The Fintech Times FINTECH Middle East & Africa 2023

FINTECH

THE MIDDLE EAST & AFRICA REPORT 2023

ECONOMIC DEVELOPMENT THROUGH PROSPERITY WITH FINTECH

PRESENTED BY

Welcome to the Fintech Middle East & Africa 2023 Report

hank you for taking the time to read this latest edition, now in its third year following a successful pilot in 2021 and last year's edition.

Despite the relatively short time between the last report and this one, there have been significant global developments, both in the wider economic context and in the tech, digital, and fintech sectors. MEA has also experienced growth, driven by its unique opportunities and challenges.

As someone who is no longer new to the region, I find MEA to be an exciting and dynamic area that shines a spotlight on emerging economies. From the wealthy Arabian Gulf region to the less affluent parts of the Middle East and Africa, the region is undergoing some of the biggest transformations the world has ever seen.

I am grateful for the support I received while writing this report earlier this year, both from the report team and personally. I would like to thank my family and friends, as well as The Fintech Times team in London, including Mark, Chris, Claire and Emily for their professional and personal support. I would also like to express my appreciation to the wider team, including Jason and Raf.

Whether you are familiar with MEA and fintech or are new to the region and the industry, I hope you will find this report informative and insightful. So, sit back, relax and enjoy the report!

Author Richie Santosdiaz, Economic Development Advisor – Emerging Economies, The Fintech Times CEO

Seamless: Connecting the

digital commerce ecosystem

Seamless is a leading event series in the region focused on the future of payments, e-commerce and retail. Over the years, the event has provided a platform for industry leaders, experts and stakeholders to network, exchange ideas and showcase innovative solutions.

Joseph Ridley (above), general manager of Seamless Middle East, outlines how Seamless plays a significant role in shaping the future of digital commerce and how it plans to expand globally.

What inspired you to start Seamless?

Ultimately the vision for Seamless has always been to create one of the largest global events that brings together banks and financial service providers, government, merchants and retailers of all sizes, to help them with their digital transformation journeys and to better serve SMEs, consumers and citizens. The end goal is to provide a platform and catalyst that drives digital commerce in the new digital economy.

How has the event evolved over the years?

Twenty-three years ago, the event brought together 300 people at the Al Bustan Rotana hotel in Dubai, to discuss the impact of debit and credit cards on the banking industry. Fast forward to today and we will bring together 20,000+ attendees from across the globe for the 23rd edition of Seamless Middle East. On the banking, fintech and identity side of the event we have witnessed unprecedented change, the event will be addressing topics such as creating cashless economies, how new financial technologies and services can drive financial inclusion, literacy and enable financial inclusion for underserved segments such as women, youth and SMEs, how the adoption of new technologies such as AI, digital currencies, digital identity, eKYC and cloud based technologies can create better transparency, operating efficiencies and improve better customer experience, profits and much more.

The audience has evolved too, new job titles and departments focused on new technologies are emerging on a daily basis as the

traditional institutions have to understand and embrace the digital change and new customer expectations. Then of course there are the thousands of new market entrants, fintechs and start-ups who are disrupting the traditional models.

How do you select exhibitors and speakers?

Our sponsors and exhibitors are the global leaders in either payments, fintech, identity, retail, e-commerce, home delivery or digital marketing. We’re fortunate enough to be met with huge demand for space on our exhibition floor so we find we are working with the best of best global companies looking to break into the Middle East or want to carry on asserting their place in this competitive market. The same goes for speakers, we have an entire team dedicated to research into the market trends and who the biggest names are for the industry, and we make sure they come and speak at our event to help drive important conversations forward.

What are your future plans for Seamless?

In 2024, we are doubling the size of the exhibition floor space to allow us to accommodate the demand that we are getting from both local and international exhibitors looking to grow their business across the region, our goal over the coming years is for Seamless Middle East to be the global digital commerce event that connects east with west capitalising on the strategic positioning of Dubai and the United Arab Emirates.

We are also excited to continue to build on our two newer profiles which cover last mile, retail logistics and digital ecommerce channels: Seamless Home Delivery and Seamless Digital Marketing. These are designed to help brands connect and engage with their customers utilising the new technologies that are now available to them. Globally, Seamless runs in North Africa (Egypt), Asia (Singapore), Saudi Arabia, Africa (South Africa) and new for 2023 Europe (Germany). All of these markets are exciting and hold lots of opportunity for growth though Berlin is an exciting launch as we look to bring together the European payments and commerce market in October 2023.

ON THE AGENDA AT

■ The dawn of digital banking across the ME: Making giant steps to ensure the region’s placement as a forward thinking fintech hub

■ The fintech dilemma: When to scale up your business?

■ Collaboration and interbank ecosystems: Accelerating the transformation of banking services vfor tomorrows agenda

■ Money in the metaverse for the immersive experience: Ensuring secure and reliable ways to pay for virtual goods, paramount for the modern consumer

■ The rise of the banking super-apps: Taking on an aggregator role

■ The future of cross-border payments: Supporting the next generation for a transparent existence

■ Approaching the MeTaFi era in the face of the banking industry: A journey or a destination

■ New entrants acting as the top drivers of cryptocurrency growth: Aggregating the market

Economic development through prosperity with fintech

PURPOSE OF THE REPORT

This report aims to provide a detailed analysis of the fintech landscape in the Middle East and Africa (MEA). It begins with a macro-level overview and then delves into specific aspects of the industry to offer a comprehensive picture of the fintech ecosystem in the region.

REPORT OVERVIEW

Similar to the 2022 version, this report is divided into four chapters, providing a comprehensive overview of the fintech landscape in the Middle East and Africa (MEA).

It covers the region's economic development and how its market demand and government support have impacted the growth and development of the fintech industry in MEA. The report showcases how fintech has truly brought inclusion to a region where many are financially excluded.

The subsequent chapters delve into key subsectors of the fintech landscape and rank 23 different fintech hubs, categorising them into a three-tier system through analysis of various economic, digital, and fintech-specific factors. The report also includes a country overview of all 23 hubs. Finally, the report concludes with a summary, predictions, and future framework

analysis for the sector's future vision and its contribution to wider economic development.

The MEA report provides a solid reference point for readers, including those who may not be familiar with the region or fintech, as well as those who are more in-tune with either or both. Home to a quarter of the world's population, the MEA region presents a diverse range of cultures and socio-economic backgrounds that share a common need for digitalisation and improved financial services. Fintech could be the answer to many of these needs, despite ongoing global economic challenges. The following will serve as the baseline for the report:

CHAPTER ONE: OVERVIEW OF THE MIDDLE EAST AND AFRICA

The report provides an in-depth analysis of the MEA region, beginning with its geography and economy, before narrowing down to the financial services and tech sectors, and finally focusing on financial technologies (fintech).

Despite the diversity of the region, with some of the world's richest, poorest, and fastest-growing economies, there are commonalities, such as reliance on natural resources and a traditional mindset in financial services institutions.

However, the rise of digitalisation and the need for economic diversification has brought new challenges to the region, which is not yet fully prepared to adapt. Economic development strategies and visions for economic diversification are being implemented to address these challenges, and economic integration among neighbouring countries is viewed as a key driver of collaboration and innovation.

With a young population that is mobile-friendly, the lack of basic digital infrastructure, such as internet access, remains a challenge. Moreover, the majority of the population remains either unbanked or underbanked, making the region a dynamic one with significant potential for fintech growth.

CHAPTER TWO: FINTECH LANDSCAPE IN THE MIDDLE EAST AND AFRICA

This section of the report focuses on the relationship between financial technologies and their impact on the MEA region. To begin, the sector is given a comprehensive overview, including the number of fintech solutions in the region and their specific functions.

The majority of the section is dedicated to breaking down the various sub-sectors of fintech in relation to MEA. Historically, much of the region's fintech has centred around payments, money transfer, and remittances. However, the sector has since expanded beyond these areas, and now includes insurtech, gametech, regtech, wealthtech, investing, digital currencies (including cryptocurrencies), lending, and open and embedded finance. This chapter provides an overview of each sub-sector and its impact on the region.

As a first step, the report provides a visual overview of a sample of fintechs that are part of this ecosystem, along with other relevant graphics related to the fintech industry. Following this, the report showcases excerpts from key ecosystem players that are relevant to the MEA fintech environment.

CHAPTER THREE: FINTECH HUBS OF MEA

Chapter Three of the report examines the fintech hubs in the MEA region and how they operate. After evaluating 23 countries based on various criteria, the report categorises them into a three-tier system. This was done using three simple sets of criteria:

■ Wider economic development criteria: For any sector, including fintech, to thrive, it needs an ecosystem that promotes economic growth and prosperity. The report evaluated the 23 countries based on six different criteria related to this topic.

■ Tech and digital: The benefits of tech and digital cannot be overlooked in the fintech industry. The report evaluated the 23 countries based on three different criteria related to this topic.

■ Fintech-specific: The report used four fintech-specific criteria to evaluate the 23 countries.

Based on these indicators, the report categorises the countries into three tiers. Israel and the United Arab Emirates (UAE) were the highest Tier-One hubs, while Saudi Arabia and Turkey ranked the highest in the second tier. The ‘Big Four’ in Africa (Egypt, Nigeria, Kenya, and South Africa) all scored well and are solidly in Tier-Two hubs.

The report highlights that economic development and prosperity, coupled with digital and fintech-specific indicators, are crucial in propelling the ‘fintech hub’ of the ranked countries.

CHAPTER FOUR: THE FUTURE

This chapter delves into the question of partnerships - whether to go it alone or pursue mergers and acquisitions (M&As) in relation to the collaboration between fintech and financial services, as well as other third-party players such as telecommunications companies.

Later, the chapter reflects on the top 10 predictions for the MEA region from 2022 and evaluates their current validity in 2023. These predictions cover various topics, including the ongoing challenges of the global economy, the diversification of the region's fintech sectors beyond payments, and a future framework for the growth and contributions of fintech to the MEA region, building upon the previous edition of this report.

Financial inclusion through fintech remains a key theme for MEA, and the chapter concludes with a final summary of its findings.

Despite the diversity of the region, with some of the world's richest, poorest, and fastest-growing economies, there are commonalities, such as reliance on natural resources and a traditional mindset in financial services institutions

Middle East and Africa Report 2023

Fintech Landscape in the Middle East and Africa

Chapter Four 94-103

The future of fintech in the Middle East and Africa and beyond

Chapter Five 104-110 Appendix

Chapter One Economic development overview of the Middle East and Africa

The Middle East and Africa (MEA) region is diverse, encompassing varied landscapes, cultures and economies. It includes some of the world’s wealthiest nations, which have acquired their wealth through natural resources such as oil and gas or by becoming leading global tech hubs.

The following chapter will highlight key aspects of the MEA landscape to help readers conceptualise the region's overview, which will serve as a baseline for the report's focus on financial technologies or fintech.

■ a. Geographical overview

■ b. Economic overview

■ c. Financial services overview

■ d. Tech and startup overview

■ e. The MEA consumer and financial inclusion

■ f. Economic diversification and digitalisation economic development

■ g Summary: Key takeways

a.Geographical overview

The following pages will provide an illustrative overview of the Middle East and Africa (MEA) region. This will help readers contextualise its geographical dispersion, as well as the key acronyms and common terminology used in reference to different parts of the region. These terms will be used not just throughout this report, but also in other sources of information about the region.

MIDDLE EAST Bahrain, Qatar, UAE, Oman, Yemen, Lebanon, Saudi Arabia, Jordan, Iran, Iraq, Syria, Israel and Palestine

NORTH Algeria, Egypt, Libya, Mauritania, Morocco, Tunisia and Western Sahara

SOUTH Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Zambia Swaziland and Zimbabwe

CENTRAL Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon and São Tomé and Príncipe

WEST Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Mali, Guinea-Bissau, Guinea, Liberia, Niger, Nigeria, Senegal, Sierra Leone and Togo

EAST Comoros, Djibouti, Ethiopia, Eritrea, Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Somalia, South Sudan, Sudan, Tanzania and Uganda

Geographical Overview of

~30million sq km land area

3 continents – Asia, Africa and Europe (plus parts of Turkey)

Africa

■ AFRICAN UNION (AU) - continental union consisting of 55 member states located on the continent of Africa

■ CENTRAL AFRICA – Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon, São Tomé and Príncipe

■ EASTERN AFRICA – Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Somalia, South Sudan, Sudan, Tanzania, Uganda

■ NORTHERN AFRICA – Algeria, Egypt, Libya, Mauritania, Morocco, Sahrawi Arab Democratic Republic, Tunisia

■ SOUTHERN AFRICA – Angola, Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa, Zambia, Zimbabwe

■ WESTERN AFRICA – Benin, Burkina Faso, Cabo Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Tongo

■ SUB-SAHARAN AFRICA – all of Africa minus North Africa

*Burkina Faso, Mali, Guinea and Sudan, as of Feb 2023, are suspended from the African Union

54 members of the African Continental Free Trade Agreement (AfCFTA) (all of AU members minus Eritrea) – as of Jan 2023

69 Countries

The Middle East

■ THE GULF COOPERATION COUNCIL (GCC) – with members including Kingdom of Saudi Arabia, Kingdom of Bahrain, Sultanate of Oman, State of Qatar, State of Kuwait and the United Arab Emirates (UAE) – is a political and economic union in the Arabian Gulf region

■ THE LEVANT REGION –Jordan, Syria, Lebanon, Israel and the Palestinian Territories (the West Bank & Gaza)

■ GULF REGION NON-GCC – Yemen, Iran, Iraq

■ TURKEY

■ NORTH AFRICA – Algeria, Egypt, Libya, Mauritania, Morocco, Tunisia, Sudan and Western Sahara

the Middle East and Africa

Sources: The Fintech Times, Africanews, African Union, GCC

Image: Richie Santosdiaz and The Fintech Times

b.Economic overview of MEA T

he following section will use the World Bank's latest classification, as of 1 July 2022, which is updated annually, and is based on countries' gross national income (GNI) per capita. High-income countries are those with a GNI per capita of over $13,205, followed by upper-middle-income countries with GNIs between $4,256 and $13,205. Lower-middle-income countries have GNIs between $1,086 and $4,255, while low-income countries have GNIs under $1,085.

HIGH INCOME NATIONS

There is a small group of nations that fall under the high-income category, and they comprise of the countries in the Gulf Cooperation Council (GCC) – Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Oman, and Bahrain – as well as Israel.

The discovery of oil last century transformed this region drastically, which was previously a mostly nomadic society. Today, it boasts some of the world's highest standards of living, with Qatar having the highest GDP per capita in MEA (and one of the highest in the world).

There have been some non-oil successes, notably in the commercial and financial hub of the UAE - Dubai. Oil, which at one point was over half, now only contributes less than one per cent of Dubai's GDP. This has been attributed to its investments and prioritisation of sectors, notably logistics and transportation, tourism, and financial services. For instance, in 2019, Dubai was the fourth most visited city in the world behind London, Paris, and Bangkok. This and the city's wider economic development can be attributed to the success of Emirates Airlines.

The Kingdom of Bahrain was the first in the GCC, from as early as the 1960s, to diversify its economy via non-oil sectors such as finance, tourism, logistics, and wider services industry. Today, all six of them are prioritising economic diversification that will create a future that isn't necessarily oil-reliant and one that can further boost their standard of living.

Beyond the GCC, the other notable high-income nation, Israel, despite not having many resources compared to its oil-rich neighbours, has been able to transform itself into a leading economy focused mainly on services. In particular, its high-tech industry has

OVERVIEW OF MIDDLE EAST AND AFRICA

+1.8 billion population in MEA

3.4 billion people by 2050

One in four of world’s population lives in MEA

30% MEA population between 15-29 years old

POPULATION OVERVIEW

Top 5 largest countries (population)

1. Nigeria +221million (left)

2. Ethiopia +125million

3. Egypt +112million

4. Dem. Rep. of Congo +99million

5. Iran +87million Urbanisation rate +70% in Middle East urbanised

+59% in Sub Saharan Africa rural v

Main languages spoken

■ Arabic (Middle East and North Africa)

■ Swahili (Eastern Africa)

■ French (various parts of Africa)

■ Portuguese (mainly Mozambique, Angola, Cape Verde & Guinea Bissau

■ English (various parts of Africa)

■ Hebrew (Israel)

■ Turkish (Turkey)

■ Farsi (Iran)

Top 5 largest cities (population – metropolitan)

1. Cairo, Egypt (left)

22+million

2. Kinshasa, DR Congo 16+million

3. Lagos, Nigeria +15.9 million

4. Istanbul, Turkey +15.8 million

5. Tehran, Iran ~9.5 million

HIGH INCOME NATIONS: Qatar is the richest nation, according to various metrics including GNI per capita, in the Middle East and Africa

produced and contributed many advancements leading the country to earn the nickname 'Startup Nation', as it boasts the most startups per capita in the world. Much of its success can be attributed from the 1960s (and later again in the 1980s and 90s) when it began economic reforms to liberalise its economy. Also, the arrival of up to a million former Union of Soviet Socialist Republics (USSR) citizens during its fall, many of whom were from technical backgrounds, further drove entrepreneurship and a high-knowledge economy.

Apart from the GCC and Israel, there is one African nation that often goes unnoticed but qualifies for the high-income list, and that is Seychelles. Located in the East Indian Ocean, the East African island nation is often ranked as the richest nation in the African continent based on indicators such as GNI per capita. Its economy relies on financial services, tourism, and other sectors.

UPPER-MIDDLE INCOME NATIONS

The representation of upper-middle-income nations in MEA is not comprehensive, with Southern African nations like South Africa, Botswana, and Namibia, East African nations such as Mauritius, and Middle Eastern nations, mainly Jordan, Iraq, Libya, and Turkey being among them. Other standouts include Equatorial Guinea.

Many of these nations, such as Equatorial Guinea, Libya, and Iraq, have acquired relative wealth through natural resources like oil and gas, explaining why their GNIs per capita are high ($5,150, $8,700, and $4,760 respectively). Others, such as Mauritius, may have more limited natural resources and have had to rely on a more diversified economic approach. For example, Mauritius has built a business process outsourcing (BPO) and a strong financial services sector, coupled with other robust sectors like tourism. South Africa and Turkey, which may have various natural resources, also have diversified economies.

ECONOMIC OVERVIEW

+$3.14 trillion

Nominal GDP of Africa (2023 estimates)

19 out of 20 poorest countries in the world are in MEA (mostly in Africa)

Poorest country in the world

In addition, most upper-middle-income nations have relatively modern and high-quality infrastructure, which helps to foster their various strength sectors or elevate their GNI per capita if they are reliant on natural resources. For instance, South Africa has a relatively advanced financial services sector that has allowed it to be a significant financial centre in the region

Nations with natural resources, such as Iraq and Equatorial Guinea, have the potential to use their wealth to boost economic development and the quality of life of their populations. Iraq and Libya have had significant wars and conflicts in recent years, and

UPPER-MIDDLE INCOME NATIONS: Turkey is an example of a upper-middle income nation in the Middle East and Africa

their future developments remain uncertain. Although a high GNI per capita suggests relative prosperity, it does not necessarily mean an overall improvement in the country. In many developing and emerging economies, political and economic challenges, as well as inequality, remain significant challenges.

