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SadatAcademyforManagementSciences

FacultyofManagementSciences
EnglishDepartment
ThirdYear(ArabicSection)
MidTermExam2014
English306
InvestmentandFinance

30Marks
TimeAllowed:2hours
Totalno.ofpages:2
..

IReadthefollowingpassageandanswerthequestionsbelow:(10Marks)
Reefy is a joint stock company working under the General Authority for
Investment and Free Zones. It provides a package of services to the Commercial
International Bank (CIB), including marketing, investigation and collection of
microfinance lending. In other words, the company's tasks range from soliciting
clients, market sizing, paper work, disbursement and collection of loans. But it doesn't
provide loans because it is not yet allowed to do so. The bank does.
As a matter of fact, Reefy doesn't market itself at all. It just sells loans. This is why it
approaches clients selectively. Having trained loan officers to do the job, it scans the
market, identifies the potential client and it approaches them individually. In its
business, it is more a sales campaign rather than mass marketing.
Reefy has been operating for two years now. The paid-in capital was initially LE22.5
million. Shareholders are Naguib Sawiris, the Social Fund for Development (SFD),
and Reefy. There are 515 people working in the company. It has disbursed so far
LE250 million to 60,000 clients, and opened 29 branches, 10 in Cairo, others in
Lower and Upper Egypt. It aims at 60 branches within the next three to four years.
However, going too fast might be risky.
To succeed in microfinance you have to have two things: volume and cost
control. Banks are expensive, a bit complex and their organizational structure is
over-burdened. That's a fact. This business cannot carry that cost structure. Reefy has
515 employees with monthly salaries less than one tenth of a similar number of
employees working in a small bank.
In order to succeed in this business there is a need to have a cost-control mentality.
Therefore, Reefy branches are located where no banks will open. Its officers are all
young and energetic. This is the way to sustain a microfinance organization and
make a proper return. There are absolutely no frills.
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What is the main role of Reefy in the Egyptian finance market?


How does Reefy reach its clients?
To what extent is Reefy different from banks?
What is Reefys secret of success?

IICompletethesentenceswithwordsandphrasesfromthebox.(10Marks)

ConsignmentcleancollectionLetterofcreditCollectingbankBill
ofexchangeDocumentoftitleInvoiceIntermediaryUndertaking
Maturity

1 ..isapromisegivetoorbyabank.
2 isasigneddocumentthatordersapersonorcompanytopay
asumofmoneyondemandoronaspecifieddate.
3 ..isthebankthatreceivespaymentofbills,etc.fortheir
customersaccount(i.e.theexportersbank).
4 ..isamethodoffinancingoverseastradewherepaymentis
madebyabankinreturnfordeliveryofcommercialdocuments,providedthat
thecontracttermsandconditionsaremet.
5 ..isadatewhenabillofexchangeisdueforpayment.
6 ..isapersonorcompanythatactsasamiddlemanina
transaction.
7 ..istheloadofgoodssenttocustomers.
8 ..isthepaymentbybillofexchangetowhichdocumentsare
notattached.
9 ..isalistofgoodssoldasarequestforpayment.
10 isadocumentthatallowssomeonetoclaimownershipofgoods.

IIIWriteashortparagraph(510sentences)on:

(10Marks)

1 Twomethodsofpaymentusedwhenexportingorimportinggoods.
2 Roleofbanksininternationaltrade.

BestofLuck

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