You're all invited - to a fake wedding

Such events, to raise funds by getting cash from guests, are normal in Egypt

CAIRO - By the time the booze was drunk, the hashish smoked and the five belly dancers had concluded their gyrations, the groom had collected US$16,000 (S$21,400) - a "profitable wedding", in his words.

His bride wasn't there. No matter .

"Some people hold weddings to celebrate, others do it as a business," said the groom, Mr Mohammed, a used-furniture salesman.

'PROFITABLE WEDDING'

Some people hold weddings to celebrate, others do it as a business.

- Used-furniture salesman Mohammed, on his wedding

For him, the party was one of a series of fund-raising events put on by his community group, a collection of hundreds of friends and relatives. One day, he gives money to a fellow member. On another day, he is the recipient.

It is all part of Egypt's vast informal economy, one that accounts for an estimated 40 per cent or more of the country's gross domestic product. With a quarter of this nation of 87 million living in poverty, street weddings like Mr Mohammed's, along with similar schemes, offer Egyptians who rarely set foot in a bank a chance to secure funds. 

Raising money through group events comes from a traditional collective savings arrangement that Egyptians - and others across the developing world - have used for years.

The weddings are sometimes real and those who attend bring cash to help the young couple start their new life together.

At other times, wedding-like parties without an actual ceremony pop up as a means of mutual funding. The most common form, however, is when family and friends hold money collectives without celebrations. All three continue to thrive.

Bringing such transactions into the formal sphere is a key challenge for President Abdel-Fattah El-Sisi as he seeks to broaden the tax base, trim one of the region's most bloated budget deficits and revive an economy battered by years of political unrest in the wake of Hosni Mubarak's 2011 ouster as president.  It is not easy.

"Dealing with banks carries a lot of requirements that do not fit the nature of the Egyptian economy," said Mr Faika El-Refaie, former undersecretary of the Central Bank of Egypt.

"The majority of people have very low incomes while those who make decent money don't have documentation for it." 

Mr Mohammed falls into the second category. His furniture business does well but is run out of an apartment and he does not pay taxes. His one attempt at securing a bank loan failed because the bank wanted collateral and the interest rate was prohibitive. He tapped his network of family and friends.

On entering the vast pavilion set up on the closed-off street for the wedding, Mr Mohammed's guests were given flamboyant salutes by the master of ceremonies. After a sampling of delicacies, each made his contribution in cash. Two of Mr Mohammed's associates counted the money and registered it in a notebook.

If Mr Mohammed does not later contribute to those who came to his wedding, his reputation will be damaged - if not worse.

"People can get killed," he said of those who fail to pay.

The amount of cash outside Egypt's banking system was demonstrated last year when the government sold 64 billion Egyptian pounds (S$11.3 billion) in local certificates of deposits to finance a parallel Suez Canal. About 42 per cent of the amount was raised from "under the floor tiles", central bank governor Hisham Ramez said at the time.

"Banks and these kinds of things are not for us," Mr Mohammed said. He held his real wedding, days later, in front of a small group of friends and family. The bride this time was in attendance.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on June 25, 2015, with the headline 'You're all invited - to a fake wedding'. Print Edition | Subscribe