+$5.08 trillion

Nominal GDP of Middle East (2023 estimates)

Economic Breakdown

Natural resources like a oil & gas, gold play a strong part across much of MEA

12 of 13

OPEC members are MEA countries

Services

Financial services and tech are playing a growing role in the wider MEA context

Top 3 richest countries (GDP per capita)

1. Qatar (left) $66,838.40

2. Israel $52,170.70

3. UAE $44,315.60

Most startups

per capita in MEA and the world

– Israel (1,400 startups per person

MEA city ranking

highest in top 20 financial services hub – Dubai (17th)

(GDP per capita) Burundi $270

G20 Three MEA countries (Saudi Arabia, Turkey and South Africa) are part of the G20

International trade, past and present plays a strong role in MEA’s economy

Egypt’s Suez Canal

12% total global trade passes through Suez Canal

$7.9billion revenue generated directly for Egypt in 2021

Dubai

■ Busiest port (Jebal Ali) in MEA (only one in top 10 globally)

■ Busiest international airport in the world

Source: The Fintech Times, Global Financial Services Index, World Population Review, GoToMEA, Startup Nation MFAT Image: Richie Santosdiaz and The Fintech Times

LOW-MIDDLE INCOME NATIONS

Similar to the upper-middle income countries, countries in the MEA region that fall under this category share common traits. First, many of these countries have abundant natural resources, such as Nigeria which has significant reserves of oil and gas. Agriculture is also an important contributor to their economies. However, wealth distribution tends to be more uneven compared to their higher-income counterparts. For instance, Nigeria is the largest country in Africa by population, with over 200 million people.

LOWER-INCOME NATIONS

In comparison to the well-advanced high-income countries and the mid-level ones, the low-income economies are noticeably not as economically advanced for their own reasons – political, economic, social. In addition, it appears that many of these countries depend on development aids and subsidised loans from multilateral lenders to survive. Also, as mentioned with many in the low-middle income nations, remittances also play a strong role in their economies, which further bring much needed foreign currency in their economies.

Unfortunately, the 10 poorest countries in the world based on GNIP per capita were all but one were MEA countries (all African and the one non-MEA was Afghanistan): 1. Burundi £240, 2. Somalia £450, 3. Mozambique £480, 4. Madagascar £500, 5. Afghanistan £500, 6. Sierra Leone £510, 7. Central African Republic £530, 8. DR Congo £580, 9. Niger £590, 10. Liberia £620.

Furthermore, some countries in this category have specific industries with the potential to become global players, but are still developing them at a regional level. For example, Kenya and Nigeria both have growing tech industries and robust financial and commercial ecosystems, making Nairobi and Lagos, respectively, regional hubs.

Remittances – money earned abroad by citizens - also play a significant role in the economies of these countries. Egypt, for example, is the largest recipient of remittances in MEA and ranks in the top five globally.

Finally, these countries have potential for advancement, but political, economic, and other factors hinder their progress. Corruption is a significant challenge in many of these countries.

Lebanon, for instance, was a high-middle income nation for nearly three decades but has now fallen into this category due to ongoing political and economic challenges, which caused its GNI per capita to drop from $5510 in 2021 to $3450 last year. Similarly, Iran's GNI per capita fell from $5,240 in 2019 to $2,870 in 2021 due to political and economic challenges, compounded by sanctions.

It doesn’t help that much of Africa is poor and consequently doesn’t help with its own economic development. As highlighted in the first edition of this report last year, Africa has the highest rates of child mortality (one in six) and malnutrition (36 per cent) in the world in children up to five years of age. The continent has the worst schooling outcomes in the world (51 per cent out of school) in the age group from six to 14 years.

While some might have resources, their own political, economic development and social factors have prevented them to further rank higher. Unfortunately, which isn’t much common knowledge, much of Africa remains to be in this case.

To note, through observing, it might be hard to forget but not all of the MEA low income nations are in MEA. Notable ones in the Middle East based on the GNI category would include Syria and Yemen, which at latest figures were £760 and £840 respectively. Both have been undergoing internal conflicts that have displaced millions and have affected their economic situation overall.

LOW-MIDDLE INCOME NATIONS: Nigeria is a low-middle income nation in the Middle East and Africa

LOWER INCOME NATIONS: Mozambique is an example of a lower-income nation in the MEA region

c.Financial services overview

The following provides an overview of the financial services landscape in the MEA region. Financial services encompass a wide range of offerings, including payments and insurance – to name a few – and this is no different in the MEA region. However, MEA shares both similarities compared with the rest of the world and its own unique characteristics.

OVERVIEW

Globally, the financial services sector plays a large part in our economy. Its total assets in 2021 were around $468 trillion. As with the wider disparity across the vast MEA region, the financial services industry is also varied.

The GCC in the Middle East and countries like South Africa or Mauritius (located in the Indian Ocean) in Africa have a welldeveloped banking sector. However, in other parts of MEA, the banking sector is less well-developed. In addition, there are many parts of MEA dominated by public sector banks, with government intervention in credit allocation, losses and liquidity issues. The African banking sector has seen significant changes overall.

According to a report from the African Development Bank Group (AfDB), these reforms, to a large extent, were aimed at restructuring and privatising state-controlled banks, part of structural adjustment policies (SAP) by the World Bank and IMF. These reforms had also included auxiliary policies that helped ease entry and exit restrictions, interest and capital controls, and the overhaul of supervisory and regulatory frameworks within the banking sector.

Overall, the Middle East is oversaturated with banks. For instance, in 2019 there were around 120 private and public banks across the GCC (minus Qatar), serving more than 50 million people. In the

UAE, for example, there were around 47 lenders for a population of around 10 million people, whereas in Saudi Arabia there were 18 banks serving a population of 36 million.

FINANCIAL CENTRES

There are notable financial centres that have/are contributing significantly not only to their own economies but that of the region. Beirut, often known as the ‘Paris of the East’ up until the Lebanese Civil War in 1975, saw its capital and largest city of Lebanon as a major financial centre in the Middle East. Its success was attributed to its embracement of Western culture and sophisticated banking regulations and one of the few banking secrecy regimes that would not collapse to the political insecurities at the time like communism; its geographical location and lifestyle also helped attract investment.

After the challenges of the Civil War, other financial hubs in MEA came about such as Kuwait or Bahrain. In Bahrain, the financial sector now represents its most important sector of the economy, representing over 27 per cent of GDP. This sector is also the largest single employer in Bahrain, with Bahrainis representing more than 80 per cent of the workforce, according to the Bahrain Economic Development Board (Bahrain EDB), the Kingdom’s investment promotional agency. Mauritius is an example of financial services success in Africa. According to the Mauritius Economic Development Board, the financial services sector contributes 13 per cent to the total GDP in the country and employs over 8,600 people. The ICT/business process outsourcing (BPO) industry represents a key driver of the Mauritian economy with a GDP contribution of 7.4 per cent for last year and employing around 30,000 people with over 850 companies in the sector. Today, MEA has a large diverse number of strong financial centres. As well as those previously mentioned, there’s Casablanca in Morocco, Johannesburg and Cape Town in South Africa, Istanbul in Turkey, Kigali in Rwanda, Nairobi in Kenya, Doha in Qatar, Tel Aviv in Israel and the UAE capital of Abu Dhabi.

TOP 20 LARGEST BANKS IN THE MIDDLE EAST AND AFRICA (BY ASSET)

However, based on various metrics, the undisputed leader at present is Dubai, the commercial hub and largest city of the UAE. Last year, Dubai was among the world’s top 20 vibrant financial centres ranking at 17th place in the Global Financial Centres Index (GFCI) –the only Middle East, Africa and South Asian city to do so, joining the likes of London, New York City, Singapore, and Hong Kong.

The centrepiece of Dubai’s financial hub status can be seen with its Dubai International Financial Centre (DIFC), a special economic

zone. Dubai is also home to regional offices of two-thirds of Fortune 500 companies with a MEA operation. These include large international banks, such as HSBC and Standard Chartered, as well as payment giants Visa and Mastercard, plus technology companies such as Microsoft and Oracle. It is said that DIFC contributes at least 12 per cent to Dubai’s GDP.

Other contenders, notably Abu Dhabi, managed to rank well on the same GFCI index, securing the 31st place as the only other city in

OVERVIEW OF MIDDLE EAST AND AFRICA – FINANCIAL SERVICES

MEA to make it to the top 50. Among the top 100, other MEA cities included Cape Town (55th place) and Johannesburg (56th) in South Africa, Tel Aviv (57th), Istanbul (64th), Doha (65th), Bahrain (84th), Riyadh (86th), Mauritius (87th), and Kigali (99th).

LARGEST BANKS IN MEA CHART

The region is home to both native MEA-founded banks and also regional branches of non-MEA banks. Given that MEA represents a significant proportion of the world’s population, a strong representation of financial institutions like banks represents the diversity and opportunities MEA brings. Readers will know large multinational banks like HSBC or JPMorganChase or Bank of China – but what are examples of native-born MEA banks?

To be fair and not choose certain banks, as in the previous edition of this report, this report lists the top 20 largest banks in the entire region (MEA-born), which were ranked by total assets in US dollars via updated figures from 2022. These figures were compiled from the banks’ individual investor relations reports, using their annual data from this year. This gives the reader an understanding of what MEA banks are around and based on ranking according to their assets in USD.

Looking at the chart, it is similar to last year's 2022 figures, where Qatar National Bank took first place, with total assets of $298.8 billion. Close behind it was United Arab Emirates' First Abu Dhabi Bank, with total assets of $272.25 billion. In third place was Saudi Arabia’s National Commercial Bank (NBC) with total assets of $246 billion. Rounding out the top five were Israel’s Bank Leumi with $191.1 billion and UAE’s Emirates NBD with $189 billion.

The 20 largest banks in MEA are concentrated in a few specific countries – Israel, Turkey, South Africa, the GCC (mainly the UAE, Saudi Arabia, Qatar, and Kuwait), and Egypt. It is worth noting that others that did not make the top 20 list, such as Nigeria and Bahrain,

also have sizeable numbers of local banks that are strong regional players – name brands such as Zenith Bank from Nigeria and Bank ABC from Bahrain. Nevertheless, it shows that much of the region’s financial services industry is concentrated in specific countries, with the largest financial institutions in the region based on ranking.

IN FOCUS: INSURANCE INDUSTRY IN MEA

The MEA region represents a significant population, yet many are uninsured. According to Atlas, the insurance premiums market in MENA in 2018 stood at $57 billion.

In the rich GCC region, according to research from management consulting firm Kearney, it is one of the world’s fastest-growing markets, with registered growth of nearly seven per cent each year in gross written premiums over the previous few years.

The GCC countries collectively accounted for less than half (44.3 percent) of the region’s premium market share. Much of the Middle East is still uninsured, with less affluent regions specifically beyond the GCC region. Even historically, in the affluent GCC, many different aspects of taking insurance (such as life insurance) were not a common practice. However, that appears to be changing. For instance, in Dubai since 2014, health or medical insurance has been mandatory by law.

Today, in the GCC, the two largest markets are the UAE and Saudi Arabia. It is predicted from the latest S&P Global Ratings GCC Insurers 2023 Report that the latter is now the largest market as of last year, thanks to the strong increase in gross written premiums (GWP).

As written in the first version of this report, according to a report by Zurich, “its potential remains largely untapped. This is particularly true for MENA countries where insurance penetration – i.e., the ratio between insurance premiums written and GDP – is the lowest in the world.

Source: The Fintech Times, Mastercard, IFC, World Bank, World Economic Forum, IMF Image: Richie Santosdiaz and The Fintech Times

Insurance penetration varies considerably between MENA countries, ranging from very low ratios in Algeria, Egypt, Yemen, and several GCC countries, to ratios above 1.5 per cent in Jordan, Lebanon, and Morocco. Whereas the non-life sector in the MENA region is roughly comparable to those of other emerging economies, the region’s life sector is conspicuously underdeveloped relative to other regions.”

Meanwhile, in the African continent, the rate of uninsured is even higher. Nigeria, with a population of more than 200 million people and the largest country in the continent by population, has an insurance penetration rate of only 0.4 per cent. A different trajectory

of $68billion in terms of gross written premiums, which would make it the eighth largest in the world. Even when mentioning digital transformation and the rise of insurance technologies, or insurtech, there remains much opportunity for insurance to further grow.

As with everywhere else in the world, the financial services industry is not much different in the region in terms of what it offers. After all, it is still providing financial services to people and corporations. The ecosystem is made up of banks, as well as other international banks that have a presence in the region, investment houses, lenders, finance companies, real estate brokers and insurance companies.

WHAT IS UNIQUE IN MEA’S FINANCIAL SERVICES OFFERING?

MEA has its own unique approaches compared to the rest of the world. These include, for instance:

1 Governments’ involvement in the private sector and ownership of much of the financial institutions

Considering state ownership of banks might conjure up memories of the 2008 Global Financial Crisis for those who are reading this report from the West, with American and British governments forced to bail out banks by buying their bad debts in exchange for stakes in said bank.

is observed in South Africa, where the nation has one of the world’s highest penetration rates of insurance, accounting for an estimated 80 per cent of the continent’s total gross premiums. It is estimated that Africa as a whole only has three per cent of its population insured – which is the lowest in the world.

MEA has a combination of large global insurance brands offering various products and services across the region, such as MetLife, Zurich, AXA, Cigna, Munich RE, Aetna, and Bupa – to name a few.

MEA also has a wide range of its own native-born and headquartered insurance firms, such as Turkey’s ERGO Sigorta A.S and Anadolu Hayat Emeklilik, Saudi Arabia’s Walaa, Salama, Malath and Al-Rajhi Bank, Takaful, Israel’s Harel Insurance Investments & Finance Services, Migdal Holdings, Clal Insurance Enterprises Holdings Ltd, and Menora Mivtachim, the UAE’s Daman Health, Oman Insurance Company, and Takaful Emarat, Egypt’s Misr Insurance, South Africa’s Old Mutual, Liberty Holdings, Momentum Metropolitan Holdings, and Discovery Health, Qatar’s Qatar Insurance Company, and Morocco’s RMA and Wafa Assurance.

The table opposite provides the reader with an example of MEA-native insurance companies based on the top 15 largest assets. Interestingly, when looking at the top 15, the entries are led by South Africa and Israel, as well as Turkey, with Morocco, Qatar and Saudi Arabia also represented. Like the banks, the largest ones in the MEA region focus on these areas. Spotlighting back to Africa, McKinsey estimates that the continent has a potential insurance market value

Nevertheless, in MEA, state ownership of banks is common and isn't associated with a financial crisis. For instance, in Angola, there are 195 state-owned companies, some of which are financial services institutions. This is also prevalent in more affluent areas in the Middle East, notably in the GCC, where, at one point, it was estimated by The Financial Times that GCC governments – including their sovereign wealth funds, state pensions and social funds – had interests in 80 percent of the 50 biggest lenders by assets. These include the likes of First Abu Dhabi Bank (FAB), Emirates NBD, Saudi Arabia's NCB, and Qatar National Bank (QNB).

2 Lending is generally more conservative

It is difficult to summarise all the banks in MEA, but they appear to be generally conservative in terms of their lending. This was evident during the 2008 Global Financial Crisis, when the financial services sector across MEA fared much better than the West. Of course, there was a global recession that impacted the world, including MEA, but this speaks purely on the financial sector. MENA banks, particularly the GCC ones, hold high levels of capital, generally comfortably above the minimum capital requirements and standards set under the Basel III agreements. Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007 to 2009.

3 Growth of Islamic finance

Being the birthplace of Islam and home to much of the world's two billion Muslims, Islamic finance plays a growing role in the wider financial services ecosystem. While Islamic finance existed in the seventh century, its formalisation began gradually in the 1960s. Islamic finance refers to how businesses and individuals raise capital in accordance with Sharia, or Islamic law. This also includes the types of investments that are permissible under this form of law. Islamic finance can be seen as a unique form of socially responsible investment.

TOP 15 LARGEST INSURANCE COMPANIES IN THE MIDDLE EAST AND AFRICA (BY ASSETS)

Description

1= ERGO Sigorta A.Ş Turkey $402.6billion Founded in Turkey in 1989, ERGO Sigorta AS was acquired by ERGO, a Munich Re company in 2006. provides health, property and casualty insurance

1= Insurance Association Turkey $402.6billion The Insurance Association of Turkey is a specialist of Turkey institution that oversees insurance providers in Turkey. It has over 66 member companies in various fields

3 Migdal Holdings Israel $63.4billion Incorporated in Israel in 1974, with the insurance arm originally established in 1934, Migdal Holdings provides a wide range of products related to insurance, pensions and financial asset management. The group has over two million private and business customers across its activities

4 Old Mutual South Africa $62.9billion Established in Cape Town in 1845, Old Mutual was South Africa's first mutual life assurance society. Employing 30,000 people in 14 countries, it provides financial solutions to individuals, SMEs and corporations

5 Harel Insurance Investments Israel $40.4billion Harel Insurance Investments & Finance Services has been & Finance Services active for over 80 years in the insurance industry and is one of the largest financial service groups in Israel. It offers a range of services including health insurance, life assurance as well as other non-life branches

6 Momentum Metropolitan South Africa $33billion Listed on the Johannesburg Stock Exchange, this financial Life Assurers services company offers long and short term insurance as well as asset management and investments

7 Liberty Holdings South Africa $25.7billion Liberty Holdings was founded in 1957 and operates in 18 African countries, providing services to 3.2 million people. As well as insurance it also offers asset management, investment and health products

$18.6billion Menora Mivtachim is one of the largest general insurers in Israel and a market leader in the motor insurance sector. It operates in all the main insurance sectors, with their group also providing pension and other financial services

Discovery Healt h is a shared value insurance company covering over 5.1 million clients. It mainly serves small to large sized employers, as well as individual clients, also operating in UK, US and Chinese markets

Qatar Insurance Company is a publicly listed composite insurer founded in 1964, and the first domestic insurance company in the state of Qatar

11 Clal Insurance Enterprises Israel $5.9billion Clal Insurance is in the business of insurance Holdings Ltd and long terms savings, including general insurance, health, life and pensions

12 RMA Morocco $4.6billion Established in 1949, RMA was the first Moroccan company to operate in the insurance market at a time of foreign domination. It merged in 2005 with Al Wataniya

13 Wafa Assurance Morocco $4.4billion Wafa Assurance is the insurance branch of the Moroccan bank Attijariwafa Bank. Founded in 1972 with headquarters in Casablanca, Wafa Assurance offers a wide range of services including car, home and health 14 Tawuniya Saudi Arabia $3.9billion

Tawuniya, also known as The Company for Cooperative Insurance, is a Saudi joint stock company that was incorporated in 1986. The company practices various industries on insurance all in accordance with Islamic Sharia

15 Anadolu Hayat Emeklilik Turkey $2.9billion

Beginning operations in 1990, Anadolu Hayat Emeklilik was the first public pension and life insurance company. With a wide network of branches and a large range of services, the company is one of the biggest leaders in the industry

Islamic finance is one of the fastest-growing financial industries, even though it still represents a small share of global finance. Its total assets have exceeded $2trillion and were estimated to reach $3.8trillion by 2022. According to the Union of Arab Banks, 10 countries account for 95 per cent of the world's Sharia-compliant assets, with Iran representing 30 per cent of the global total, followed by Saudi Arabia at 24 per cent, Malaysia at 11 per cent, the UAE at 10 per cent, Qatar at six per cent, Kuwait at five per cent, Bahrain at four per cent, Bangladesh at 1.8 per cent, Indonesia at 1.6 per cent, and Pakistan at one per cent.

