Fintech Middle East & Africa

How Can Lebanon’s Fintech and Wider Financial Services Industry Thrive in 2020 and Beyond?

Lebanon’s historic ties to the financial services industry in the Middle East and the growth of the fintech industry have shown its importance, even in challenging times such as with Co-VID 19.

Before Co-VID 19 Lebanon’s economy was suffering due to a combination of political and other factors. By the end of last year its debt equivalent was around 170 percent of its gross domestic product (GDP). This includes its other economic issues like the drop of the Lebanese pound and increase in inflation. To top it off, now at present like the rest of the world, the novel coronavirus Co-VID 19 make things worse. Despite these challenges, how has the Lebanese fintech and wider financial services industry been doing? Also, can it be a catalyst to help revive the Lebanese economy?

The Lebanese are a very resilient people – having gone through various cycles of downturn in their economy such as the Lebanese Civil War from 1975-1990. Lebanon’s recovery from that has been promising. Particularly both and prior to the civil war, Beirut (the capital and largest city of Lebanon) is a major financial hub in the Middle East. Before cities like Dubai and Abu Dhabi in the United Arab Emirates (UAE) and Manama in Bahrain, Beirut prior to the civil war was the financial hub of the Middle East. It has its own home-grown banks which includes Bank Audi, BLOM Bank, Fransabank, Societe Generale de Banque au Liban (SGBL), Byblos Bank, and Bank of Beirut.

Beirut – the capital and largest city in Lebanon SOURCE GETTY

In recent memory, although the cities mentioned particularly Dubai have taken that title from Beirut, the city still has an active financial services industry and fintech. According to the 2019 MENA Fintech Venture Report, which was published by MAGNiTT in collaboration with Abu Dhabi Global Market (ADGM), in terms of all fintech startups in the Middle East and North Africa (MENA), after the UAE and Egypt it was Lebanon that was in third place with 9%. It is also the region’s fourth most serviced market by fintech companies.

According to Invest in Lebanon, in 2017, 54 percent of people with a bank account have adopted digital banking in Lebanon. In addition, in 2016, Lebanon ranked second in the region for the percentage of people who only used mobile banking. The country as a whole offers opportunities not just in fintech as a whole but in its sub-sectors such as insurtech and e-payment and paytech.

Particularly in Beirut, the country’s ecosystem supporting fintech has been strong. For example, StartechEUS launched last year, which according to their website is a next-generation fintech studio that builds technology-enabled companies empowering the financial services industry – from growth to a successful exit in international commercialisation. Also, there are various accelerators and incubators in the country such as the Berytech, speed@BDD, Smart-ESA and the UK Lebanon Tech Hub, the ladder being a joint initiative by the Banque du Liban (the Lebanese Central Bank) and the UK government through the British Embassy in Lebanon. There is even an area in Beirut called Beirut Digital District, which is a cluster of innovation designed for the digital and creative community.

In a current and post-Co-VID 19 world, assuming what the World Health Organization (WHO) has called a pandemic, how can Lebanon, coupled with its own internal challenges, overcome and continue to grow?

First, the country must continue to foster its entrepreneurs and encourage the young generation to be innovative and start businesses. The Lebanese are known to be entrepreneurial. In 2018, out of a survey of nine countries in the region (UAE, Morocco, Egypt, Turkey, Iran, Lebanon, Qatar, Egypt and Saudi Arabia), Lebanon had the highest levels of both Total early-stage Entrepreneurial Activity and Established Business Ownership, where nearly one in four adults in Lebanon were starting or running a new business.

Second, the country should continue its collaborative approach with each other and international approach, particularly in reference to exports. In terms of collaboration, what will help further drive fintech in the country such as the banks and the government, need to continue with their joint efforts to promote and protect the ecosystem. For example, partnerships like what Fransabank did with online platform PinPay and Bank Audi’s contactless payment platform Tap2Pay need to continue to happen.

In terms of internationalisation, for instance, many of the Lebanese banks mentioned earlier have international offices and presence throughout the Middle East and beyond. Being such a small country of under 7 million people according to UN estimates, the mindset should continue to be outward looking.

With respect to exports, one of its most noticeable in history has been its people. The country should try to avoid a brain-drain and also encourage investments and other opportunities with its diaspora. Despite the country boosting more Lebanese and their descendants living outside the country than within (particularly in Latin America which Brazil alone has 7 million Lebanese descendants), many in the diaspora have strong ties to the country. A quote I had with Forbes Middle East in 2016 pertaining to this topic can still be relevant, as I said, “Many of the diaspora do go back to visit Lebanon and quite a few return permanently, bringing back the knowledge and skillset they learned overseas. This knowledge sharing in the present and long-term can bring great benefits for the Lebanese economy in its future redevelopment.”

Despite its current challenges, Lebanon is one that continues to strive in good and challenging times. Although Co-VID 19 brings its uncertainty in the global stage, fintech and innovation is here to stay and for a country with a historical past and present history with financial services, it remains important for Lebanon more so than ever.



The article is an original opinion-ed by Richie Santosdiaz.


  • Executive Economic Development Advisor (Emerging Markets) | Contributor

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