Ecosystems

Fintech Ecosystems in the Arab Region

Overview

Fintech is reshaping the financial landscape in the Arab World, recently becoming the most-active sector for startup investment in the region.

The need for financial inclusion is real. Today, the Arab World has one of the world’s lowest financial inclusion rates where almost 2-in-3 Arab adults do not hold bank accounts. The financial system’s traditional structure, comprised mainly of banks, have historically had high overhead costs deeming many individuals as not profitably serviceable

Some segments are disproportionately excluded from financial services. Women, for instance, face certain barriers and similarly, small and medium enterprises (SMEs) have limited access to financial services (mainly credit facilities).

Recently, fintech has disrupted the operations and delivery of financial services throughout the globe with more potential yet to be tapped. Through digital outreach, customized solutions, innovative credit reporting and scoring, and other methods, excluded groups are now accessing and reaping the benefits of financial inclusion.

Through partnering with fintech firms, financial institutions have reduced operational costs, extended reach to a larger target audience through remote channels and optimized their offerings by using disruptive technologies in their core operations.

The fintech industry has been gaining momentum both in terms of number of firms and early-stage investments raised. While currently representing around 1 percent of global FinTech investment, the fintech sector across the region is growing at a high rate, attracting more VCs and angel money. Nevertheless, both institutions and fintechs are still facing major challenges such as cost of regulatory compliance, lack of growth investment capital, or unavailability of qualified talent.

The Ecosystems section of our platform offers a comprehensive analysis of the fintech ecosystem across many countries in the Arab World. We look into the general country overview, the 5 pillars of an ecosystem, major investors and fintechs in the space as well as latest regulations and initiatives. The Ecosystem page of FinX22 is still being prepared and will go live towards the end of September 2020.