Regarding insurance, the lack of Sharia-compliant offerings could be a reason for the low penetration in the market. However, Takaful, which is Sharia-compliant, could help boost the uninsured rate in the Arab world.

4 Less developed infrastructure to cater to financial services ecosystem

Compared to the West, much of the Middle East and Africa (MEA) lacks advanced infrastructure for financial services. These infrastructures are crucial for lenders, as they require data and information to offer potential services to end-users. For example, credit bureaus are important but not widely available in MEA.

As recently as 2007, only four African countries (Botswana, Namibia, South Africa, and Swaziland) had effective credit bureaus, according to the IFC-World Bank Doing Business 2007 Report. Since then, much has changed.

digital experiences, which much of this report will highlight, infrastructure improvements are still needed.

5 Financial exclusion is a challenge for individuals

Much of the MEA region remains underserviced or excluded completely from the financial sector. However, in more advanced financial ecosystems such as South Africa, Mauritius, and Kenya, there have been improvements in banking penetration and overall financial infrastructure. In those three countries, banking penetration rates are 69 per cent, 90 per cent, and 82 per cent respectively. Compared to much of the rest of Africa, South Africa and Mauritius have 10 bank branches per 100,000 adults – far higher than the Sub-Saharan African average of only five.

However, despite these improvements, most Africans – 57 per cent – do not have any kind of bank account, including mobile money accounts. It is also estimated that 360 million adults do not have access to any form of a bank account at all. Additionally, Sub-Saharan Africa has low credit and debit card penetration rates - at three per cent and 18 per cent respectively. One of the challenges in Africa is that much of the continent is still not urbanised, and financial services institutions often cater mainly to urban areas, thereby excluding a significant proportion of the rural population. This is further compounded by poverty levels, which exacerbate the problem of financial exclusion.

The situation is even worse in the Arab world, with a World Bank study showing that almost 92 per cent of the population is in immediate need of adequate financial inclusion, including greater access and resilience. In the Arab world, 69 of the population remains unbanked.

6 Financial exclusion is a challenge for small and medium enterprises

In recent years, the MENA region's private credit bureau coverage (by percentage of adults) has been estimated to be only over 20 per cent.. It's important to note the disproportion of this, with Israel scoring 100 per cent and most of the GCC scoring at least over 50 per cent, such as Saudi Arabia and the UAE. Interestingly, Iran was more than 60 per cent.

Another example is the relative lack of data centres across the region. Much of the data, such as in Africa, is stored abroad. However, the region has witnessed a growth in building its own data centres.

This also includes a gap in what many might see as basic financial services infrastructure, such as ATMs. In Africa, particularly in rural areas, ATMs are not readily available, further exacerbating the gap of financial exclusion. Additionally, IDs are still lacking. According to the World Bank, over half of the estimated one billion people globally without a registered ID live in Sub-Saharan Africa, making digital transformation and fintech developments difficult to advance. Consequently, even considering know your customer (KYC) is difficult when simply knowing someone is challenging. Not even factoring in

Small and medium-sized enterprises (SMEs) are essential to economies worldwide, accounting for over 90 per cent of businesses globally and serving as a significant source of job creation, as per the International Monetary Fund. In the MEA region, SMEs are equally vital across high-income, middle-income, and low-income nations, playing a strong role in their respective economies. Here are some examples of their significance in specific MEA countries:

■ Saudi Arabia – SMEs constitute up to 99 per cent of all private businesses, account for 64 per cent of employment, and contribute around 20 per cent of the country's GDP

■ Egypt – SMEs make up more than 95 per cent of all non-agricultural private companies and employ about three-fourths of recent workers

■ South Africa – SMEs account for 91 per cent of businesses, 60 per cent of employment, and contribute over half (52 per cent) of total GDP

■ Kuwait – SMEs make up 90 per cent of private labour, including labour and imports, an additional 45 per cent of labour, jobs, and domestic rates of less than one per cent, producing about 90 per cent of employment in Lebanon, and more than 95 per cent of total firms

Small and medium-sized enterprises (SMEs) are essential to economies worldwide, accounting for over 90 per cent of businesses globally and serving as a significant source of job creation

■ UAE – SMEs comprise around 94.3 per cent for the country's commercial ventures, employ nearly 62 per cent of the population and produce about 75 per cent of the state’s GDP.

■ Middle East and Central Asia – SMEs are the majority (96 per cent) of all registered companies in the region

For the MEA region, access to finance for small and medium-sized enterprises (SMEs) and micro businesses remains a challenge. Nevertheless, the region has the lowest SME access to finance via the banking system. The average share of SMEs in total bank lending in Middle East, North Africa and Pakistan (MENAP) is around seven per cent (it is even lower in parts of the GCC at two per cent). This is also reflected in a survey from the World Bank Enterprise Survey where 32 per cent of firms in the MENAP region cite access to credit as a major constraint (higher than the global average of 26 per cent). It is estimated that SMEs in the Middle East have the highest rate of lack of financial access in the world.

Africa does not fare any better. According to the World Bank, SMEs in sub-Saharan Africa have a finance gap of $330billion. SMEs across the continent struggle to secure loans due to various factors, including their inability to provide the necessary information about their businesses to lenders (as highlighted earlier with the infrastructure bullet point). In Africa, 75 per cent of enterprises are financed by internal funds, and another 10 per cent use traditional banking loans. For instance, 79 per cent of informal businesses have never obtained a loan, and only 21 per cent have utilised a bank loan

in South Africa. Moreover, only under 20 per cent of formal businesses have used a bank loan to start their business.

Examples abound, but take a few instances: In Tanzania, only 30 per cent of micro, small and medium enterprises (MSMEs) had access to financial services. A large number of enterprises in sub-Saharan Africa operate occasionally, for a limited period of the year. In Uganda as well, lack of profitability and lack of finance were the most important reasons for enterprise exit. The country in East Africa saw lack of finance and a harsh business environment tend to constrain the growth of MSMEs in the country. Others saw access to finance still being a major hurdle in Lesotho.

When considering the challenges facing micro-enterprises in South Africa, access to both debt and equity markets proved to be a major issue. Additionally, a lack of business infrastructure, equipment, and limited awareness of government programs are hindering the ability of MSMEs to scale and grow in the country.

A study conducted on 367 agri-food MSMEs from 17 low and middle-income countries in Sub-Saharan Africa during the worst of the Covid-19 pandemic revealed that nearly 95 per cent of firms' operations had been impacted by the pandemic. This was primarily due to decreased sales, as well as lower access to inputs and financing amid limited financial reserves.

It is noteworthy that even basic essentials are not readily available to many MSMEs. The same survey indicated that only 16 per cent and 28 per cent of MSMEs had access to electricity from the national grid and water from public or municipal sources, respectively.

d.Tech and startup overview

OVERVIEW

The role of technology in the global economy and our daily lives is significant and continues to grow. For example, in the first quarter of last year, global VC funding reached $160billion, a seven per cent increase compared to the same period the previous year (although later in 2022, global trends slowed down due to ongoing challenges such as inflation, post-Covid recovery, and the ongoing war in Ukraine). The global tech industry is estimated to be worth at least $5.2trillion, with the majority of this value divided between North America (35 per cent), Asia (32 per cent), and Europe (22 per cent), leaving only 10 per cent for the rest of the world, including MEA, which is a small percentage for a region that is home to a quarter of the world's population. Despite this, technology is increasingly playing a stronger role in the region and has significant potential to grow further.

Various metrics highlight the relative infancy of the technology sector in MEA, such as the low number of unicorns in the region. Excluding Israel, there are only six unicorns in the Middle East region (with four of those being in the UAE), while Africa has eight (six of which are in fintech, with most coming from Nigeria and Egypt, and fintech MTN joining the ranks this year).

Although figures such as these may suggest that MEA has limited potential, the day-to-day changes and opportunities for fintech present a clearer picture. Similar to the financial services industry, the region's wider tech ecosystem displays varying levels of development and disparity.

TECH HUB

Where are the known tech hubs? As with other regions, MEA sees much of its tech activity and innovation concentrated in certain

areas. In the Middle East, the UAE boasts the highest levels of activity across various metrics, from the number of tech companies (as highlighted in Chapter Three of this report) to VC deals (as discussed later in this section).

Dubai, in particular, has positioned itself as a regional and global hub for tech, attracting large multinational corporations such as Google to establish their regional offices there. Additionally, it has produced some of the first unicorns in the region, including Careem, the car-hailing app that was acquired by Uber, and Souq.com, the online e-commerce portal that was acquired by Amazon.

That being said, other countries in the Middle East are playing catch-up and building their own robust tech ecosystems. Saudi Arabia, for example, launched a major regional tech trade show and conference called LEAP last year, and has been investing heavily in various aspects of tech, including artificial intelligence (AI), for which it earmarked $20 billion for further advancement.

In the African continent, much of the activity and innovation is concentrated in certain parts, with the Big Four – Egypt, Nigeria, Kenya, and South Africa – being the key players. As will be discussed later in this report, these countries are also dominant in the fintech space. Various metrics show that they overwhelmingly dominate the wider tech and startup scene. For example, a study conducted by Briterbridges in collaboration with the Global System for Mobile Communications (GSMA) Ecosystem Accelerator Programme mapped out 618 tech hubs in the continent, and the top four countries had the most hubs: Nigeria with 85, South Africa with 80, Egypt with 56, and Kenya with 48. Other notable countries include Morocco with 31, Tunisia with 29, and Ghana with 25.

Turning to Turkey, the amount invested in Turkish startups annually between 2010 and 2020 was around $50million to $100million. However, in 2021, that number skyrocketed to over $1.5billion, which is more than the total investment of the previous decade combined. While Turkey had failed to produce any unicorns until 2020, the country has now seen the emergence of six unicorns, including Dream Games, a gametech company.

Israel is widely considered as the most advanced tech hub in MEA, and one of the leaders in the world, earning its nickname as the Startup Nation. The country has the highest number of startups per capita in the world, and has produced some of the most prominent tech unicorns valued at $1billion or more, including eToro, Rapyd, TripActions, Moon Active, Compass, Next Insurance, and Melio. At least 77 Israeli-founded startups have achieved this status, many of which are fintechs. Much of the activity is centred around Tel Aviv, the largest city and commercial hub in the country.

Israel's highly innovative tech ecosystem is strongly supported by the government, and has a tight-knit network of entrepreneurs. The country ranks second in the world in research and development (R&D) expenditure per capita, which amounts to around 4.1 per cent of its GDP. Israel also has the highest percentage of engineers and scientists per capita in the world, and boasts one of the highest ratios of university degrees and academic publications per capita.

In contrast to Israel's thriving tech ecosystem, other parts of the region still have a relatively underdeveloped tech industry.

VC FUNDING

In the first half of 2022, African startups raised $3billion, which was double the amount raised over a similar period the previous year,

defying the global venture funding decline. However, like the rest of the world, Africa's venture funding slowed down, and the year ended between $4.8-5.4billion.

Israel had a record year in 2021, raising over $25billion, and 2022 showed promise with the first three months alone seeing Israeli companies raising close to $5.6billion. These were raised over 212 deals, including 14 megadeals of over $100million each. The $5.58billion in Q1 2022 was on par with fundraising in Q1 2021, which amounted to $5.4billion. However, like the rest of the world, Israel's funding slowed down in 2022, and it ended the year with 40 per cent less funding than in 2021..

In Turkey, startups attracted a record of nearly $1.6billion in investments last year. Some $1.5 billion were invested across some 300 deals in seed, early, and later venture capital stages last year. The figure amounts to a record, even when fast grocery delivery pioneer Getir's $768million funding round is excluded, which would then mark a 26 per cent increase to $825million. Gaming and fintech saw the biggest benefits in Turkey with funding, with the former helping Turkey rank fourth in the world behind the US, Singapore, and the UK.

In the rest of the Middle East and North Africa region, despite the challenges globally, startups raised a record-breaking $3.94billion in funding in 2022. The top three countries with the largest recipients of that were the UAE with almost half of it alone at $1.85billion (252 deals), Saudi Arabia in second place with $907 million (154 deals), and Egypt in third place with $736 million (180 deals).

Interestingly, the rise of sovereign wealth funds has been noticed more in the MENA region in recent memory. This is partly due to the importance of tech and startups in general as a driver for future economic development and diversification happening in the region. It is in the interest of these funds to help implement and drive entrepreneurship in the present and future.

TOP TEN LARGEST SOVEREIGN WEALTH FUNDS IN THE GCC (BY VALUE - NOV 2022)

Sovereign wealth funds in the MENA region have become increasingly active in the tech startup scene, both within and outside the GCC. This trend has extended to Europe, the US, and Asia, attracting interest from companies looking to raise capital. The Financial Times published an article this year titled The New Gulf Sovereign Wealth Fund Boom, highlighting the significant growth in investment. Sovereign wealth funds have expressed interest in specific verticals such as fintech, with Qatar’s sovereign wealth fund among those seeking opportunities globally.

e.The MEA consumer T

he MEA region boasts a diversity of ethnicities and cultures due to its numerous countries. The diversity transcends country borders, with Nigeria alone estimated to have over 500 spoken languages and more than 250 ethnic groups. The region is also the birthplace of the three largest monotheistic religions, namely Judaism, Christianity, and Islam. Islam, in particular, has given rise to Islamic finance, which will be discussed later in this report.

The impact of colonisation, as a protectorate or trading route, has also shaped the region's legal structure, linguistic lingua francas, international trade, and investment, consequently impacting its overall economic development. The region has been influenced by various colonising powers, including the British, French, Portuguese, Belgians, Ottomans, Dutch, and Spanish, which continue to shape it today. Moreover, the report highlights key bullet points that further illustrate the overall MEA consumer's story. They include:

1 Many in MEA work in the informal economy

The informal economy plays a significant role not only in developing and emerging economies but also in advanced economies, with around 60 per cent of the world's population participating in it, according to the International Labour Organisation (ILO). In Africa, the informal economy is particularly prevalent, with 85.8 per cent of employment and 95 per cent of youth employment being informal.

MEA has some of the world's highest levels of informality. From 2004 to 2010, informal employment as a percentage of non-agricultural employment was highest in South Asia at

OVERVIEW OF MIDDLE EAST AND AFRICA – MOBILE & INTERNET USAGE

82 per cent, followed by Sub-Saharan Africa at 66 per cent, East and Southeast Asia at 65 per cent, Latin America at over 50 per cent, and the MENA region at 45 per cent.

In the Middle East and North Africa, middle-income Arab nations such as Lebanon, Egypt, Jordan, Morocco, Tunisia, and Libya have significant populations of workers classified as informal. In Lebanon and Jordan, for example, 55 per cent of workers fall under this category. In Egypt, the informal economy is estimated to contribute 40 per cent of the country's GDP, while in 2014, almost 2.4 million people worked in the gig economy in Morocco. During the height of the pandemic, much of MEA, like the rest of the world, experienced the impact of various lockdowns on its informal economy. Many informal workers were forced to adapt to digital and online platforms, resulting in significant changes to their traditional way of working.

2The population is young and growing fast in comparison to the rest of the world Generally, as younger populations are more adaptable and flexible to changes, MEA is in a unique position due to its young population. In MENA, children and young people (aged 0 to 24) currently account for nearly half of the region’s population. The population is projected to continue growing rapidly, and by 2050, half of the countries in MENA are expected to experience population increases of at least 50 per cent from their 2015 levels, with 271 million children and young people. Except for Lebanon, every country in MENA is expected to grow to varying degrees population-wise.

OVERALL MOBILE AND INTERNET USAGE

The

Source: Various including The Fintech Times, GSMA, Mastercard, MENA Fintech Association. Kaspersky, Economist, McKinsey Image: Richie Santosdiaz and The Fintech Times

When looking at Africa, it is not only young but also growing rapidly. For instance, 70 per cent of Sub-Saharan Africa's population is under 30 years old. The African continent is the world's secondlargest population after Asia, and it is also the fastest-growing population globally. From its estimated +1.3 billion people, it is projected to reach 4.3 billion by 2100. With a median age of 19.7 in 2020, Africa is the youngest population globally, with 60 per cent of its population younger than 25 years old, and over a third are between the ages of 15-34. By 2100, Africa is still expected to have the world's youngest population, with a median age of 35 years.

MOBILE USAGE FACTS

Sub-Sahara Africa

50% population unique mobile subscription by 2025

54% population smartphone adoption by 2025

48% population smartphone adoption in 2020

1/3% mobile internet subscribers (2023)

40% have access to the internet

As highlighted in the first and second editions of this report, youth unemployment overall in the MENA region is very high, coupled with Africa's youth working in the informal sector due to necessity, which presents a lack of opportunities for many, and a significant proportion immigrate to better pastures. While the global average (pre-Covid) is around 12.6 per cent, in MENA, it is over 25 per cent. This results in many leaving for the wealthy Gulf region. The trend continues in the 'post-Covid' recovery, whereby wealthy regions like the Gulf appear to be further attracting talent across MEA and beyond.

Middle East and North Africa (MENA)

68% population unique mobile subscription by 2025

84% population smartphone adoption by 2025

54% mobile internet users by 2025

77% population smartphone adoption in 2021

76% of population use the internet

3MEA send and receive workers and plays a large role in the topic of migrants and remittances

The wealthy regions, notably the GCC, have attracted people from around the world, both from other MEA countries and non-MEA countries, to help develop their countries over the past century. The uniqueness of having the world's richest and poorest countries in the same region means that the movement of people seeking and providing economic opportunities is robust in the MEA region. As a result, the remittance corridors for both sending and receiving money are among the busiest in the world, and there is at least one MEA country in each of the top five.

