Fintech Middle East & Africa World-Region-Country

How The Largest Country In the Middle East (and the Third in Africa) is Ideal Fertile Ground For Fintech Growth

Situated both in the Middle East and in Africa, Egypt has a large domestic market which has yet to be fully saturated. With its wider economic strategies both generally and specifically with fintech, the country can help accelerate and transform its economy and fulfil its future aims.

When looking at the Middle East look no further than Egypt. This is, by population, the largest country in the Middle East with over 100 million people. Also by population it is the third largest country in Africa behind Nigeria and Ethiopia; globally it would be the 14th largest. Egypt’s largest city, Cairo, if counting the Greater Cairo area, is one of the world’s largest cities with over 20 million inhabitants.

At present, Cairo alone is both a major financial hub in the Middle East and Africa. With regards to fintech, Egypt last year actually ranked first by number of investment deals (142) in the Middle East and North Africa (MENA) according to MAGNiTT’s 2019 Egypt Venture Investment Report, accounting for 25% of total deals in the region. By total funding, the same MAGNiTT report showed Egypt ranking second after the country ranked second after the United Arab Emirates (UAE) by total funding ($95M), accounting for 14% of total funding raised in MENA.

Greater Cairo has a population of over 20 million people IMAGE SOURCE GETTY

Also, according to the Findexable Global Fintech Rankings 2020, Cairo just missed the global ranking at 106th place. Four African cities that made the top 100 were Johannesburg, Nairobi, Lagos, and Capetown, while Dubai and Tel Aviv were the only two from MENA. How is Egypt able to attract and continue to grow its fintech sector and be a hub for both the Arab world and Africa?

Egypt’s population is large yet underutilising solutions that fintech and wider digital can facilitate. This also stems to general banking, where, it is estimated that 67 percent of Egypt’s population is still unbanked. An article from Wamda from 2019 quoted Ayman Hussein, sub-governor of payment systems and business technology sector at the Central Bank of Egypt (CBE), saying that the biggest challenge is culture – where Egyptian culture has historically been more cash-based.

Despite that, it has a mobile penetration rate of 102 percent with 28 million smartphone users. According to the Arab Youth Survey 2019, only 35 percent of youth in North Africa preferred card pay online. This of course doesn’t factor in the global norm at present of social distancing and contactless for health reasons due to a Co-VID 19 world and the technological advances after the survey. This most likely will increase the interest for a digitalise solution in many daily interactions.

There has been interest globally to help boost Egypt’s capabilities. For instance, Egypt (alongside China and Mexico) have been the pilots for the three-year long The Financial Inclusion Global Initiative (FIGI) that started in 2017, which was launched by The World Bank Group, the International Telecommunication Union (ITU) and the Committee on Payments and Market Infrastructures (CPMI), with support from the Bill & Melinda Gates Foundation; aim is to advance research in digital finance and accelerate digital financial inclusion in developing countries.

The Sovereign Fund of Egypt (TSFE) also announced recently this month its intention to launch four sub-funds (one of which is fintech) that presents significant investment opportunities due to global pandemic of Co-VID 19.

Other wider government initiatives have included the announcement of the The CBE’s Fintech strategy last year in March, which aims to be “a regionally recognized Fintech hub in the Arab world and Africa, home to next generation financial services, talent and innovation development.” It is based on the integration between Sustainable Development Strategy (SDS): Egypt Vision 2030 (Egypt’s national economic development and prosperity transformation) and the CBE’s vision to meet the needs and aspirations of the Egyptian market. Highlights mainly from 2019 as part of the implementation of the strategy include:

  • A non-cash payment law – Through a regulatory framework for non-cash payments
  • CBE Regulatory Sandbox (first batch trail operation on July 2019) – Where innovative solutions can be tested in a live and controlled environment
  • “Meeza” – National payment card – Aiming to create and manage a national payment card system; 4 million cards have been issued so far
  • Fintech Egypt – Flagbearer facilitating collaboration between ecosystem participants
  • FinTech and Innovation Department – Oversee Egypt’s Fintech strategy and also managing the strategic initiatives
  • EGP1b Innovation Fund – help fuel the growth of ecosystem (startups, youth, and infrastructure)

From a population and talent point of view, Egypt’s large domestic market brings opportunity. Also, it is worth noting the potential and capability development of its population. Egypt is a young population, where around 60 percent are under 30 years old. Also, Egypt ranks in the top seven nations globally that consider entrepreneurship in high regard as a career, according to the Global Entrepreneurship Monitor. 55 percent of Egyptians are interested to start a business in three years – twice the global average. Finally, Cairo is home to some of the best universities in both Africa and the Middle East such as the American University of Cairo (AUS) and Cairo University. Cairo universities in total have over 250,000 students graduate (25,000 at least have technology backgrounds).

Geographically both in Africa and the Middle East, Egypt’s unique opportunity to implement its strategic fintech ambitions in its large domestic market and between the two regions it sits strongly positions itself to be a major player in the space. It can serve and bring innovations to its 100 million plus domestic product and be a bridge between two major regions and beyond.


The following is an original opinion ed by Richie Santosdiaz


  • Executive Economic Development Advisor (Emerging Markets) | Contributor

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