Is Egypt at the forefront of regional FinTech development?

By Puja Sharma

As the largest market in the MENA region, accounting for 23% of the MENA population, and the third largest in Africa, Egypt holds the opportunity to grow into a vibrant local FinTech ecosystem and a regional FinTech leader, according to the report by enterprise press on the Egyptian FinTech.

Egypt holds a vast market with an unbanked population of almost 50%, limited technology savviness, 57.3% mobile internet users as a percentage of the total population, and limited trust in digital financial services, and the aforementioned remain barriers to FinTech adoption. Yet, FinTech in Egypt today plays a critical role in resolving nationwide challenges across multiple segments for retail consumers and MSMEs, providing tailored solutions to cater to the dynamics of the Egyptian market, and making digital financial services more attainable to the Egyptian community than ever before.

According to the report by enterprise press, Egypt is among the top 4 African countries in FinTech when it comes to FinTech concentration in the continent. This can be stemmed from extensive growth in the FinTech industry over the last 7 years, from barely 2 startups in 2014 to 112 Egyptian FinTechs and FinTech enabled startups in 2021.

Business stage startup

Around 70% of the FinTech-enabled startups in Egypt are in a stage where their solution is already deployed in the market which reflects the tremendous growth and existence of new startups during the last few years. Around 30% of total startups are in the pipeline of the Egyptian FinTech scene, including those with an advanced concept and working on their MVP as well as those ready with a prototype. This gives an implication that further support and investments are needed for smoother growth of the Egyptian FinTech landscape.

Saudi Arabia’s Vision 2030 blueprint is fueling FinTech development in the country, one of the most promising sectors in the world. There is a flurry of government initiatives being pursued by the Saudi government in the sector. Financial technology is being boosted in all sectors through Fintech Saudi, a central bank initiative.

It was approved by the Saudi Cabinet in June 2022 that the Kingdom’s financial technology development strategy would foster 525 FinTech companies by 2030. Several successful startup executives believe FinTech has considerable room for growth, and more players will yield better services.

Arab News quoted Abdulaziz Saja, general manager of Tabby Saudi Arabia, a leading buy now, pay later platform, as saying “Saudi Arabia needs more advancements and improvements in the area of consumer experience.”

“A greater number of fintech players will benefit the Kingdom if each company focuses on a specific service and creates value through specialization. Middle Eastern and North African economies are dominated by the Kingdom. However, compared to neighboring countries, the number of FinTech players seems low.”

Key Findings

• The Egyptian market’s largest segment will be digital payments with a total transaction value of US$13,540.00m in 2022, according to Statista.
• The average transaction value per user in the Alternative Financing segment is projected to amount to $28.22k in 2022.
• The Neobanking segment is expected to show a revenue growth of 41.2% in 2023.
• In the Digital Payments segment, the number of users is expected to amount to 84.13m users by 2027.
• Total Transaction Value in the Digital Payments segment is projected to be $13,540.0 million in 2022.
• Due to the major differences in the KPIs of FinTech products, e.g. different nature of loan origination volume in Alternative Lending in comparison to Assets under Management in Robo-Advisors, no total transaction value for all segments can be calculated.