In 2021, data showed that the top five source countries for remittance outflows were the United States with over $69billion, the UAE in second place with $43billion, Saudi Arabia in third place with over $34billion, Switzerland in fourth place with over $29billion, and China in fifth place with over $18billion. Recent data suggests that the rankings remain similar. In 2022, Egypt (fifth globally) received the highest amount of remittances with $32billion, followed by India in first place with $100billion, Mexico in second place with $60billion, China in third place with $51billion, and the Philippines in fourth place with $38billion.

In terms of remittances as a share of GDP, Lebanon had the highest percentage in MEA (and second globally overall, behind Pacific Island nation Tonga at 50 per cent) at 38 per cent. Samoa was third globally at 34 per cent, Tajikistan was fourth at 32 per cent, and Kyrgyz Republic was fifth at 31 per cent. Many people immigrate for economic reasons as they seek better opportunities abroad and send money back home. According to the World Bank, Africa is likely to be the most severely affected by concurrent crises, including severe drought and spikes in global energy and food commodity prices, which were felt throughout 2022. Meanwhile, MENA is estimated to have seen an uptick of 2.5 per cent in remittance flows, while Sub-Saharan Africa is estimated to have increased by 5.2 per cent.

In terms of remittances as a share of GDP, Lebanon (38 per cent, the highest in MEA) and West Bank and Gaza (19 per cent) are significant in the Middle East, while Gambia (28 per cent), Lesotho (21 per cent), and Comoros (20 per cent) are notable in Africa. Remittances are not solely the domain of blue-collar workers, as middle and upper-class citizens who live abroad often send money back to their home countries and loved ones.

Despite being a developed economy, a country does not necessarily have its own fair share of emigrants due to various reasons. This was highlighted in the first edition of this report with Israel. The report, Leaving the Promised Land – A Look at Israel's Emigration Challenge, released by the Shoresh Institution for Socioeconomic Research, revealed that for every Israeli with an academic degree who returned to the country in 2017, 4.5 Israeli academics emigrated. The Startup Nation has often seen much of that talent and innovation go to the US, specifically.

4 Low internet usage and relatively high mobile usage (but more opportunities and gaps to fill)

Regarding the internet, MENA surpassed 300 million subscribers last year, and by the end of this year, over half of the population will have access to the internet. 4G is the leading mobile technology in the

region, with almost 270 million connections at the end of last year, more than double the number from five years ago, thanks to investments by telecommunication companies in upgrading infrastructure and expanding networks. However, 5G currently represents only one per cent of the market but is expected to reach 17 per cent by 2025, according to the GSMA.

This development is generally skewed towards the more developed economies of MENA, such as the UAE and other GCC nations, which capture a larger share of the market than their less affluent MENA peers. In Africa, approximately 800 million Africans lack internet access, the lowest in the world. Sub-Saharan Africa's internet penetration is estimated at 28 per cent, which is low but growing. Generally, the more developed economies in Africa have higher internet penetration rates, with Egypt (71.9 per cent), Seychelles (79 per cent), and Morocco (84.1 per cent) leading the way. In contrast, the Central African Republic has the lowest penetration rate at 7.1 per cent, followed by Eritrea at eight per cent.

In 2019, the SIM card penetration rate in MENA exceeded 105 per cent, and by 2025, the region is expected to have a smartphone adoption rate of over 80 per cent. The GCC region is the most advanced in terms of mobile and smartphone usage and infrastructure, with a smartphone penetration rate of 99 per cent in the UAE, where smartphone users spend an average of 6.5 hours daily using them. Sub-Saharan Africa had nearly 500 million mobile subscribers in 2020, a 20 per cent increase from the previous year, representing 46 per cent of the region's population. 4G adoption in the region is expected to double to 28 per cent by 2025, while 5G, which is still in its infancy there, will account for only three per cent of total mobile connections.

broadband coverage

However, the expansion of mobile coverage is still outpacing mobile internet, with one in five people living in areas without mobile broadband coverage. Additionally, 53 per cent of people who have access to mobile broadband coverage are not using mobile internet. Kenya has a high rate of mobile penetration among adults, with 98 per cent using mobile phones. The popularity of mobile money, such as M-Pesa, is highlighted as a solution for financial inclusion in the region.

Furthermore, at least one in nine transactions at the point of sale (POS) are now contactless, with Mastercard reporting a 66 per cent increase in contactless payments to $136million across the MEA region last year. Before the pandemic, in 2019, Mastercard saw a 200 per cent increase in contactless payments in MEA. Globally, contactless payments are expected to grow to $18billion by 2025, nearly double the amount in 2020.

In 2020, Checkout.com conducted a survey of over 5,000 consumers in the UAE, Saudi Arabia, Egypt, Jordan, Qatar, Kuwait, Bahrain, and Pakistan, revealing that 47 per cent of consumers expect to shop online more frequently in the next year. Only 15 per cent anticipate a decline in their online shopping frequency, while the remaining 38 per cent expect it to remain about the same.

The expansion of mobile coverage is still outpacing mobile internet, with one in five people living in areas without mobile

f.Economic diversification and digitalisation economic development

The following provides an overview of the financial services landscape in the MEA region. Financial services encompass a wide range of offerings, including payments and insurance – to name a few – and this is no different in the MEA region. However, MEA shares both similarities compared with the rest of the world and its own unique characteristics.

OVERVIEW

With an economy, culture, and socio-economic status as diverse as that of the MEA, they all have one thing in common – economic development priorities. This is not a phenomenon exclusive to the MEA but rather a public sector priority that all countries across the world focus on for the betterment of their citizens. At the end of the day, any jurisdiction cares that their country has economic growth and job creation. Although not exclusive to the MEA, the region as a whole – from the rich lands of the GCC to the not-so-wealthy ones – has some of the most visible changes and clearest economic development and diversification happening in one's lifetime. This presents an exciting time for those in the space, such as this author. However, for the majority who probably do not even know what economic development and diversification are, it will appear in many ways when one either visits the MEA or for those reading this that are living there. It is the reason why this report exists and the growth of fintech as we know it today – both direct and indirect.

It is good to understand what economic development strategies are in the first place. They are essentially a national outlook of a nation (or could be even cities – within one's borders) that aims to improve existing sectors it might have but also foster new ones. The overall aim of them is to boost economic growth, job creation and aim to improve the lives of those in one's jurisdiction.

Why is it important in MEA? Many countries in the MEA region have developed their own economic development and diversification strategies and are implementing them. As mentioned earlier, many of these economies are heavily reliant on commodities and natural resources, such as oil in the GCC and parts of Africa like Nigeria. With the volatility of oil prices and the finite nature of natural resources, countries in MEA need clear visions and roadmaps that can strategically guide them towards diversifying their economies.

All six GCC countries have their own economic development strategies, such as Bahrain Economic Vision 2030, Kuwait Vision 2035, Qatar National Vision 2030, Oman Vision 2040, and Saudi Vision 2030. The UAE, for instance, has other national initiatives such as UAE Centennial 2071 and UAE Vision 2021, as well as regional initiatives like Abu Dhabi Vision 2030. These strategies aim to diversify the sectors of the GCC countries and focus on newer sectors such as technology, financial services, and tourism to drive growth and maintain their standard of living.

Moreover, many low-income, low-middle, middle-income, and high-middle income countries in MEA are using economic

development strategies to raise the standard of living in their respective jurisdictions. They are building on their strengths and expanding into new sectors such as technology and financial services to fuel economic growth. Examples of these strategies include Egypt Vision 2030, Mauritius Vision, Rwanda Vision 2050, Jordan 2025, Uganda Vision 2040, Kenya Vision 2030, and Ghana Vision 2020. By diversifying their economies, these countries hope to uplift their nation's income and standard of living in the long term.

Furthermore, countries are utilising these initiatives to promote entrepreneurship and cultivate home-grown startups. This trend is evident across the MEA region, particularly in the GCC, where historically, a significant portion of the local population has been employed in public-sector jobs. Starting a new business and working in startups or the private sector is still a relatively new concept. Governments in the region are implementing measures to encourage entrepreneurship, such as launching incentives to hire locals in the private sector, promoting priority sectors like fintech (as seen in Saudi Arabia with the launch of Fintech Saudi in 2018 by the Saudi Central Bank (SAMA)), and supporting accelerator and incubation programmes and VCs to create a business entrepreneurship ecosystem that attracts investors.

In addition, priority is given to education and sector training, while incentives are provided to those looking to start businesses. An example of such initiatives is the recent announcement in the UAE, where locals can take a year off from their government jobs to start their own businesses, which is a unique initiative.

Moreover, there are digital-specific and sub-digital sectorspecific initiatives, including fintech-specific ones. These strategies are often off-shoots that complement the wider national or city-wide strategies. For example, several MEA countries have digital strategies like Digital Israel, Tunisia Digital 2020, and Smart Dubai 2021, which focus on digital transformation as a foundation for economic prosperity and enhancing people's lives.

Regarding sub-digital initiatives, some are dedicated to artificial intelligence (AI), blockchain, big data, among others. Examples of such initiatives include the National Strategy for Data & AI (NSDAI) in Saudi Arabia and the Dubai Blockchain Strategy. Recently, Saudi Arabia also launched a fintech strategy. While each initiative is tailored to the specific needs of their respective nations, they all have an overarching economic strategy with the following objectives:

■ Diversification of economic sectors – Economies that are reliant on only one sector are risky, and so these initiatives aim to create diverse economies with multiple sectors, including tourism, transportation, tech, and fintech.

■ Drive innovation and entrepreneurship – These initiatives promote innovation in the future economy and encourage the development of local talent and ideas, as well as promote entrepreneurship to drive these ideas forward.

■ Digital transformation – Digital technology drives sectors such as tech and fintech, but it is also important for the wider adoption of technology to prepare for a future digital world.

The Covid-19 pandemic has further emphasised the importance of strong technology infrastructure globally.

■ Job creation and economic growth – Job creation and economic growth are the pillars of economic development. Therefore, these initiatives aim to create an overall economic development strategy for the betterment of its citizens.

In relation to fintech, a combination of market demand and government support has led many countries to build fintech and wider digital ecosystems. Regulatory sandboxes have also emerged throughout the region. In the MENA region, Abu Dhabi Global Market’s RegLab was the first to launch in 2016, followed by the Dubai Financial Services Authority and the Central Bank of Bahrain in 2017, with the latter being MENA’s first onshore sandbox. Legislation changes have also been prioritised in fintech, both incoming and current, to ensure that consumers are protected and the MEA region has a positive business-friendly environment. Furthermore, as talent and human capital are crucial, the region has seen the development of an ecosystem due to the economic development strategies and market demand. Although the region is still in its infancy compared to Silicon Valley in the US, the changes happening in the MEA region are impressive. This has led to the rise of accelerators/incubators, VC companies, university graduates, in particular, a push for those with coding and other highly skilled needs.

DIGITAL ECONOMIC DEVELOPMENT

Digital transformation has been influenced in general in the MEA region to varying degrees. As highlighted earlier, much of the push has been coming from government-led and legislative-led initiatives, which aim to

OVERVIEW OF MIDDLE EAST AND AFRICA – THE RISE OF DIGITAL

promote a wider digital transformation that sees digital economic development at the forefront. This includes having regulations and a landscape that fosters innovation to boost digitalisation.

Besides national strategies, there have been efforts across the wider tech landscape to boost aspects of it, further increasing digitalisation. Strategies and initiatives to boost the likes of AI and even the metaverse have been pushed from a government and legislative point of view, as highlighted later in the report.

On the other hand, changes have also been driven by the market. The overview of MEA presented in Chapter One shows that the young population is relatively underserved in financial services for various economic reasons. Fintech is filling the gaps created by market demand and catering to a vast range of people who do not have access to traditional financial offerings. It is worth noting that key strategies and economic integrations in the region include:

■ Pan-African Payment and Settlement System (PAPSS) – launched in July 2019 to enable instant, cross-border payments in local currencies between African AfCFTA member nations

■ Buna (from the Arab Monetary Fund (AMF)) – a multi-currency

payment platform launched in 2020 that clears and settles crossborder payments in eligible Arab and international currencies across the Arab region and beyond, with links to major trade partners

■ Gulf Payments Company – founded in December 2016 with the aim to build and develop a system that connects all payments systems in the GCC countries

Overall, the socio-economic benefits would be immense if countries across MENA and SSA fully digitalised their economies. Despite the widespread usage of social media, the uptake of digital technologies still has room to grow. Fintech is trying to further fill those gaps and promote digitalisation.

IN GENERAL – DIGITAL ECONOMIC DEVELOPMENT

$712 billion projected size of Africa’s digital economy by 2050

40% GDP per capita in MENA could rise by more than 40%

Digital economic development plays a strong part of this generally

Government support generally across wider economic development transformations via national strategies

22% of sub-Saharan businesses said that they’d either started to use or increased their use of digital tech during 2020

The potential for MEA remains huge and opportunities remain

Source: Various including The Fintech Times, Mastercard, World Bank MENA Fintech Association, Kaspersky, Economist, McKinsey, World Economic Forum, World Population Review, Accenture Image: Richie Santosdiaz and The Fintech Times

g.Summary: Key Takeways

The MEA region is diverse in geography, culture, and socio-economic factors, with one out of four people in the world residing there. The region spans three continents and can be subcategorised into regions such as MENA and SSA.

GEOGRAPHICAL

■ It's difficult to summarise the region as a whole as it spans across three continents.

■ It's common to subcategorise the region by its subregions in the context of MEA. The main ones include Middle East and North Africa (MENA) or Sub-Saharan Africa (SSA), while others include Arab World, East Africa and GCC.

ECONOMIC

■ MEA is home to the world's richest nations (such as Qatar, UAE, and Israel) but also the poorest (including the world’s poorest Burundi).

■ The economies are a mix, irrespective of wealth, based on some dependency on natural resources to varying extents. There's an overall consensus on wider diversification of the economy to be less reliant on this.

FINANCIAL SERVICES OVERVIEW

■ Financial institutions are generally heavily influenced by the public sector, conservative, and have been less developed compared to the rest of the world. Much of the population has been financially excluded or underserved.

■ Concentration of financial centres has been formed mainly with MEA’s most renowned cities, such as Dubai, as well as others like Abu Dhabi, Istanbul, Cape Town, and Johannesburg.

TECH AND STARTUP

■ MEA has a small share overall compared to the rest of the world, but there is strong potential to grow and fulfil the demand for the region's technological needs.

■ Innovation and hubs are concentrated in parts of MEA, notably Israel as well as Turkey, UAE, and some parts of the Middle East and the big four in Africa (Egypt, South Africa, Kenya, and Nigeria).

THE MEA CONSUMER

■ The MEA consumer is young in age, with a growing population. Informal economy plays a role, migrants and remittances are important, and low internet yet relatively high mobile penetration are important characteristics

■ The pandemic has further boosted digitalisation efforts that were already happening in MEA prior, which is significant given its traditional habits such as favouring cash.

ECONOMIC DIVERSIFICATION AND DIGITALISATION

■ Government-led strategies are boosting efforts and the need to diversify and digitalise the economy.

■ Market conditions, especially to close the financial exclusion gap, are also helping increase opportunities.

DURING THE PANDEMIC

73% MEA consumers shopped more online since Covid-19

69% payments will be cashless in the Middle East by 2023

MIDDLE EAST AFRICA

64% in Middle East only started using online payments during pandemic

53 % in Middle East are shopping more on their smartphones than pre-Covid

~40% increase usage of online banking in Africa

30% in Africa will visit a bank branch less post-pandemic

~40% increase usage of digital channels post-pandemic in Africa

PAYTECH, MONEY TRANSFER & REMITTANCES

DIGITAL & NEOBANKS

WEALTHTECH & INVESTING

DIGITAL CURRENCIES

OPEN & EMBEDDED FINANCE INSURTECH LENDING

Source: Richie Santosdiaz and The Fintech Times – Landscape is a sample of Fintechs mainly hq-ed and/or founded in MEA – Note some are multi-sector and/or fintech “Superapps;” gametechs – some will be more direct with fintech as a whole more than others (offers a sample of the ecosystem)

GAMETECH REGTECH

Chapter Two: Fintech landscape in the Middle East and Africa

hapter two focuses on the wider fintech sector in the Middle East and Africa (MEA). First, it analyses the sector as a whole and then breaks down the sub-sectors of fintech. These sub-sectors include payments, money transfers, and remittances, as well as non-payments, money transfers, and remittances, which will cover lending, open and embedded finance, digital currencies, among others. The chapter concludes with an overview of the wider ecosystem that impacts fintech, helping transition to chapter three by breaking down and ranking key fintech hubs in MEA.

a.Overview of fintech in MEA

The value of the global fintech industry is estimated to be at least $300billion. In 2021, global venture investment totalled $643billion (92 per cent higher than in 2020 at $335billion). Despite 2022 being a challenging year in the wider economic context, with inflation, Covid-19 recovery, and the war in Ukraine affecting aspects, fintech still remains resilient overall, despite more conservative VC funding rounds and layoffs.

ESTIMATED NUMBER OF FINTECHS AND STARTUPS IN THE AFRICAN CONTINENT

Fintech, despite its relatively short reign in its current form, is making an impact across MEA and the wider overall story of bringing financial inclusion for both the unserved and underserved – individuals and SMEs. In Sub-Saharan Africa, it is estimated that fintech is contributing $150billion to the region's GDP. In Israel, fintech is estimated to contribute around 11 per cent to the country's GDP.

In terms of value, the fintech industry in Turkey is estimated to be worth at least $15billion, growing at a rate of around 14 per cent per year. In the Arab World, the fintech sector is estimated to be at least $15billion now. MENA and the African continent have seen their own ground-breaking records with $2.6billion in 2021 for the former and the latter raising $1.8billion in just the first quarter of 2022 alone (despite the year being a challenge).

ECONOMIC VALUE OF FINTECH – MIDDLE EAST AND AFRICA

Contributions to GDP: $150 billion

Estimated value: +$15 billion

FINTECH IN THE MIDDLE EAST AND AFRICA (MEA)

Number of fintechs

+26,000 Global fintechs

~3,000 Fintech solutions across MEA

Value in Arab World

$2.5billion

Top three countries with most fintechs:

1. Israel 850+

2. Turkey 520

3. UAE 465

Value in United Arab Emirates 5%

+$33 billion Fintech transactions by 2023

Contribution to Sub-Saharan Africa’s GDP +$300 billion Global fintech value 11%

Safaricom contributes to Kenya’s GDP

Contribution to Israel’s GDP

15% Contribution to Turkish economy

Image: Richie Santosdiaz and The Fintech Times 2023. Sources: Various including The Fintech Times, Fintech Global, Fintech Landscaping in the Arab World *These are based on companies Hqed in Israel – it has more but many have moved abroad. Turkey’s includes 2 gametechs

1,000 estimated fintechs across Africa

ESTIMATED NUMBER OF FINTECHS AND STARTUPS IN THE MIDDLE EAST REGION (INCLUDING TURKEY AND ISRAEL)

Source: Various including The Fintech Times

b.Payments, money transfers and remittances

PAYMENTS OVERVIEW

Payments and paytech dominate the wider fintech ecosystem across the MEA region. So, how does this play out today? At one point, approximately 85 per cent of fintech firms in the MENA region operated in the payments, transfer, and remittance sectors. Although the wider MENA, Sub-Saharan Africa, and MEA region as a whole are seeing other fintechs emerging in various subsectors, payments continue to dominate the region.

