Egypt’s promise as a fintech hub in the MENA region

With an increasing local prominence, Egypt’s fintech services market is making its presence felt in the wider Middle East and North Africa (MENA) regions.  This is underpinned by the Central Bank of Egypt (CBE) which is set to launch a USD 100 million fintech fund early in 2020.  Currently, the CBE is facilitating the creation of a subsidised regulatory sandbox, where new services and applications can be developed within the context of robust privacy, security and functionality standards. Additionally, Egyptian fintechs are further supported by an investment of USD 200 million from the World Bank, reports Fitch Solutions.

Fitch Solutions cites certain factors which contribute to Egypt being well positioned to becoming a leading player in North Africa’s emerging fintech services market as follows:

  • Relative under-developed conditions of neigbouring markets
  • Low use of traditional banking services
  • Presence of numerous technologically savvy entrepreneurs
  • Robust and secure communications infrastructure
  • Government support in creating a cashless society


According to Fitch Solutions, 80 percent of Egypt’s 100 million population do not have a traditional bank account.  CBE surveys suggest that less than 13 percent of the country’s 94 million mobile subscribers are signed up to a mobile money service, making fintech a viable option in the country.


MENA region: Cards and mobiles dominate payment landscape - Egyot non-cash methods by market share % (2018)


Regulatory Sandbox

The CBE’s creation of the regulatory sandbox has enabled qualified fintech companies, mentors and investors to test their products and services in a live operating environment since July 2019, reports Fitch Solutions.  The aim is to have participants working with the CBE, other financial institutions and the Egyptian government to develop and refine best practice guidelines, refine new business models for both the consumer and business users and create a transparent and robust regulatory framework.

It is here where disruptive technologies such as cloud-based payment processing, machine learning, data analytics and artificial intelligence will be tested with the assistance from the Information Technology Industry Development Agency (ITIDA), amongst other institutions.


Fintech startup scene

The CBE estimated that there were over 50 fintech investors and companies in Egypt at the end of 2018, including 16 start-up companies and 9 large financial institutions.  The creation of the sandbox has likely catalyzed other initiatives such as privately sponsored incubators and competitions targeting technology companies with wider competencies.



The World Bank allocated funding of up to USD 200 million for the Egyptian fintech sector in April 2019, aiming to increase financial inclusion.  The funding also aims to create new job opportunities, allocating USD 145 million to a project called ‘Catalyzing Entrepreneurship for Job Creation,’ which will disburse loans to small businesses – particularly those led by young people, women and first-time borrowers.  A further USD 50 million will be allocated to venture capital funds, angel investors, accelerators and investment firms.

With the Word Bank’s focus on increasing the supply of seed, early-stage and venture capital to start-ups with the high potential for job creation, fintechs targeting Egypt would have the strongest case for securing loans, says Fitch Solutions.

And with the high number of the unbanked population in the neighbouring countries such as Morocco, Algeria Tunisia and Lebanon, there is scope for many Egyptian companies to become established leaders in these markets.


Source:  Fitch Solutions

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