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Financing
Businesses
GB Auto’s strategy aims to create a full-
fledged financial arm that serves its core
business while competing with other
non-bank financial service providers.
GB
Capital
is the driver of this strategy. Today,
GB Capital oversees the operations of the
group’s four financial service providers.
Overall, the Financing Businesses line is
growing steadily, withGBCapital’s strategy
being to benchmark its operations against
the best in the field, building on strict
and robust credit policies specifically de-
veloped for each industry. All companies
are staffed with veterans of the financial
services industry to provide the required
expertise and know-how to their distinc-
tive areas, and all companies work on a
non-exclusive basiswithGBAuto to ensure
the competitiveness of their operations.
The companies’ credit approval and dis-
bursement mechanisms are well advanced
and comply with best practices of financial
institutions in the country.
Furthermore, asset quality and collec-
tions—being the backbone for the success
of any financial institution — are closely
monitored, well-maintained and con-
trolled within each company, with results
that match and exceed industry norms.
The aim of GB Capital is to develop a
well-diversified and synergetic group of
financial services building on the spirit and
strategy of GB Auto, while maintaining a
high level of focus and specialized exper-
tise within each company. To that end, GB
Capital is also on the lookout for new addi-
tions to complement its portfolio.
GB Lease
is the first financing company
established by GB Auto. Initially estab-
lished in 2008 to provide finance to GB
Auto’s commercial vehicles and corporate
fleet clients, the company started active
operations in 4Q 2009. GB Lease is now a
well-developed and well-established com-
pany with a diversified field of operations.
The company’s lease asset base nowcovers
all asset classes, including real estate, auto-
motive, production lines and others. Tenor
is medium term, and the company focuses
on risk diversification by asset class, in-
dustry sector and clients, and operates
prudent risk management practices with
respect to provisions and risk recognition.
GB Lease provides business-to-
business financial leasing solutions. It is
non-exclusive to GB Auto, and caters to a
diversified client base ranging from top-
tier multinationals to local corporations
of various scales, as well as small and
medium enterprises.
As at 31 December 2014, GB Lease
ranked as Egypt’s second largest leasing
company (ranked by total contracts value)
with a 15.24%market share (with the mar-
ket leader at 15.44%), as declared by the
Egyptian Financial Services Authority
(EFSA). For 4Q14 standalone, it ranked as
the largest leasing company by contracts
value and market share. GB Lease fully
complies with all regulations and operates
under the auspices of the EFSA.
Mashroey
is GB Auto’s second financ-
ing venture. Founded in late 2009, it began
operations inMarch2010 andoffersmicro-
finance services on credit terms to eligible
clients. Like GB Lease, the company is now
well developed and growing rapidly across
Egypt, with a nationwide network cover-
age of around 65 branches.
Mashroey started out selling GB Auto’s
Bajaj-branded motorcycles and three
wheelers on credit terms. While these
vehicles continue to constitute the bulk
of Mashroey’s portfolio — accounting for
c. 80% of its business — the company has
since added motor tricycles (a non-GB
Auto product) and GB Auto’s YTO agricul-
tural tractors, minivans, animal feedstock
andpre-owned tuk-tuks to its suite of prod-
ucts for which it offersmicrofinancing.The
company plans to pursue other product
lines to diversify its portfolio.
Drive
is GB Auto’s third financing ven-
ture. Licensed as a Factoring Company
in 3Q12, it offers factoring services to a
well-diversified client base, ranging from
business-to-business (SMEs) to business-
to-consumer (retail), which includes auto
loans to end consumers. Drive is now far
into the growth phase of its development
and is growing steadily. Since its launch,
the company has made remarkable strides
in market presence, achieving operational
breakeven and carving a place for itself in
the very competitive automotive financing
sector within its first year of operations.
Drive anticipates a further boost to its
operations after factoring regulations
expanded the scope of operations to
allow both business-to-consumer and
business-to-business. The company has a
well-developed portfolio, tenor is medium
term, and its focus is on risk diversification
by finance product types, client base, and
brands (as far as auto loans are concerned).
Drive finances sales of GB Auto’s Hyun-
dai and Geely passenger cars out of the
company’s showrooms and has quickly ex-
panded its reach to serve customers at GB
Auto’s independent dealer network. Drive
is non-exclusive to GB Auto and covers a
multitude of financial solutions for various
SMEs and consumers. The company fully
complies with all regulations and operates
under the auspices of the Egyptian Finan-
cial Supervisory Authority (EFSA).
Ghabbour Auto | 2014 ANNUAL REPORT
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