Looking at the past few years, as highlighted by a report by Medici, the African Fintech Report 2020, payment gateway/processor startups raised nearly half of the total funding value in Africa. Just shy of $260million was raised, while mobile/digital wallet startups amounted to the second-highest amount of funding with nearly 36 per cent share of the total funding amount.

Despite the increase in other subsectors in fintech (not factoring in the global decline of 2022 overall), why do we still see payments playing out as a future engine driver of the fintech ecosystem in MEA? Well, the region as a whole has traditionally relied on cash and is home to some of the richest and poorest regions, offering the world significant corridors for remittances and wider international trade and investment to flourish. Payment digitalisation can continue to help the MEA region by offering more efficient and digitally friendly ways to send and receive money.

Digital payments are expected to grow at a compound annual growth rate (CAGR) of 15.39 per cent from 2022-2026 in the MENA region. Even before the outbreak of Covid-19, digital payments were growing rapidly in MEA. For instance, according to a study by McKinsey, the number of consumer digital payments transactions in the UAE grew at an annual rate of more than nine per cent between

2014 and 2019, while Saudi Arabia had significant growth in card payments at over 70 per cent between February 2019 and January 2020. These rates are much higher than Europe's average annual growth of four to five per cent.

McKinsey's study also found that 80 per cent estimated non-cash payments had increased by more than 10 per cent in the region due to the pandemic, with 43 per cent believing the increase was over 20 per cent. Data from some countries showed even higher growth rates, with Saudi Arabia's digital POS transactions doubling in the year to January 2021.

According to the MENA Fintech Association's SHIFT report, non-cash payments in the UAE alone are expected to account for 73 per cent of transaction volume by the end of this year, compared to 39 per cent in 2018. Non-cash payments are growing strongly across all payment types, including B2B, B2C and B2G.

One area of potential growth is embedded finance. Despite being in its infancy in the MEA region compared to the rest of the world, there appears to be potential for its acceptance and adoption.

Various sources predict that MEA's embedded payment industry is expected to grow and reach over $5.8billion by last year, with a compound annual growth rate (CAGR) of 26.7 per cent from 2022-2029. By 2029, revenues are expected to reach over $21billion.

During the pandemic, several studies have highlighted the MEA region's adoption of digital payments. For example, the previous McKinsey study showed that 90 per cent predicted that at least half of new users would continue to use digital payments instead of cash. The same study highlighted that over half of the survey respondents believed that non-cash payments would continue to grow strongly over the next five years, resulting in a cumulative

increase of digital transactions of over 50 per cent above 2020 levels across the Middle East.

The Mastercard New Payments Index showed that 95 per cent of consumers in MENA are considering emerging payment methods such as wearables, biometrics, digital wallets and currencies, QR codes, and contactless payment solutions. The study also showed that 88% of consumers in MENA have more ways and access to pay than they did in 2020, and three-quarters of consumers acknowledged that digital payment methods helped them save money.

In line with the rest of the world, digital wallets, including mobile wallets, have gained popularity in the region. A study of nearly 800 merchants in Australia, Brazil, Mexico, the UAE, UK and USD revealed that the UAE had the highest share of SMB consumers using digital wallets to pay online at over 30 per cent, ahead of the US at 18.2 per cent.

In Africa, digital wallets are estimated to have 562 million customers, 28 billion transactions, and be worth £452billion in value annually. Last year, Visa published a study on consumer attitudes towards digital versus physical payments (as well as cryptocurrencies) following the pandemic: Visa COVID-19 Central Europe, Middle East and Africa (CEMEA) Tracker. Visa’s findings highlight significant changes in attitudes towards e-commerce following the impact of Covid-19: 64 per cent of those surveyed in the UAE reported an increase in their online spending.

Furthermore, 87 per cent of respondents stated they would continue to shop online in the post-pandemic world. Notably, digital payments have remained the preferred method for transactions, with continued strong use of contactless solutions, including cards, digital wallets and mobile payments.

A different Visa study highlighted that over half of UAE customers plan to go cashless by 2024, which is much higher than the global average of 41 per cent. Payments continue to be a challenge in the MEA region due to fragmentation. One way this is being addressed is through economic integration with fintechs and wider digital organisations, enabling solutions like cross-border payments.

The following will highlight the concepts of buy now pay later, remittances and mobile money, with a particular focus on East Africa.

SPOTLIGHT: BUY NOW, PAY LATER (BNPL)

Buy now, pay later (BNPL) has gained attention globally, both positively and controversially, as an emerging fintech trend. How does it relate to the MEA (Middle East and Africa) region? While the digitalised BNPL concept is new, the idea of paying in instalments is not. In the UAE, Sharaf DG offered a Flexipay option, while JD Group's Bradlows in South Africa provided a ‘layaway’ payment scheme. In Turkey, instalment payments are a common practice for banks and online stores.

The MEA region is still catching up with the global fintech ecosystem, and BNPL is no exception. However, the pandemic has highlighted the need for a wider digital experience. BNPL has seen success in Europe, North America, and parts of Asia Pacific, including Australia and New Zealand, with Klarna from Sweden, Afterpay and Zip from Australia, and Affirm and Sezzle from the USA boosting the craze. The BNPL industry could reach almost $700billion in transaction volume worldwide by 2025.

While BNPL can be used in-store, it thrives through e-commerce, which accelerated its popularity during the pandemic. In the Middle East, local players such as Saudi Arabia’s Tamara and the UAE's Postpay, Tabby, Payby, Cashew, Spotii, and Sharia-compliant Taly from Bahrain offer BNPL services. The GCC and Israel are among the world's richest nations, with comparable household incomes to the US and Western Europe.

In Israel, BNPL has seen growth with US-Israeli Sunbit and Splitit, which already has a market cap of $150million. Jifiti provides a technological solution for banks to enter the BNPL sector.

Africa has a significant population of financially excluded people, presenting a unique opportunity for BNPL. South Africa, with its more advanced financial ecosystem, has had the traditional lay-by scheme. BNPL grew in Africa during the pandemic, and its market size is expected to reach $7.18billion. Nigeria, South Africa, Kenya, and Egypt are the four major fintech hubs in the continent.

In South Africa alone, BNPL is expected to grow almost 100 per cent to reach over $457.3million by the end of 2021. The biggest players in Africa include Payflex from South Africa, Lipa Later from Kenya, Credpal from Nigeria, and Sympl from Egypt.

The regulatory aspect of BNPL is a major challenge for the wider ecosystem. Many governments are grappling with how to protect consumers from it. Although BNPL is not a loan, consumers could miss their payments or overspend outside their budget or ability to pay back their items. Despite its challenges, BNPL presents an opportunity, and the MEA region could benefit from it. The digitallysavvy Gen Z and millennials have embraced BNPL.

SPOTLIGHT: REMITTANCES

Remittances are a major focus in the Middle East and Africa (MEA), particularly in fintech, which sees great potential and advancement in this area. Although remittances target all socio-economic backgrounds, the focus is often on blue-collar workers who lack access to traditional financial services. In Africa, 57 per cent of the population remains unbanked, while in the Arab World, this number is 69 per cent. The region is home to people from all over the world, particularly South Asia and Southeast Asia, where many work blue-collar jobs and are unbanked not only in their adopted countries but also in their home countries. For example, two-thirds of Egyptians are unbanked.

At year-end 2017, expatriates in the Gulf Cooperation Council (GCC) sent about $120billion back home to their countries, while African countries received an estimated $86.3billion in remittances at year-end 2018, accounting for four per cent of their GDP.

The MEA region is still catching up with the global fintech ecosystem, and BNPL is no exception. However, the pandemic has highlighted the need for a wider digital experience. BNPL has seen success in Europe, North America, and parts of Asia Pacific

The cost of sending money through traditional channels is still significant, with both nominal fees and significant margins on exchange rates. The transfer also takes time, especially when transferring money to another emerging market. Therefore, there are opportunities to improve the process through innovative means. The lack of access to financial services, especially among the unbanked and financially excluded, has resulted in many people resorting to traditional money houses and exchanges that charge high fees to wire money overseas.

According to the World Bank, on average, currency conversions and fees amount to seven per cent of the total

amount sent. Despite this, traditional channels are often the only option for overseas workers who may not have access to a bank account in either their adopted or home countries

Banks generally charge the most in fees for foreign transactions, so even if workers have access to a bank account, they may still incur significant fees. This is a negative situation, especially for blue-collar workers who may lose up to seven per cent of their hard-earned wages in fees. Fintech and digital solutions can help alleviate this situation. The global rise of fintech has had a significant impact on the remittances industry, particularly in the MEA region.

■ Mobile phone options – The high rate of mobile phone usage in the MEA region has facilitated the rise of fintech-powered remittance options. With the help of basic USSD technology, customers can bypass traditional exchange houses and send money directly via their smartphones or even basic mobile phones. This trend has been particularly noteworthy in East Africa, where remittances have thrived thanks to the accessibility and convenience of mobile-based solutions.

■ Lower exchange rates – Fintech companies have lower operating costs and a smaller physical footprint compared to traditional exchange houses. This translates to cost savings, which they can pass on to consumers in the form of lower exchange rates. While fintechs are still businesses and need to make a profit, their digital and cost-saving advantages enable them to offer more affordable remittance services. In some cases, fintechs even offer zero fees, which can greatly benefit consumers looking for cheaper ways to send money to their loved ones.

■ Fintech-powered remittance apps - They offer customers a wider range of payment options than traditional exchange houses. These options include credit and debit cards (which may come with transaction fees), as well as digital payment methods such as Google Pay, Venmo, and Apple Pay. Additionally, the rise of cryptocurrencies has introduced a new set of remittance options. This increased variety of payment modes gives consumers greater flexibility in how they send and receive money, and can help them avoid the high fees typically associated with traditional remittance methods.

This includes solutions from outside the MEA region as well as those developed within it. Whether it's traditional exchange houses or purely digital fintech solutions, the ecosystem has adapted to embrace digitalisation and the wider trend of digital transformation.

The pandemic has further highlighted the importance of digital solutions, particularly for remittances, as people with limited access to financial institutions rely on fintech and digital solutions to send money home to loved ones abroad. Despite the pandemic and the restrictions it brought, the global remittance flow of money in 2020 was not as badly affected as other sectors such as hospitality and tourism.

According to KNOMAD's latest Migration and Development Brief, remittance flows in low and middle-income economies were resilient in 2020, registering a smaller decline than previously projected. In 2020, the total amount of remittances was $540billion, only 1.6 per

cent below the 2019 figure of $548 billion. This decline was much lower than the 4.8 per cent decline during the 2009 Global Financial Crisis, and far lower than the over 30 per cent fall in FDI flows to low- and middle-income countries (excluding flows to China) in 2020.

In other words, despite the challenges posed by the pandemic, there was resilience in the global population across various aspects of behaviour, including remittances.

SPOTLIGHT: MOBILE MONEY IN EAST AFRICA

It is challenging to discuss the global phenomenon of mobile money without acknowledging East Africa, where the trend originated and has gained popularity. According to a report by the International Monetary Fund (IMF) titled 'Fintech in Sub-Saharan African Countries', Sub-Saharan Africa (SSA) is now the leader in mobile money transfer services, which has greatly increased access to financial services.

The report notes that "East Africa is at the forefront of mobile money adoption and usage. With an appropriate pricing strategy to attract customers, suitable regulation, and a reliable and trustworthy network, Kenya represents one of the most successful cases in the use of mobile money."

For instance, in Senegal, over 70 per cent of adults reported using mobile money within the past 30 days, and almost half of the respondents faced challenges with reading and writing. In Somalia, mobile money usage is around 85 per cent of the population, which is much higher compared to the UK (25 per cent in 2020) or the USA (29 per cent in the previous year).

This trend is unique to the Middle East and Africa region, driven by a combination of factors, including the increasing use of mobile phones. Mobile phones have helped bridge gaps in accessing financial services and the internet, which are often taken for granted in developed economies. Fintech has played a significant role in this transformation, with mobile devices providing access to financial services like payments and money transfers. For example, M-Pesa from Kenya has become the largest mobile wallet and a leading fintech company in the continent. It has enabled many Africans to access financial services, even with just a basic mobile phone that uses unstructured supplementary service data (USSD) technology.

As mentioned, with this initially being at the time an East African phenomenon – the growth of mobile payments has accelerated across the world and also to other parts of MEA beyond just East African countries like Kenya or Uganda or Rwanda and Tanzania.

For example, the GSMA report highlights that they expect account growth to come from not only long-established mobile money markets but also in African countries where this concept isn’t as widespread as in East Africa – countries in West Africa notably Nigeria, as well as Angola and Ethiopia. With news of the opening of the Ethiopian market for foreign mobile money providers for instance, much can be seen in future penetration there with mobile money.

According to a report from McKinsey, it said the development of agent networks as a substitute for brick-and-mortar environments has become a key growth strategy for fintechs in Africa. For example, in Nigeria they have a network of over 700 mobile money and banking agents for every 100,000 adults, with 43 agents for each ATM in the country. In Kenya the numbers are even higher, with 1,322 agents for every 100,000 adults and 189 agents per ATM.

Beyond just SSA, MENA, although trailing in comparison, still has nearly 60 million registered accounts (30 days) – which represents a seven per cent growth from the previous year from the same GSMA report. As mentioned earlier it was the region with the highest growth (49 per cent) for the value of transactions. It is also predicted that MENA will also be a potential one to watch for future growth as well. Despite attempts by banks to catchup, mobile money dominates. The most successful MNO-led mobile money launches (notably M-Pesa and MTN Money) have from five to 10 times as many clients as bank-centric approaches.

Solutions such as M-Pesa have had a significant impact on average Africans with just basic USSD technology. It is remarkable to note that M-Pesa was launched in 2007, before the term fintech gained its current definition, and even before the 2008 Global Financial Crisis that helped accelerate fintech in its current state. Apart from M-Pesa, other players in the African continent include Airtel, MTN, and others.

Today, mobile money, which was initially an East African phenomenon in 2012, has spread globally, and the innovation is now being enjoyed by people across the world. Nevertheless, Sub-Saharan Africa still accounts for half (53 per cent) of all total global 30-day active mobile accounts.

In 2021, P2P transactions topped $386billion for the first time, with transaction values growing fastest in the Middle East and North Africa (MENA) region at 49 per cent, followed by Sub-Saharan Africa at 40 per cent. As mentioned earlier, although this trend initially started in East Africa, the growth of mobile payments has accelerated worldwide, including other

With P2P, it topped $386billion for the first time in 2021, with transaction values growing the fastest in MENA at 49 per cent and followed by Sub-Saharan Africa at 40 per cent.

Feedback on mobile money in Africa as a whole is whether the future can see more advancements in technology. But much of this will of course have to interlink with the alleviation of poverty for those who barely can even afford a basic mobile phone, as USSD technology is of course not up-to-date. This presents challenges that hopefully can see the ecosystem further advance, hopefully economies in the region can see rising standard of living and a growing middle class that will help influence the environment and wider supply and demand and wider economics.

Finally, the AfCFTA, in particular, can see Africa further benefit with cross-border payments, in particular fees and other hurdles and inefficiencies, remaining a present challenge. Therefore, mobile payments could only benefit from further economic integration with its fellow African nations.

Mobile money, which was initially an East African phenomenon in 2012, has spread globally, and the innovation is now being enjoyed by people across the world. Nevertheless, Sub-Saharan Africa still accounts for half of all total global 30-day active mobile accounts

c.Other: Non-payments, money transfers and remittances

While MEA presents a significant proportion of its fintech activity around payments, mobile transfers and remittances, the other sub sectors of fintech are growing as well and eating its share of the overall fintech pie in the region. The following will highlight the key ones and go into detail on its current situation in MEA.

1: INSURTECH

The global insurtech market is expected to reach at least $10 billion by 2025, and the MEA region can play a strong part in that. In MEA, as has been highlighted, financial exclusion is a challenge, and this ripples through to insurance.

This not only affects those who lack insurance, as highlighted in Africa where South Africa alone commands around 80 per cent of total premiums, but also in the Middle East, where the non-GCC region is mainly uninsured.

As with the industry as a whole globally, the opportunity has been the digitalisation of the industry and the rise of insurtech. And in the case of much of MEA, as with much of fintech really as a whole, much of it has not just been the ultimate digitalisation of it but bringing opportunities to the masses (aka inclusion) in the first place, especially in the case of insurance like in Africa, where at its lowest, only three per cent of the population has insurance in the first place.

Having said that, the current situation of insurtech in Africa has potential. There is a sizeable proportion of insurtech startups in Africa that are in the microinsurance and digital brokerage sector. Many that are also growing include B2B data analytics, ancillary revenues, insurance add-ons to small and medium enterprises (SMEs), and vertical SaaS solutions. Examples of insurtechs include Egypt’s Amanleek and ClickMare, Ghana’s WorldCover, Kenya’s Bismart and InsureAfrika, Nigeria’s Airtel, and South Africa’s CompareGuru and Naked Insurance.

As highlighted earlier in the report, there have been changes in perceptions (although generally slower than much of the rest of the world) towards insurance in the MEA region, as well as increased accessibility. Even richer parts of the region, such as the GCC, historically had a low rate of uptake in insurance, but changes are being made to encourage uptake and promote inclusion.

For instance, last year in sub-Saharan Africa (SSA), Nigeria passed a health insurance law called the National Health Insurance

Authority Bill 2022, which aims to cover the 83 million poor Nigerians who cannot afford to pay for premiums. This is a significant development, as eight in ten Nigerians currently lack access to health insurance.

Similar to banks, insurance companies in the MEA region are generally optimistic about the emergence of insurtech. For example, a report by Capgemini revealed that two-thirds of UAE-based insurers are keen to collaborate with insurtechs, and 85 per cent of them are interested in partnering with technology providers. There are several examples of such partnerships, including:

■ The Central Bank of the UAE recently signed a memorandum of understanding (MoU) with the Saudi Central Bank (SAMA) to cooperate on the supervision and regulation of the insurance sector between the two countries. The collaboration via the MoU will help reinforce, improve, and standardise the regulations and approach of the authorities towards regulated businesses, including insurance companies and brokers.

■ Old Mutual, a pan-African financial services group, has partnered with CoverGo, a global no-code insurance SaaS platform for P&C, health, and life, to drive digital insurance transformation across Africa. The strategic partnership was formed through Old Mutual's investment in CoverGo's $15million Series A last year. The partnership will enable Old Mutual to leverage CoverGo's platform to streamline its insurance ecosystem by launching insurance products quickly, increasing sales through new channels, and enhancing user experience across 13 countries in Africa.

