The employees of those establishments get the goods from Omar Effendi when they sign the contract, and payment is made by check from the establishment which deducts a sum from the employee's monthly salary. Abdel-Khalek said this system is applied on all durable and consumer goods with a seven per cent interest rate. This system has increased sales by 30 per cent. In his opinion, the only advantages of the instalment system are that it increases sales of goods and enables some companies to get rid of inventory. On the other hand, he said, high interest rates make commodities much more expensive.
Cars are also available through instalment system plans.
Paying by instalment has enabled many people to own a car when they could not otherwise afford one, but the system has its drawbacks. Nabil Fahmi, who owns a car showroom in Cairo's Bab Al-Louk district, said the instalment system for cars puts both the buyer and the seller at a disadvantage. For the buyer, the final price of the car is very high, after all instalments are paid, because the interest rate ranges from 11 to 16 per cent. If the buyer wants to sell the car after paying the instalments, its price will drop sharply.