Cairo-based Intlaq, a think tank focuses on reshaping the entrepreneurial landscape in local market, in collaboration with the Dutch Enterprise Agency (RVO) and the Dutch Embassy in Egypt, announced on Wednesday the launch of a comprehensive data-driven report that presents the evolving landscape of the financial technology (Fintech) sector in the country.
The report offers a strategic view of the sector, analyzing its growth potential, key market trends, challenges, and opportunities available for both local and international investors.
In the following lines, FollowICT summerize the key figures the report includes that indicate the Fintech Landscape in the country, and recommendations for better performance.
Key Figures
The report highlights that the global growth rate for the Fintech in Egypt stands at 12%, with the penetration rate of financial technology startups in Egypt at 65%.
Regarding financial inclusion in the country, the report indicates that the number of financially included citizens is 27.4 million (2023), with a financial inclusion rate of 70.7%.
As for the ownership of financial cards in Egypt, the distribution the report includes is as follows:
- Prepaid cards: 46%
- Credit cards: 10%
- Debit cards: 44%
Fintech Startups
According to the report, the total number of financial technology startups in Egypt is 139, with 38 companies integrating financial technology solutions into their services.
Regarding investments in startups, the report showed that the average Series A funding round in Egypt compared to the global average is $7.2 million (H2 2020-2022). Moreover, the average Seed funding round in Egypt compared to the global average is $7 million (H2 2020-2022)
Challenges in the Fintech Sector
According to the report, the challenges in the Fintech sector vary between regulatory, financial and labor market
Regulatory Challenges:
- Lengthy licensing processes
- High compliance costs
- Ambiguity in regulations
- Frequent changes in regulations
Financial Challenges:
- Limited availability of funding
- Risk-averse investors
- Low presence of international investors
Labor Market Challenges:
- Difficulty in finding specialized talent
- High employee turnover rates
- Lack of financial technology knowledge
Skills of the Future in the Fintech sector
- Programming (Python, Java)
- Data Science and Analytics
- Artificial Intelligence (AI) and Machine Learning
- Cybersecurity
- Blockchain Technology
Key Supporting Initiatives and Programs For the Sector
- 2016: Launch of the first financial technology accelerator program in Egypt
- 2019: Establishment of NilePreneurs to support entrepreneurs
- 2022: Launch of the Nclude Fund to invest in financial technology
- 2023: Creation of a digital academy for building skills in financial technology
- 2024: Launch of the “FinTech Minds” challenge by the Arab African International Bank
Recommendations for Sector Development
- Expanding startup financing programs, especially in underserved regions
- Launching government incentives to retain local talent
- Strengthening digital infrastructure, especially in Upper Egypt and Sinai
- Enhancing collaboration between banks and startups to facilitate the adoption of innovative financial solutions