Sadat Academy for Management SciencesFaculty of Management SciencesEnglish Department Third-Year (Arabic Section)

Mid-Term Exam 2014English 306

Investment and Finance 30 Marks Time Allowed: 2 hoursTotal no. of pages: 2……………………………………………………………………………..I- Read the following passage and answer the questions below: (10 Marks)

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.

1- What is the main role of Reefy in the Egyptian finance market?2- How does Reefy reach its clients?3- To what extent is Reefy different from banks?4- What is Reefy’s secret of success?

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II- Complete the sentences with words and phrases from the box. (10 Marks)

Consignment- clean collection - Letter of credit - Collecting bank - Bill of exchange – Document of title - Invoice – Intermediary - Undertaking – Maturity

1- ………….……. is a promise give to or by a bank.2- …………………is a signed document that orders a person or company to pay

a sum of money on demand or on a specified date.3- ………….……. is the bank that receives payment of bills, etc. for their

customer’s account (i.e. the exporter’s bank). 4- ………….……. is a method of financing overseas trade where payment is

made by a bank in return for delivery of commercial documents, provided that the contract terms and conditions are met.

5- ………….……. is a date when a bill of exchange is due for payment.6- ……………….. is a person or company that acts as a middleman in a

transaction. 7- ………………..is the load of goods sent to customers.8- ……………….. is the payment by bill of exchange to which documents are

not attached.9- ………….…….is a list of goods sold as a request for payment.10- ………… is a document that allows someone to claim ownership of goods.

III- Write a short paragraph (5-10 sentences) on: (10 Marks)

1- Two methods of payment used when exporting or importing goods.2- Role of banks in international trade.

Best of Luck

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