Notably, not only is the insurance sector growing in the MEA region, but also the region itself, particularly the wealthy GCC sovereign wealth funds mentioned in Chapter One, is playing a significant role in the global space. For instance, last year, Wefox, a Berlin-based insurtech, closed a $400million Series D funding round led by Abu Dhabi-based Mubadala Investment Company. Insurtech could also play a vital role in promoting financial literacy across much of the MEA region. Many people in the region are unaware of the benefits, procedures, coverages, and terms and conditions of insurance, including car, health and life insurance.

2. DIGITAL, CHALLENGER AND NEOBANKS

The focus of this report is on digital banks. Similar to the global definition, neobanks operate purely digitally, while challenger banks are mostly digital. In other words, neobanks lack any physical footprint, while challenger banks are mostly but not entirely digital, although much more digital than a traditional bank. Additionally, digital banks can take the form of either a neobank or a challenger bank.

While still in their infancy compared to much of the world, especially in Europe and the US, neobanks are playing a growing role in the MEA region. As highlighted earlier in this report, accessing traditional financial services remains a challenge for both individuals and SMEs, including something as seemingly simple as opening a bank account. The growing market of neobanks and challenger banks can be best summarised in two ways:

Firstly, what could be more unique in MEA than in the UK, for example, is that neobanks have been adopted by the banks themselves, where they have launched their own neobanks and/or acquired one. Examples include Liv by Emirates NBD or Mashreq Neo by Mashreq Bank and ADCB Hayyak by ADCB in the Middle East, Pepper by Leumi Bank or ila Bank by ABC Bank and meem by Gulf International Bank of Bahrain in Israel, and Tosla in Turkey through its AkOde subsidiary of Akbank. Additionally, there is STC

Pay, which, although not a bank, is part of the major telecom operator of Saudi Arabia, STC Group.

Secondly, there are independent neobanks such as Now Money and Rise or Dopay from Egypt, which partner with a bank to operate via the bank’s licence. NOW Money partners with Commercial Bank of Dubai (CDB), Rise with United Arab Bank, and Dopay with Barclays and Visa. In Turkey, there is also Papara, which received approval in 2016 to operate as an electronic money institution. For the first time in Turkey, it produced and launched a non-bank dependent pre-paid card with the Mastercard logo and is now a member of Mastercard, Visa, and Interbank Card Centre, according to its website, which highlights that it currently has over 12 million users.

In the UAE, after YAP officially debuted last year, governmentbacked Wio followed suit in September with an initial focus on the SME market. In Saudi Arabia, SAMA granted licences to STC Bank and Saudi Digital Bank in June 2021 and D360 in February last year. It is worth noting that the UAE banking regulator has already granted approvals for neo-bank operations from Wio, Zand, and Al Maryah Community Bank. This year, Naqd Community Bank, backed by Royal Strategic Partners, won preliminary approval from the UAE Central Bank.

Beyond the GCC region and Arab Middle East, in Israel, the country had its first bank in over 40 years in January 2021.

However, this is a digital bank called One Zero. This launch follows Israel's open-banking reforms adopted in October that year, also enabling customers to move from one bank to another more easily. Much of the new bank is powered through AI, as with other neobanks and challenger banks, in terms of evaluating a customer’s financial situation.

Moving to Africa, it was estimated last year that the continent had 21 digital banks servicing over 18 million customers. Interestingly, 80 per cent of them are concentrated in two countries – Nigeria and South Africa. Headlines in the space include, for example, pan-African bank Ecobank, which is pursuing an application programming interface (API) approach that allows non-bank fintechs to connect to its financial infrastructure and access a broader range of products and services. In terms of users, the list opposite shows the top 10 in Africa in 2021.

Other players in the digital banking industry in Africa include Orange Bank, a subsidiary of the French telecom company, Orange, which has extensive geographical coverage in West Africa, and 7aweshly from Egypt.

In November 2021, the Central Bank of Nigeria (CBN) granted provisional approval to MTN of South Africa and Airtel of India, both large telecoms with a significant presence across Africa, to operate payment service banks in Nigeria. This decision provides Nigerians, particularly the unbanked population, access to telecoms payment platforms such as MoMo and Smartcash, and they could now join local telecom operators like Glo and 9mobile, which already have licences. In other words, they can operate independently, rather than form partnerships.

Compared to much of the world, it appears that telecoms in Africa play a larger role in inspiring the current state of accessibility of fintech to the masses, which can be argued to have brought about

THE TOP 10 USERS IN AFRICA IN 2021

the rise of independent digital banks that offer disruptive services, especially to the unbanked population. Telecoms are also playing a part in this through their own offerings. Given that mobile money services from telecoms have helped revolutionise much of Africa, they have a significant advantage in this regard.

This also means that independent digital banks, such as those mentioned earlier, have a more significant role to play, especially since much of the market remains unserved or underserved. That being said, banks in Africa have had to react and, at the very least, launch their own mobile money products. Standard Bank from Africa launched Unayo in 2021 as a result.

Source: BCP Digital Banking in Africa

3. GAMETECH

The pairing of gametech with fintech is becoming an increasingly strong couple, as games need to commercialise and make money. With the rise of mobile gaming, online games have been offering in-app purchases that enhance the experience of gamers and their digital wallets. It is hard to imagine, but the rise of fintech within gaming has come with the rise of gaming and gametech in particular.

Gametech in the Middle East and Africa (MEA) has strong potential, as it is home to a young and digitally-savvy population in parts of the region. The retail industry is worth over $3.5trillion worldwide (pre-Covid-19 figures), and the video game market hopes to carve out a small slice, expected to be worth around $300billion by 2025. The region, such as the GCC, with high mobile penetration and a wealthy populace, presents opportunities for gametech

The various economic development policies and strategies in MEA heavily promote tech and wider digital transformation. In Africa and parts of the Middle East, the large youth population and the potential for digital transformation across all spectrums presents strong opportunities to foster youth to be digitally-savvy and provide solutions to do so. Therefore, with a growing industry such as gametech, coupled with the ongoing coronavirus pandemic that is requiring the world to be as virtual as possible, an industry like gametech has strong potential.

gametech makes sense in a market like Saudi Arabia, which is young, tech-savvy, ambitious, and developed.

MEA also presents a strong opportunity for the gaming and gametech industry because it is home to one of the world's most spoken languages – Arabic. Arabic is the world's fifth most spoken native language globally, and 70 per cent of the Arab world use it as their default language on their smartphones. This makes Arabic an essential language in the Middle East, including Israel, where Hebrew and Arabic are the two official languages, and in much of Africa, where it is vital for the world's Muslim population.

In terms of Africa as a whole, the gametech industry is still in its infancy, but has recently seen an explosion of opportunities. However, organic developments have emerged due to its untapped potential. For instance, the Africa Game Developers Association was launched, which is a community boasting members from over 18 African countries.

Despite the opportunities, there are challenges such as converting opportunity to commercialisation. The region possesses strong talent, but the true exploitation of gametech remains one that the Middle East and Africa (MEA) as a whole can foster. Regarding Africa, another challenge is the lack of a central storefront that prioritises and appreciates the perspective of both African creators and players. Additionally, the volatility in local currency valuation can make it difficult for players to find value for money in the global gametech market. Nevertheless, the success of Africa's early-stage gametech ecosystem is notable, with growing local digital retail outlets such as Bonako Games Arena and Masseka Game Studio. Companies like Ludiqueworks, highlighted earlier, are showing the aspirations of the African continent in this space.

Israel, despite its success as a tech hub, is still catching up in the sector. However, according to a report from Deloitte, in its short time in the sector since the early 2000s, it has seen global successes in the industry, such as with Playtica and Plarium.

In 2016, the gaming expenditure in the Middle East and North Africa (MENA) region was estimated at $3.2billion. By the end of last year, the spending on mobile gaming alone in MENA was estimated to have reached $2.3billion. According to Statista, in 2017, the video gaming industry's shared revenue in the Middle East was around $3billion, with Turkey, Saudi Arabia, and the UAE being the biggest markets.

ARPPU, which is the average revenue generated by a paying user during a specified time frame, is highest in Saudi Arabia at $270 compared to China's $32, which is the world's biggest gaming market. With a large youth population, of which 70 per cent is under 30 years old, and a population of 35 million people, Saudi Arabia presents a significant opportunity for the gametech industry. Before the opening of the Kingdom economically and Saudi Vision 2030, there were few opportunities for leisure and entertainment. Therefore,

Turkey has made recent headlines and has contributed massively to the MEA gametech sector, specifically by producing unicorns like Dream Games and Peak, which was the country's first unicorn after being acquired by American Zynga in June 2020. Turkey's gaming sector, overall, has been a shining beacon, not only for the two unicorns mentioned but also in terms of its revenues and contributions to the community. In 2020, the gaming industry in Turkey saved revenues reaching almost $900million ($880million). Also, in 2021, Turkish-developed mobile games accounted for 20 per cent of the top 100 downloaded titles in America. Turkey's gaming sector, generally, has catapulted to be one of the major centres in the world - with not just Istanbul but even the capital, Ankara, also being home to various players. In Europe, Istanbul (2nd) and Ankara (4th) are the cities with the most gaming studios behind first place London and third place Paris.

The growth of esports globally can also be observed in the MEA region. For instance, in terms of prize money, twelve countries from MENA featured in the top 100 earning countries. Jordan ranked highest among the MENA countries, coming in at number 23 with total earnings exceeding $6million. The other countries in the top

Gametech in the Middle East and Africa has strong potential, as it is home to a young and digitally-savvy population in parts of the region. The retail industry is worth over $3.5trillion worldwide (pre-Covid-19 figures), and the video game market hopes to carve out a small slice, expected to be worth around $300billion by 2025

100 include Lebanon (27th), Saudi Arabia (46th), the United Arab Emirates (66th), Morocco (79th), Iraq (82nd), Bahrain (83rd), Tunisia (84th), Kuwait (85th), Algeria (86th), Egypt (87th), and Palestine (98th). The overall list had the United States, China, and South Korea in the top three positions.

Despite Covid-19, the importance of esports accelerated globally as many sports events were either cancelled, postponed, or modified to promote social distancing and ensure players' safety. Esports continued in the MEA region, with Saudi Arabia organising a new charity esports event to raise $10million in prize money to fight the pandemic.

In 2021, Saudi Arabia announced the launch of a new business training programme, The Game Changers initiative, led by the Ministry of Communications and Information Technology, to grow and boost the e-gaming sector. The program aims to provide apprenticeship training to participants, help them find jobs in the sector, and establish startups.

In the same year, Shorooq Partners, a UAE-based early-stage venture capital firm that invests in innovative startups in the MENAP region,

launched SHFT Build, a programme focused on supporting sectors that are driving the future economy. The first edition focuses on the gametech sector by targeting founders who build startups across the value chain of gaming and helping them partner with other aspiring founders and game enthusiasts. Applications were open for MENAP-based game studios, game developers, distribution platforms, developers of game engines, and streaming platforms.

Furthermore, depending on the future of the metaverse, it could present opportunities not just for gametech, which many in the space seem to agree could see a large uptake in adopters, but also for a region like MEA, which has a large number of users in parts like Saudi Arabia and Turkey, which have been not only using but also contributing to its development.

Despite gametech in MEA being in its infancy compared to more advanced gametech economies in the USA and some parts of Asia, it presents an opportunity for a thriving gametech ecosystem. Fintech and gametech will continue to play an important role, particularly now in our digital world, both prior to and further accelerated by Covid-19, even in our leisure time.

4. WEALTHTECH AND INVESTING

Traditionally, wealth managers have offered a range of professional financial services to their mostly wealthy, but also middle and upper-middle-class clientele. These services include investment advice and general financial planning, helping clients manage their finances and portfolios. However, with the rise of fintech, this process has become more digital, empowered by robo-advisory and wider AI and machine learning. Fintech has disrupted the industry, making wealth management more accessible and not just exclusive to a select few.

The relatively low cost of entry for this subsector has made wealthtech an attractive investment for fintech startups. This allows them to market wealth-management services to clients at lower prices. The growth of this fintech subsector has been significant, with global wealthtech funding reaching a new record in 2021, with $13.6billion raised during the first half of the year.

MEA presents an opportunity for this subsector, catering to both the ultra-wealthy and those with more modest incomes.

challenging year for everyone, including the ultra-wealthy, who reportedly shed a combined $10trillion, or 10 per cent, from their net worth due to global economic uncertainty. Nonetheless, there are still opportunities, particularly for a region like MEA, which many call home

In terms of the wealthy, the Middle East is expected to be home to at least 18,000 multimillionaires, each worth at least $10million. The UAE, home to flashy Dubai and Abu Dhabi, has at least 92,000 millionaires, each worth at least $1 million, and private wealth is estimated at shy of $1trillion ($966billion). It has attracted people from around the world, particularly High Net Worth Individuals (HNWIs).

While much of the world's attention focuses on the poverty of Africa, the continent also has a significant number of rich people. The research firm New World Wealth, in collaboration with Henley & Partners, published a report on wealth in Africa for this year, highlighting that five countries contain over half of the continent's wealth: South Africa, Egypt, Nigeria, Morocco, and Kenya. South Africans have the greatest combined wealth with over $651billion, followed by Egyptians with $307billion and Nigerians with $228billion. Therefore, Africans with money would need wealth management.

2022 was a challenging year for everyone, including the ultra-wealthy, who reportedly shed a combined $10trillion, or 10 per cent, from their

net worth due to global economic uncertainty (such as the energy crisis and the Ukraine War). Nonetheless, there are still opportunities, particularly for a region like MEA, which many call home.

Despite ongoing global economic challenges, wealthtech and its disruption via technology presents a new interface that is relatively new for many to adapt to, both for the wealthy and not so wealthy. Financial institutions have had to embrace it. In addition, the Middle East has seen wealthtechs emerge, such as Finamaze, Sarwa, and StashAway, which have all made wealth management more accessible to the masses, particularly tech-savvy people. In Africa, a similar trend can be observed, as with its Middle Eastern counterparts – wealth management was mainly for the wealthy, and it was more traditional in its interaction, i.e. not really digital.

Nonetheless, the continent has seen changes that have brought financial inclusion to a once mainly affluent offering. For instance, there is EasyEquities from South Africa that was launched in 2015, which boasts over 1.4 million registered users and 40 per cent of them having been converted to being real investors. The company claims to have been able to scale thanks in part to relationships with distribution partners like Satrix and Capitec Bank for instance. There is also Kenya’s Ndovu, which aims to have over 220,00 users in three years’ time via expansion. In addition, in Nigeria there is Piggyvest, which is an online savings platform giving the art of saving access to people who didn’t have it the first time.

Another example is Thndr in Egypt, which was established in 2019 as a trading and investment platform. Less than one percent of the population in Egypt invests in stocks, and it is not a common practice among the population. Thndr tried to break those barriers and make investing accessible to everyone, particularly the older age group (45 to 52 years old), by providing a user-friendly solution. As a result, Thndr has seen over 100,000 registered accounts and 15,000 active users per week through their app. In Nigeria, there is Chaka, which aims to provide more Africans access to global markets.

TOP 5 MOST POPULAR CITIES FOR ULTRA-WEALTHY IN MEA 2021

Other well-known African fintechs, such as TymeBank and Access from South Africa and Kuda Bank from Nigeria, are also classified as wealthtech, indicating the growing popularity of the subsector on the continent. In 2021, wealthtech was actually the third-largest sector in the African continent in terms of deals, with 41 deals. Although this declined from 2020's 49 deals, this decline was seen across many parts of the world. Despite the overall challenges of wealth due to uncertainty, there remain opportunities both in the field and its digitalisation.

2022 was a

Regtech emerged following the 2008 Global Financial Crisis, as the financial services industry became stricter with its lending and moved away from its careless past with the US subprime mortgage crisis that caused that disaster. The industry saw a dramatic increase in regulation, resulting in a rise in spending on compliance. The birth of regulatory technology – or regtech –came from using technology to stay compliant. While the MEA region was spared compared to much of the West from the 2008 Crisis, the emergence of regtech did catch on.

Globally, the industry alone is expected to be worth $12.3billion this year and $19.5billion by 2026. Like any other financial hub, from London to Singapore, MEA financial hubs such as Dubai and Mauritius have also faced their share of compliance and anti-money laundering (AML) challenges in the past and present.

Nonetheless, regtech comes to the rescue. Though new to the scene and still very much in its infancy in the MEA region (for instance, in 2019 only four per cent of fintech VC funding in MENA went to regtech startups), there has been potential for it and its need.

For example, in 2018, there was an e-KYC project that was led by Abu Dhabi Global Market (ADGM)’s Financial Services Regulatory Authority (FSRA) in collaboration with a consortium of major UAE financial institutions such as ADCB, Abu Dhabi Islamic Bank, Al Fardan Exchange, to name a few. It aimed to develop a blockchainbased e-KYC to help financial institutions with a single location where customer identification and verification could be performed once for a customer. In 2020, FSRA of ADGM also launched three regtech pilot initiatives, with the objective of helping its regulated financial services firms achieve better compliance and risk management outcomes, while reducing regulatory costs and burden.

In the MENA region, several countries have launched their own regtech or supertech initiatives, including Bahrain, Oman, Jordan, and Egypt, in addition to the UAE as previously highlighted. Israel, a leader in cybersecurity as mentioned in previous reports, and with its strong position in tech and fintech, has the potential to become a leader in regtech.

In fact, it is already a leader in terms of investment deals, with six out of the top 10 regtech deals outside of North America and Europe in 2020 going to Israeli regtechs such as aqua, Namogoo, anyvision, Cheq, Ironscales and Cymulate.

Regtech is still an emerging concept in Africa but has great potential. Many African countries are in the process of adopting data protection laws, such as South Africa's Protection of Personal Information Act (POPI Act), which started on 1 July 2020 with a one-year grace period.

In Africa, it takes an average of $500,000 and 18 months to build and launch financial products due to rigorous licensing and compliance processes, multiple integration layers, complex banking and third-party relationships, and investment in complicated core-banking infrastructure.

Even before Covid-19, digitalisation and the increasing adoption of fintech, including in the MENA region, brought challenges. During the pandemic, a survey conducted by Cambridge University highlighted that 75 per cent of MENA financial regulators who responded considered cybersecurity risks to have increased, and 67 per cent reported increased operational risks.

Globally, the industry alone is expected to be worth $12.3billion this year and $19.5billion by 2026. Like any other financial hub, from London to Singapore, MEA financial hubs such as Dubai and Mauritius have faced their share of compliance and anti-money laundering (AML) challenges

In Africa, it takes an average of $500,000 and 18 months to build and launch financial products due to rigorous licensing and compliance processes, multiple integration layers, complex banking and third-party relationships, and investment in complicated core-banking infrastructure. Even before Covid-19, digitalisation and the increasing adoption of fintech, including in the MENA region, brought challenges. During the pandemic, a survey conducted by Cambridge University highlighted that 75 per cent of MENA financial regulators who responded considered cybersecurity risks to have increased, and 67 per cent reported increased operational risks.

