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The Central Bank of Egypt (CBE) has emphasized that the financial technology sector plays a crucial role in driving the development of Egypt’s banking and financial industry.
With a conducive environment for growth, Egypt witnesses the introduction of various fintech solutions annually, making it a fertile ground for advancing this vital sector. The nation’s financial technology market acts as a catalyst for innovation and is poised to become a pioneer in the region.
Promoting Innovation in Financial Technology
In its recent Financial Technology Egypt 2023 Perspective Report, CBE revealed Egypt’s determination to support and encourage innovation in fintech. This commitment aims to reshape the economy, reduce reliance on cash transactions, and transition towards a digital economy—an essential aspect of the nation’s economic reform program and sustainable development strategy, aligned with Egypt’s National Vision 2030, led by President Abdel Fattah El-Sisi.
Notable Growth and Partnerships
Over the past year, the financial technology landscape in Egypt has witnessed remarkable advancements, driven by increased stakeholder participation. Regulatory agencies’ joint efforts have contributed significantly to creating a conducive environment for private enterprises.
The fintech ecosystem continues to evolve rapidly, offering diverse capabilities across sectors and daily life activities. With cashless and contactless payment methods becoming the norm, the industry aligns with customers’ expectations and technological advancements.
Egyptian startups have emerged as a catalyst in attracting local, regional, and international investors, with the financial technology system experiencing unprecedented growth.
Key Sub-Sectors and Client Demographics
Within the fintech ecosystem, three sub-sectors—payments and transfers, lending and alternative financing, and business owners’ platforms—dominate the landscape, accounting for about 60% of startups in the field.
The total number of financial technology startups and payment service providers’ clients in Egypt reached 99.9 million by the end of 2022. Females constitute nearly a third of the clients, representing 4.4 million out of 15.6 million clients. Active female customers demonstrated higher engagement rates than their male counterparts.
Venture Capital and Investment
Venture capital and angel investments play a significant role in the financial technology sector, accounting for about 65% of total investments over the last three years. In 2022, private equity investments surged to 55% of total investments.
The financial technology ecosystem’s total venture capital investment reached a new record of $358.8 million in 2022, marking a substantial increase compared to 2019.
Challenges and Opportunities
Despite remarkable progress, challenges persist. Startups seeking financing, particularly in the seed funding stage, face hurdles due to a lack of investors. Networking and business forums, as well as international and regional exhibitions, are among the key requirements for obtaining financing.
Looking Ahead
With robust government support, strategic partnerships, and a vibrant startup ecosystem, Egypt is positioned to take the lead in the MENA region’s financial technology landscape. The nation’s pursuit of financial technology innovation is set to transform its economy into a digital powerhouse, ensuring sustainable economic growth and financial inclusion in line with its national vision.
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