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The Deep dive: Financial landscape for SMEs in Egypt

By Puja Sharma

July 11, 2024

  • B2B BNPlL
  • B2B SMEs
  • BNPL loans

World MSME Day, MSMEs, Financial Inclusion, SME Lending, Digital Banking, Regulatory, Compliance, FinTech, UK, Europe, France, Finland, Germany, NordicsThe deep dive’ is our bi-weekly exploration of a relevant topic, hot trend, or new product. For Prime subscribers only.

How does it work?

SMEs in Egypt are optimistic about digitalization and have ambitions to continue growing and improving their business through digital tools

  • As Egypt’s e-commerce market picks up, SMEs require simplified tools to develop online storefronts and payment acceptance
  • SMEs are increasingly recognizing the cost-effectiveness, efficiency, and accessibility of B2B digital marketplaces

A new study from Visa, the SME Megatrends report, delves into the ever-evolving financial landscape for Small and Medium Enterprises (SMEs) in Egypt. The report identifies significant opportunities for growth and innovation, particularly in the digital and financial domains, with clear insights that can be leveraged by issuing banks to unlock new revenue opportunities and gain a competitive edge

Digital transformation is paving new avenues of growth and sales for SMEs in Egypt, with an uptick in social media and eCommerce, BNPL and POS financial and e-wallet penetration. The rapid acceleration of digitisation within the region’s SME sector presents a wealth of new revenue opportunities for issuing banks who, by facilitating access to essential financial products and services, can tap into this potential, leading to an expanded customer base, increased transaction volumes, and heightened revenue prospects. By working in partnership with Visa, issuing banks can deliver bespoke financial products tailored to SMEs’ unique needs to actively promote inclusive economic growth.

The Visa SME Megatrends report is an indispensable tool for issuers to better understand SME needs while identifying actionable strategies to customize their offerings for this market segment. Crucially, the report reaffirms Visa’s unwavering commitment to expanding SMEs’ access to the digital economy, fostering a resilient and mutually beneficial business environment for all stakeholders.

Who is under the radar?

Spotlight on Egypt’s SME landscape

Greater Desire for Formalized Financial Services and Access to Credit: Egyptian SMEs remain largely underserved and underbanked, with current formal financing offerings being costly and inadequate for their specific needs. BNPL & POS Financing Are Increasingly Being Adopted by SMEs: BNPL and POS financial solutions are making inroads as tools to boost sales and increase customer satisfaction.

Social Media Driven Commerce is a Key Sales Channel for Informal SMEs: Social media commerce is a vital tool for informal SMEs, empowering them to grow their sales and expand their customer base.  E-Wallets Moving from Issuing to Acceptance: The significant increase in e-wallet penetration in Egypt is transforming the way SMEs get paid and enabling more businesses to go online.

Support Required to Build a Proprietary Online Presence & Payment Acceptance: With the e-commerce market driving SMEs to build an online footprint, they require more robust and simplified tools to enable them to compete online efficiently.  Proliferation of Digital B2B Marketplaces: The wholesale industry is fragmented and highly informal, allowing digital B2B marketplaces to offer SMEs a convenient platform and secure payment methods to connect with a wide range of suppliers.

SMEs Are Increasing Their Use of Digital Business Tools: Digital platforms have an opportunity to enable SMEs to drive operational efficiency, maximize profitability, and create formalized financial management.

Why does it matter now?

Empowering the Ecosystem, Powering Growth

Visa recognizes the pivotal role of SMEs in driving economic growth and is committed to integrating them into the digital economy. Through its extensive network, innovative business solutions and value-added services, Visa collaborates with issuing banks to facilitate SME access to digital tools and financial services, bolstering the digital transformation of SMEs.

Visa has already digitally enabled nearly 67 million SMBs worldwide, leveraging its extensive expertise and partner network, exceeding its three-year goal of digitally enabling 50 million SMBs globally. This achievement underscores Visa’s profound expertise and the strength of its partnerships. By pinpointing ways for issuers to provide SMEs with vital financial products and services, Visa seeks to foster economic growth collaboratively. This effort not only aids SME development but also contributes to a flourishing cycle of prosperity, offering substantial benefits for the economy at large.

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