5: REGTECH

6. DIGITAL CURRENCIES

What is the current state of digital currencies and cryptocurrencies in the MEA region? Despite facing challenges, particularly with cryptocurrencies, there is still a lot of activity in this space and it plays a significant role in the region's ecosystem. Starting with digital currencies in general, recent headlines included the UAE Central Bank announcing in October 2021 that it had completed the world's largest pilot of central bank digital currency (CBDC) transactions. Other regulators, such as China's Digital Currency Institute, have also been exploring CBDCs. In October 2021, Nigeria launched its CBDC, becoming the first African country to introduce a digital currency. In July 2021, the Central African Republic launched the Sango Coin crypto asset project, which has raised questions over how it will be used and has led to a dispute with the regional central bank.

In November 2021, Abu Dhabi launched the Middle East, Africa and Asia Crypto and Blockchain Association (MEAACBA), a non-profit backed by the emirate's financial free zone, Abu Dhabi Global Market. Its aim is to accelerate the development of blockchain and cryptocurrencies in the region.

Turning to cryptocurrencies, MEA has made headlines, particularly in Africa, with regards to their adoption. Following El Salvador's decision to adopt Bitcoin as an official currency, the Central African Republic announced in April 2021 that it would do the same, becoming the first country in MEA and second in the world to do so. Four MEA countries – Nigeria (11th), Turkey (12th), Morocco (14th), and Kenya (19th) – made it onto the list of the top 20 countries globally for cryptocurrency adoption. See the 2022 Global Crypto Adoption Index Top 20 chart opposite.

■ Devaluation of currency hedging in times of uncertainty

– The devaluation of currency hedging during times of uncertainty is a common phenomenon in the developing world. It is not surprising to see countries that have undergone difficult circumstances turning to cryptocurrencies like Bitcoin and Ethereum for savings protection. These digital assets offer a certain degree of stability and can help protect assets from a declining currency, or in the case of some countries, financial collapse, despite their inherent volatility. This can explain the appeal of cryptocurrencies in countries like Turkey and Egypt, both of which have experienced currency fluctuations in recent years. In fact, Egypt ranked 24th in the Global Crypto Adoption Index.

■ Necessity vs. Leisure – Unlike many in the West who mainly use cryptocurrencies for added value or leisure trading, in MEA, many people use cryptocurrencies out of pure necessity. For example, a business owner in Lebanon may have to use cryptocurrencies to purchase supplies from abroad because the Lebanese Lira has significantly devalued. Similar stories can be heard across the developing world and regions facing current political and/or economic difficulties.

■ Financially excluded – For many, especially in Africa where over half the population is still financially excluded, cryptocurrencies have helped people access services they would not have had the chance to, such as payments, remittances, and insurance. For instance, in Kenya, there are farmers who are using the likes of Sarafu, Kenya’s cryptocurrency, to sell vegetables and purchase supplies without any cash.

This is similar to the 2021 list where three MEA countries made the list – Kenya at fifth place, Nigeria at sixth place, and Togo at ninth place. Other MEA countries that missed the top 10 were South Africa (16th), Ghana (17th), Tanzania (19th), and Afghanistan (20th). Even in more established and developed parts of MEA, cryptocurrency adoption has grown. For instance, New York-based cryptocurrency exchange Gemini released a report and included the UAE and Israel, where 28 per cent of people in Israel and 35 percent of people in the UAE own cryptocurrencies.

The MENA region may be one of the smaller crypto markets in the 2022 Global Crypto Adoption Index, but it's also the fastest-growing. MENA-based users received $566billion in cryptocurrency from July 2021 to June 2022, 48 per cent more than they received the year prior. In the GCC nations, Saudi is the third-largest crypto market in MENA, and the UAE is in fifth place. With SSA, while it only accounts for $100.6billion in on-chain volume received from July 2021 to June 2022, which represents only two per cent of global activity and 16 percent growth over the previous year, it does contain some of the most well-developed cryptocurrency markets of any region with deep penetration and use in everyday financial transactions for many people. Why are cryptocurrencies popular in MEA as a whole?

Similar to much of the world, where various countries are considering how to regulate the industry or outright ban cryptocurrencies, the MEA region is also facing this question. Should it be countries like India, which announced it would tax cryptocurrencies? Should it be countries like Nigeria, where it is restricted? Or should it be those that outright ban them?

Currently, nine countries ban them, with seven of them being in MEA (Egypt, Qatar, Iraq, Oman, Algeria, Tunisia, and Morocco), and the other two being China and Bangladesh.

Time will tell, but most likely, an in-between approach will be taken, as many countries are considering. Instead of going completely laissezfaire or outright banning them, there will likely be some middle ground, where governments announce plans to tax crypto, as in the case of India. There could potentially be regulations that ultimately protect the consumer. However, this is proving challenging given the decentralised, anonymous nature of cryptocurrencies. The South African Reserve Bank, for example, is planning to introduce regulations that will see cryptocurrencies treated as financial assets to balance investor protection and innovation and is testing a new CBDC.

Despite recent challenges, cryptocurrencies and digital currencies have made an impact in the world and can be felt in MEA. They have brought attention to the wider fintech and digital ecosystem. Cryptocurrencies have impacted and offered hope for many in MEA, particularly those who use them out of necessity, such as farmers in Kenya using Sarafu to sell vegetables and purchase supplies without cash.

The MENA region may be one of the smaller crypto markets in the 2022 Global Crypto Adoption Index, but it's also the fastest-growing

2022 GLOBAL CRYPTO ADOPTION INDEX TOP 20

Rank Country

1st Vietnam

2nd Philippines

3rd Ukraine

4th India

5th United States

6th Pakistan

7th Brazil

8th Thailand

9th Russia

10th China

11th Nigeria

12th Turkey

13th Argentina

14th Morocco

15th Colombia

16th Nepal

17th United Kingdom

18th Ecuador

19th Kenya

20th Indonesia

Source: Chainalysis 2022 Geography of Cryptocurrency Report

7. OPEN FINANCE

MEA, like much of the world, is still in the early stages of adopting, considering, or even understanding the principles and benefits of open banking and open finance. Open banking allows financial institutions to share customer data with trusted thirdparty providers through open banking APIs. Fintechs have played a significant role in the growth of open banking through partnerships with financial institutions or directly. Open finance extends beyond banking to encompass all financial services offerings.

Open banking and open finance have been growing in key regions worldwide, particularly in the European Union (EU) and the United Kingdom, which saw significant growth in open banking before Brexit. Australia is another country experiencing growth in open banking. Much of the growth in these regions was driven by legislation.

Despite this, as of 2019, at least 87 per cent of countries had some form of open APIs. LearnBonds estimates that over 10,000 financial institutions globally have implemented open banking. The concept of open banking and open finance is also gaining traction in the MEA region. The development of open finance in the MEA region will be led by the following factors:

Legislation–led: This is essentially what happened in Europe, as seen in the UK with the implementation of open banking. In fact, much of the foundation of what the world knows about open banking can be traced back to 2013 when the European Commission revised its Payment Services Directive 2

(PSD2) proposal, recommending that banks allow third-party access to account data and initiate payments. It's worth noting that this year, the European Commission is expected to publish a framework for Open Finance in Q2, which could set a benchmark for the rest of the world.

Open banking has grown in popularity in the UK, and its interest has spread to other parts of the world, including the Middle East and Africa (MEA). Legislation-led efforts have also begun to take root in the MEA region, such as in Saudi Arabia and Bahrain.

Bahrain has been an early adopter of open banking compared to the rest of the region, passing open banking regulations and leading the way in launching open banking services and platform companies, like Tarabut Gateway.

Saudi Arabia has been making headlines in the region with its open banking initiative. Earlier this year, SAMA announced the launch of a new lab to allow businesses to test their products against an established framework. The service enables the consumers of financial institutions to securely share their data with a third-party provider, facilitating new and innovative services and products for consumers. This comes after the issuance of the Open Banking Framework last November, aimed at aiding innovation and accelerating development in the sector.

In Kenya, the Central Bank of Kenya (CBK) prioritised open infrastructure in its 2021-2025 strategy, stating that "CBK will facilitate the development of an industry-wide standard for open

but secure APIs in a way that guarantees access, safety, and integrity of data sharing systems." Kenya's central bank gave open banking the green light in 2020, paving the way for the Cooperative Bank of Kenya to pioneer the new business landscape by integrating its systems with 12 APIs to reach more customers.

Industry-led or hybrid: In contrast to regions such as the United States and Singapore, where the industry has taken the lead, or India, which has adopted a hybrid approach, the Middle East and Africa (MEA) can adopt either an industry-led or a hybrid approach towards open banking. In a recent report by the MENA Fintech Association on Open Banking, almost half of the 18 central banks and monetary authorities in the AMF survey prioritise financial inclusion as their top priority for open banking, indicating a high demand for it.

ALINA BELEUTA CHIEF GROWTH OFFICER AT SALT EDGE

Over the past three years, the Middle East has seen an astonishing financial transformation, following innovative and exciting open banking frameworks across various countries in the area. Salt Edge aims to play an active role in the Middle East financial ecosystem.

By extending our operations in the region, we aim to build strong collaborations with regulators and financial institutions to contribute to an organic adoption of the open banking regulations and standards; these are the catalysts needed for transitioning from ad-hoc partnerships to exponential embedded finance products and services. In view of the extensively gained experience, working with an open banking pioneer can add huge value by helping prevent and eliminate obstacles from the get-go.

Salt Edge is a leading global open banking and open finance provider that builds API solutions and has all the tools and broad expertise to help banks and other financial players in the region with open finance compliance in one to three months, as well as assisting them to build the strategy beyond compliance, like the development of premium APIs and BaaS services.

The company's services extend beyond technical setup to help banks implement real-world use cases. From reducing banks’ credit risk by combining lending expertise with open banking-enabled data analytics to providing a more lucrative investing experience with faster onboarding, safer and faster top-ups, adding PFM features that increase customer loyalty, BFM solutions that provide real-time access to business accounts allowing automation of tracking, analysing, and managing finances, enabling more convenient, seamless payments, and creating tens of other use cases.

Despite low internet connectivity in sub-Saharan Africa (SSA), there is still potential for open finance, as evidenced by various partnerships and developments in the region. For example, in South Africa, the open finance platform trulD allows users to securely access consumer financial data from all major banks in the country. In Tanzania, NMB Bank launched the country's first fintech sandbox in October 2021, enabling fintechs to access banking APIs to make payments faster.

Similarly, in Morocco, CIH Bank has partnered with Finastra to digitise its services and enable customers to use their mobile app. However, there is still much to be done globally with open banking, including in advanced ecosystems such as the UK. For instance, while open banking offers benefits to customers, they need to be made aware of it in simplified terms and its advantages. Even in the UK, only 23 per cent of British consumers are happy for their financial information to be shared via an open banking model, according to ING research. Digital transformation presents its own issues and doubts, especially with big data and personal information, and challenges such as cybersecurity.

Nevertheless, since Q1 2020, Yapily has seen the number of open banking payments increase by 365 per cent on average every quarter, indicating a significant growth in payments made through open banking APIs. This exponential growth in payments made through open banking APIs is tangible proof from the market, and research predicts that over two-thirds (64 per cent) of UK adults will be adopters of open banking this year.

Regarding the benefits for financial institutions, the UK seems to have a more positive attitude towards open banking. Nearly 70% of financial institutions in the UK view open banking as an opportunity, and 70% have a clear strategy to realise its potential. For open banking to work in the MEA region, similar support from the industry, as seen in the UK, will be necessary. Additionally, partnerships between fintechs, financial institutions, and other players can help boost and justify the benefits of open banking. Therefore, fintechs need to make the benefits of their solutions clearer to promote collaboration and partnerships with financial institutions.

Open banking may appear complicated, but it can be developed through partnerships and collaboration between the government, private sector, and consumers, both in the MEA region and beyond. However, it will require a unique strategy and implementation that can work across the region. Nevertheless, it is a good step towards addressing the other topic in this subsection, embedded finance.

Embedded finance, the integration of financial services or tools within non-financial ecosystems, has potential both globally and in the MEA region. Banking-as-a-service (BaaS), the end-to-end model that allows for digital banks and other third-party players to connect with a bank's system via APIs, is gaining popularity globally and is also showing potential in the MEA region. In MEA, the BaaS market has grown by 45.3 per cent and is expected to be worth over $10billion this year ($10.359billion).

Globally, BaaS was estimated to represent a $7 trillion opportunity, according to Finastra's report, "Banking as a Service: Outlook 2022 | Paving the way for Embedded Finance." Consulting firm Bain has valued the transition to BaaS at $3.6trillion globally by 2030, not factoring in the transformation of wholesale banking

to embedded finance. Distributors such as e-commerce and other retailers are migrating towards BaaS solutions, and it is projected to exceed 70 per cent in the next three years. 60 to 70 per cent of distributors are also looking to increase their spending on financial partnerships such as BaaS. In the EMEA region, 49 per cent of senior executives are looking to expand their BaaS spending, which is higher than their counterparts in APAC or the Americas.

Tesla has embedded insurance in all its customers' purchases, allowing them to drive away without added hassles or paperwork. In the MEA region, similar implementations have occurred, to some extent. When it comes to examples of embedded finance in the MEA region, Emirates Airlines offers a ‘fly now, pay down the line’ programme in partnership with Emirates NBD, which allows customers to pay for their flights in three interest-free monthly instalments.

In Saudi Arabia, Arab National Bank provides BaaS services to its customers in partnership with Red Hat, an American open-source solutions provider. Wio Bank, a digital banking platform that launched at the end of last year, focuses on providing state-of-the-art digital banking apps for customers and embedding financial services in digital businesses, offering digital banking apps, embedded finance, and BaaS solutions.

In Africa, Nigeria-based unicorn Flutterwave has launched a fintech-as-a-service (FaaS) solution, which enables businesses to open accounts, complete KYC verification, receive payments, and manage their customers' accounts.

Globally, embedded finance is having one of the most significant impacts on people, with many taking the convenience of insurance from Tesla or Uber payments for granted. As noted earlier, partnerships are the primary approach to embedded finance in much of the world, including in the MEA region. Finally, it's worth noting that the embedded finance market's value is expected to exceed $7trillion globally in the next 10 years, according to Oracle.

8. LENDING

Lending is a significant topic, and its vast definition presents an opportunity for MEA. As previously highlighted, most individuals in the region do not have access to traditional financial services, including credit cards, mortgages, and other lending services. Similarly, for SMEs, obtaining loans for setting up or expanding businesses is a challenge due to the lack of a wider fintech ecosystem, including credit bureaus and regulations to support lending.

Additionally, access to loans for SMEs is a challenge, with a high percentage of funding requests being rejected by conventional banks, despite contributing 60 per cent of the UAE's GDP. Loans to SMEs account for only four per cent of the outstanding bank credit in the UAE, which is below the MENA average of 9.3 per cent.

As highlighted in Chapter Three, lending plays a significant role in the wider fintech context in MEA, with many fintechs in the region focusing on this subsector. In several countries, lending ranks among the top three fintech areas alongside payments, demonstrating its importance and adoption in the region.

Peer-to-peer (P2P) lending gained popularity globally during the 2008 Global Financial Crisis when traditional institutions clamped down on lending. While China and the USA accounted for 95 per cent of the P2P lending market in 2020, MENA also brought P2P lending

into the spotlight. The International Finance Corporation (IFC) estimates that the SME lending gap in MENA is approximately $210 to $240billion, with a formal MSME finance gap estimated at $160-180billion.

The International Finance Corporation (IFC) estimates that the SME lending gap in MENA is around $210 to $240billion, with the formal MSMEs finance gap estimated at $160 to $180billion.

The P2P lending craze in the MENA region started in Jordan in 2013 with Iiwwa, and Beehive in the UAE. Despite the lack of unified regulations across the region, these companies have taken innovative approaches through partnerships. Beehive, for example, partnered with banks to implement an SME lending white-label solution and grew its institutional lenders base, while Iiwwa partnered with institutional investors like local banks in Jordan and global debt institutions, and offered a credit analysis engine and credit-as-a-service to banks. Beehive is also the world’s first Sharia-compliant P2P platform.

Saudi Arabia is emerging as a growing hub for P2P, with its regulatory environment allowing for P2P to thrive better than most in MENA, and there are at least a dozen P2P lenders in the country, including Raqamyah and Lendo.

In Africa, at one point, Kenya and South Africa dominated the P2P market, with both combined controlling 90 per cent of the P2P market in the continent. Interestingly, at one point, 90 per cent of online alternative lending originated from platforms headquartered outside of the continent. In 2020, crowdfunding transactions in Africa were estimated at $26.9million, and crowdfunding in Africa is projected to reach 11,800 campaigns by 2024. SSA could potentially reach $2.5billion by 2025. However, the continent's underdeveloped but rapidly growing market represents just 0.1 per cent of the global market.

Globally, embedded finance is having one of the most significant impacts on people, with many taking the convenience of insurance from Tesla or Uber payments for granted

In the Middle East, crowdfunding is a relatively new concept, and limited rules exist. Eureeca.com is a player for equity investment, while Aflamnah.com and Zoomaal.com are for creative projects. The UAE government website states that fundraising for loans and investments, or debt-based funding, is a new concept, and currently applied on a narrow basis and yet to be regulated and introduced at a wider level. However, the Dubai Financial Services Authority (DFSA) recently launched a regulatory framework for loan and investment-based crowdfunding platforms, which is considered the first framework in GCC.

Israel has regulated P2P since 2017, according to the OECD. Additionally, the Israel Securities Authority enacted mass financing regulations for research and development companies and SMEs in March 2017, and later that year, the Finance Committee of the Knesset approved the Securities Authority to mass financing regulations for crowdfunding.

d.Enablers of fintech

The enablers of fintech in MEA are similar to those in other regions, including digital infrastructure such as artificial intelligence (AI), machine learning, blockchain, application programming interfaces (APIs), mobile devices, big data, cloud, and cybersecurity. People and talent are also important factors to consider. The current situation and its gaps

In MEA, digital infrastructure gaps are a significant challenge for fintech. Data centres, internet connectivity, and smart mobile devices are all necessary for the sector to thrive. For example, at one point, 80 per cent of data in Africa was held outside the continent due in part to a lack of infrastructure.

MEA is relatively new to digital transformation, but the global market is evolving rapidly with innovations in blockchain, AI, and the metaverse. Some MEA countries, such as Dubai, have launched their own blockchain and metaverse strategies to become world leaders in these areas.

However, the region still faces challenges in terms of talent and people with the necessary skillsets in coding and other aspects of fintech. Brain drain is also a significant issue, with many of the best and brightest leaving the region for other countries. This includes not only high-skilled workers but also future entrepreneurs who could have started their own companies in MEA but end up doing so in the United States, Europe, or Singapore.

