954) that she owed the microfinance company for her shop.
"Two months ago, I finally paid my loan. I'm joining another money circle to grow my business and fund my daughter's marriage," the mother of three said.
Many of Egypt's women entrepreneurs turned to the gameya model during the pandemic, which hit small enterprises hard.
Three-quarters reported a drop in business in 2020, and 9 percent had to shut down completely, according to a survey by Egypt's Ministry of Planning.
"People are showing growing interest in online savings systems because they are simple, easy to use and come with meagre interest rates," said Ahmed Wadi, the chief executive and founder of MoneyFellows.
The number of women entrepreneurs using the app has risen from about 20,000 before the pandemic to some 150,000, representing about 6 percent of its 2.5 million users.
On average, they took out loans of 12,000 pounds.
Women make up one in three users of another app, ElGameya, typically seeking loans of about 15,000 pounds.
"There was an already existing need for our business," its founder Ahmed Mahmoud Abdeen said.
"Women were already joining offline gameya apps or borrowing from their friends and families to pay their loans or grow their business. We only made life easier for them."
Part of the appeal is the flexibility.
If ElGameya's borrowers want to get their payout within the first four months of the lending circle, they pay a monthly interest rate of up to 9 percent. But if they accept a longer wait, the interest fees are waived.
Amal Abdel Aty, who owns a home utensils shop in the Nile Delta city of El Mahalla El Kubra, said she had been forced to borrow from her friends and sell some of her possessions to meet repayments on two loans she took from microfinance companies.
Her first loan was worth 10,000 pounds at an interest rate of 24 p ercentover 18 months. When she could not pay it, she took out another 10,000-pound loan.
Three months ago, she joined a 12,000-pound lending circle at ElGameya and has already been awarded the full pot, allowing her to pay back the first microfinance loan.
REVIVING OLD SYSTEMS
Gameya loan apps are not regulated, but the central bank is working on a system of authorisation.
The money-lending circles have a long history of boosting access to finances for marginalised communities, particularly in urban areas, according to Yomna El Hamaki, a professor of economics at Ain Shams University.
There is also a religious element.
"In a Muslim society like Egypt, people usually prefer to register for gameyas rather than go to the banks or other financial institutions which offer loans at interest rates that are considered forbidden by many Muslims," El Hamaki said.
And with economies squeezed by the pandemic, they have become an online lifeline for Egypt's budding women business leaders.
"These apps are a buffer for many who got their financials adversely affected by the pandemic," she said.