ADDRESSING THE CHALLENGES

In Turkey, the first legislation on crowdfunding came into force on November 28, 2017, with an additional article in the Capital Markets Law requiring the approval of the Capital Markets Board of Turkey (CMB) for crowdfunding platforms.

In Africa, much of fintech has been centred around mobile phones, leading to solutions that are often referred to as mobile lending. East Africa, particularly Kenya, has seen significant growth in this area. Several African fintech companies have become superapps or megasolutions, expanding their offerings beyond paytech. For example, M-Pesa, which also offers lending through KCB M-Pesa Loan, a partnership between Safaricom and KCB bank launched in 2015. Other companies, such as MTN in neighbouring Uganda, have launched similar services. In 2022, MTN and JUMO partnered to launch MoSente, a credit facility for MTN customers. MTN has been offering something similar since 2016, called MoKash, and has partnered with Absa Bank and Tigo in Tanzania to increase the availability of its short-term credit product, Tigo Nivushe.

In addition to mobile lending, other fintech companies, such as Lulalend in South Africa, offer lending services. However, microfinance has great potential in the MEA region, particularly in Africa and the poorer parts of the Middle East. Nevertheless, there are challenges in terms of technical integration and financial literacy required to educate millions of people across MEA about debt and borrowing.

Governments across the region are having to address this and prioritise wider digital economic development, as highlighted earlier in the report, with much focus on various aspects of digital components. For instance, as highlighted in the previous version of this report, in Saudi Arabia, linked to Saudi Vision 2030, they have a national strategy just for AI called the National Strategy for Data & AI (NSDAI), aiming to be a global leader in the big data and AI space by 2030 and hopes that it will contribute at least 12 per cent to its GDP by then.

For example, as highlighted later in Chapter Three, last summer, Saudi Arabia even launched its fintech-specific strategy looking to boost the sector's overall contribution to GDP. Just this March, Qatar did the same. Back to AI, the UAE has its Artificial Intelligence Strategy 2031 – a commitment to ‘smart’, advocating the application and adoption of exponential technologies such as AI) to transform business, government and society.

Beyond the GCC, but within the Middle East region, examples of prioritisation in AI include countries like Egypt and Israel. Firstly, in Egypt, the government is looking to develop AI capabilities in several ways, including launching an AI faculty at Kafr El Sheikh University. Egypt aims to have 7.7 per cent of its GDP, or almost $43 billion, derived through AI by 2030.

Similarly, in 2021, Turkey launched its own AI strategy roadmap, whereby the country is aiming to have the AI ecosystem contribute

KEY FINTECH ENABLERS

It is worth noting that, as highlighted earlier with APIs, there is still much room for growth in MEA, particularly in the context of fintech. However, there are further opportunities for growth, especially with the global interest in open finance and its potential in a region that is relatively early-stage with its ideas, such as MEA.

In terms of talent, there has been a transformation, even in wealthy areas like the GCC where locals historically worked in the public sector. The private sector and setting up tech companies have become a priority in national economic development strategies. This is evident across the likes of Saudi Arabia and the UAE, where locals are increasingly working in the private sector and setting up their own businesses, instead of solely relying on FDI and expats.

five per cent towards the country's GDP by 2025 and also having 50,000 people working in the sector.

Infrastructure is slowly yet impactfully taking hold. In the African continent, the data centre market looks to reach $3billion by 2025 and estimated to have a CAGR of over 12 per cent. At present, South Africa holds the largest share of data centres, with its digital economy contributing six per cent to the total GDP. The country is also ranked 25th globally based on data centre density.

Compared to much of MEA, Nigeria has a relatively established market for data centres, with its top service providers including Netcom, MainOne, and Console Connect.

Another example of success is Israel, particularly in the field of cybersecurity. With an estimated 450 cybersecurity companies operating there, the country raised an impressive $8.84 billion in funding at its peak in 2021, which is triple the amount it raised in 2020, with $2.75billion. Notably, 40 per cent of the global cyber funding went to Israeli startups and companies.

In addition, efforts are underway across MEA to boost digital skills, in particular. This includes Digital Skills Africa, a non-profit company (NPC) established to reignite hope and address socio-economic transformation through digital empowerment. Moreover, large MNCs like Cisco have promised to educate 10 million people in digital and cybersecurity skills across EMEA over the next decade.

Therefore, despite not having as many fintechs, VC deals, or relatively innovative solutions as Europe, the US, or East Asia, MEA has a lot more happening that is coming into play. This ranges from educating the future generation to even building schools for them to do so, which poses challenges yet more impactful successes. Ultimately, this is aiming to bring financial inclusion at a large scale and digitalisation alongside it.

At present, with much of MEA catching up, the UAE, in particular, has already been a world leader in digitalisation. Generally, with wider digital transformation, it has made the UAE a leading hub in the Arab World as a whole and also globally, where, for instance, the IMD World Digital Competitiveness

Ranking 2022 ranked the UAE at 12th globally, the highest MEA country. To note, neighbour Qatar, which has similarly been investing a lot in its future digital infrastructure, was the second-highest MEA country at 18th place globally.

Paytech, money transfer & remittances

Wealthtech & investing Gametech Digital & neobanks

Insurtech Regtech Lending Open & embedded finance

Digital currencies (i.e. cryptocurrencies)

Mobile devices Big data & cloud Cybersecurity

Blockchain Application programming interface (API)

Artificial intelligence (AI) & machine learning

e. Wider fintech ecosystem

he following is not unique to MEA, but rather what one would expect in the wider fintech ecosystem. However, this section will provide an overview of the key parts of the wider ecosystem (and later in Chapter Three, the key ones in each of the fintech hubs highlighted):

Public Sector (i.e., Central Bank, Free Zones, and Financial Centre Authorities) – Chapter Three will highlight each of the fintech hub's central banks. Still, as a whole, much of MEA has its various central banks and other authorities that monitor the wider fintech landscape – from securities exchanges to regulations, to name a few.

Unique, at least very visible in parts of MEA, has been the strong influence of special economic zones (free zones that allow for investors favourable tax and other benefits) that have played a significant role in the region's economic development. The most visible ones are the likes of Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) – both are special economic zones that have helped bolster the UAE's wider financial services and fintech offerings.

Media (fintech media) – There has been a notable increase in fintech media, both from non-MEA regions, as well as MEA ones that discuss the topic of fintech regularly. In addition, there has been a growing number of MEA media outlets that focus on tech, mainly fintech. For instance, key ones in the African continent include Nigeria-headquartered Big Cabel Media and South African Disrupt Africa. In MENA, they include the likes of Magnitt based in Dubai (which is more of a quasi-research firm with aspects of media).

Large global fintech media outlets, such as the publisher of this report The Fintech Times, headquartered in London and established since 2016, have been actively reporting on the MEA region since 2020, becoming one of its most active sections in terms of content and viewership.

Academia (degrees on fintech) – There has been a global increase and interest in the topic of fintech and the wider digital sphere across academia – from reports published on it to courses,

certificates, and even degrees taught on it. From a publishing point of view, this has seen the likes of the Milken Institute publish reports on fintech in the Middle East and North Africa. Academia teaches courses on the wider topic of fintech and key aspects affecting it, like digital entrepreneurship, to name a few. Universities in MEA that have been teaching this topic across some of their curricula include the likes of Lagos Business School in Nigeria to various universities in the UAE offering Masters degrees in AI and/or machine learning, including Mohamed bin Zayed University and Ajman University.

Financial and other traditional institutions (i.e. telecoms, remittance transfers) – Financial institutions and other traditional institutions, such as telecoms and remittance transfers, play a significant role in the wider fintech ecosystem in MEA. As discussed in Chapter One, both MEA-founded and non-MEA MNCs have a presence in the region, and this includes large telecoms like STC and Etisalat in MENA, and MTN and Orange in Africa. Remittance transfer brands like Western Union and MoneyGram, as well as local brands such as Al Fardan Exchange, also play a strong role in MEA.

Accelerators and incubators – Accelerators and incubators are also essential components of the fintech ecosystem in MEA. In 2019, Africa had at least 618 hubs, with Nigeria, Kenya, Egypt, and South Africa having the largest number of different types of accelerators, incubators, and co-working spaces. In MENA, examples of these include Flat6Labs and Astrolabs, among others. With the region's prioritisation of entrepreneurship and economic transformations, accelerators and incubators are playing an even more critical role in transforming the region.

Regarding fintech, many accelerators and incubators in the Gulf region serve as catalysts and also have their accelerator and incubator programmes. Some of these include DIFC’s Fintech

Hive in Dubai, Hub71 in Abu Dhabi’s ADGM (which has a wider startup focus), Bahrain FintechBay, Fintech Saudi, and Qatar Fintech Hub (QFTH).

Finally, venture capitalists (VCs) are also an essential component of the fintech ecosystem in MEA, and their numbers are growing. MEA-based and/or focused VCs, such as Wamda Capital, Raed Ventures, and Jabbar in the Middle East, and Partech and Vantage Capital in Africa, are examples. Other components, such as mentors, are also provided by accelerators and incubators or are part of the wider ecosystem.

Advisory (consultants) – Given the nature of overall economic development reforms, which most (if not all) had some/all input across different consultancies, especially the big and famous management consulting firms like the MBB types (McKinsey, Bain, Boston Consulting Group) or the Big 4 (EY, Deloitte, KPMG and PwC) to more niche firms and, beyond just management consulting strategy and implementation work, other advisors – from construction and engineering (especially with digital infrastructure) to IT to other aspects that affect the economy. It is big business in countries like Saudi Arabia that are seeing massive changes, and in fintech, as it is very much in its infancy relative to other parts of the world – from government strategies and implementations of them to private sector financial institutions having to adopt and accelerate digital transformation – consulting, both direct and indirect to fintech, is impacting much of MEA, such as in the rich-cash regions of the GCC in particular.

Legal (fintech lawyers) – the increasing requirements of regulatory technology, as highlighted earlier to just wider doing business in X country’ – whether it be fintech-related or not, the legal requirements of a business are important, and this pertains to MEA. There are various firms from non-MEA and also local ones catering to the ever-growing increase of digitisation and fintech playing a part in that. It has seen lawyers who have growing expertise/experience in that realm and can help navigate the various day-to-day and other potential challenges either a business or entity might face.

Fintech catalysts and associations – whether set up as purely government or semi-government or inspired by government initiatives, coupled with the likes of fintech associations that have popped up across MEA, the region has seen various aspects both coming directly and indirectly as a result of national pushes for a strong fintech ecosystem. For instance, various fintech associations are around the African continent (later in Chapter Three, they will be highlighted), and much are under an umbrella called the Africa Fintech Network (AFN).

In MENA, there are also fintech associations and also notably fintech catalysts mainly coming from the top – such as the creation of Fintech Saudi to boost the sector in the Kingdom of Saudi Arabia.

Other private companies and fintechs – other non-mentioned private companies not mentioned earlier – from the likes of healthcare with private hospitals to the agriculture business with farms and logistics – are increasing in MEA in terms of the need for fintechs or at least digital solutions, which can include fintech. And for the other end, the fintechs themselves – whether they are native-born MEA fintechs or those from outside the region looking to cater to the ecosystem, the private sector as a whole is ever-changing across the region.

Fintech events and conferences – there has been an ever-growing number of (mostly smaller) events and trade shows that are talking about fintech in the region. To not mention any specific ones, they tend to either encompass the broader topic of fintech or digital and/or various topics within it – from open finance/banking to payments to cryptocurrencies to enablers like AI. In terms of wider tech, there, of course, are a wide range of offerings – from the likes of GITEX in Dubai to the ever-growing LEAP in Riyadh, Saudi Arabia, to name a few.

As fintech further evolves, so too will its wider fintech ecosystem that is helping further accelerate and innovate its growth, and in today’s world where the global economy is a bit uncertain with its potential challenges.

THE DIRECT AND INDIRECT PLAYERS OF THE FINTECH AND WIDER DIGITAL ECOSYSTEM

Source:: Richie Santosdiaz

f.The key takeaways

he fintech landscape in the MEA region is as diverse as the region itself. While there are similarities across the vast region, it is still relatively in its infancy compared to other parts of the world, notably the developed world. However, given that the majority of the population is financially excluded and many areas lack even basic infrastructure, there have been significant advances in the region that have impacted not just fintech, but also wider economic development.

OVERVIEW OF FINTECH IN MEA

■ The fintech landscape in MEA is diverse, with an estimated 3,000 fintech solutions in the region and 26,000 globally

■ While fintech is making a significant impact on the GDPs of some countries in the region, ongoing global economic challenges pose challenges for further growth

■ Fintech activity in MEA is concentrated in certain areas, including Israel, the big four African countries (Nigeria, Kenya, Egypt, and South Africa), Turkey, and the GCC countries, particularly the UAE and Saudi Arabia which are increasingly taking a leading role. Chapter Three will provide further elaboration on these trends

PAYMENTS, MONEY TRANSFERS AND REMITTANCES

■ One of the most prominent displays of fintech in MEA is in the area of payments, money transfers, and remittances, given the current economic activity where many people are unbanked but have access to mobile phones. Remittances play a significant role in the region.

■ Despite challenges and playing catch up, MEA has been at the forefront of advancements in this subsector, as evidenced by the popularity of mobile money in Kenya.

OTHER: NON-PAYMENTS, MONEY TRANSFERS AND REMITTANCES

■ Digital, challenger and neobanks – some parts of MEA are showing potential in these sectors. For example, Tyme Bank in South Africa is expanding outside the region

■ Gametech – the young and mobile-savvy population in the region shows significant potential. Turkey is a leading country globally for game development

■ Regtech –given the relatively smaller scale of regtech globally, it has potential to grow in a region like ME

■ Wealthtech – the region has some of the richest people on Earth but also a large and growing middle class and the region has some of the richest people on Earth, as well as a large and growing middle class and working class. Financial inclusion via savings and wealth development and management has strong potential

■ Digital currencies and cryptocurrencies – despite recent negative press in many parts of MEA, digital currencies and cryptocurrencies are a necessity given their various economic situation.

■ Open finance – this sector is relatively new in the region but has been led via a mix of government-led initiatives (notably in Saudi Arabia and Bahrain) and market demand. For example, six South African banks have adopted open banking

■ Lending – part of wider financial inclusion efforts in the region. In some African countries, various fintechs have become superapps that expand beyond their traditional offerings (such as payments) to offer lending

■ Insurtech – historically underinsured, MEA's financial inclusion initiatives can increase access to insurance, and its digitalisation presents a large market for the future.

ENABLERS OF FINTECH

■ Despite the relatively underdeveloped digital infrastructure in parts of MEA, the region has shown potential for fintech growth, especially given the widespread use of mobile devices

■ Government strategies in MEA are starting to prioritise emerging technologies such as AI, big data, and blockchain, with investments in infrastructure and talent development expected to support the fintech sector in the future

WIDER FINTECH ECOSYSTEM

■ While there are similarities in key components of the fintech ecosystem across the world, MEA is developing its own unique ecosystem to support fintech growth

■ The growth of the wider fintech ecosystem in MEA is helping the sector continue to evolve and grow, even in challenging economic times

■ Chapter Three will provide an overview of key fintech hubs in the MEA region, highlighting the growth and development of fintech in these areas.

THE ANNUAL GUIDE TO THE MOST INFLUENTIAL, INNOVATIVE COMPANIES AND POWERFUL FIGURES WITHIN THE FINTECH INDUSTRY

Chapter Three Fintech hubs of MEA

Chapter Three delves deeper into the Middle East and Africa region by analysing key fintech markets and confirming information, reports, and other research. This section builds upon The Fintech Times' first-ever research from last year and identifies key fintech markets in the region from 2023, aligned with current research and reports. These markets will be ranked as early-stage, emerging, and premier players based on their overall fintech potential in a wider economic development lens, as per last year's report via a tier-three system.

This report's assessment is unique because it takes into account the current MEA economic development context, which is crucial for any sector to thrive and grow. MEA is particularly unique because economic development diversification and transformations are happening in the region. As highlighted in the previous chapter, regions such as the GCC have begun implementing strategies to prepare for a future without oil and embrace digital tools such as fintech. In Africa, many countries have implemented their strategies to reduce poverty through collaborations with global institutions such as the UN and World Bank and to diversify their economies.

1. SELECTION OF COUNTRIES IN MEA – THE METHODOLOGY OF THE ‘23’

The MEA region comprises over 70 countries, and this report focuses on a sample of key countries and analyses their fintech ecosystems.

Based on an initial pre-filtration through The Fintech Times' Middle East and Africa section coverage, coupled with available primary and secondary data, we assessed the MEA region, narrowing the list to 22 countries for the first report in 2021. Ethiopia was added in 2022, making the total number of countries 23.

For this edition (future editions would consider other countries such as Dem. Republic of the Congo, Algeria, to name a few), the same 23 countries were selected. We looked at known fintech activity, overall wider advancements from an economic development perspective (specifically with relation to wider tech and fintech-specific), as well as general highlights from reports that are currently out and various consultancies that have covered either the Arab World, Middle East and North Africa (MENA), or Sub-Saharan Africa (SSA), including Israel and Turkey. In alphabetical order, they are:

■ Middle East and Turkey (Middle East and North Africa and Turkey): Bahrain, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Turkey, United Arab Emirates (UAE)

■ Africa: Egypt, Ethiopia, Ghana, Kenya, Mauritius, Morocco, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Tunisia, Uganda.

After the initial pre-filtration, the selected countries were further evaluated and ranked based on the following criteria:

■ Economic development: This criterion assessed the overall health, prosperity, and advancement of the economy in question.

■ Economic development related to digital and fintech: This criterion evaluated the advancement of digital and tech ecosystems in the country, with a focus on understanding the fintech landscape in the territory

GATHERING DATA

To confirm and rank the selected MEA countries, various indicators were applied that factored in either one or both of the two main themes previously mentioned. These indicators were:

INDICATOR THEME ONE: ECONOMIC DEVELOPMENT – ECONOMIC & SOCIAL

A sample of economic and social indicators were used to understand the chosen MEA countries. The total score was weighted at 50 per cent overall. The following indicators were considered:

Gross domestic product (GDP) per capita: This indicator helped determine the overall standard of living based on economic output. The higher the GDP per capita, the higher the score.

Higher education enrolment: This indicator assessed human capital by considering the number of collegeeducated people in the country. For a highly skilled sector such as fintech, understanding the college-educated population is a strong indicator. The higher the number based on population ratio, the higher the score.

Entrepreneurship: This indicator looked at the number of ambitious people starting businesses in the country. Available public data from the Global Entrepreneurship and Development Institute 2019-20 report was used, with a score of 0 to 100, with 100 being the highest.

Ease of doing business: This indicator evaluated the overall ease of conducting business in the country. The higher the ranking, the more appealing it is for investors. The baseline of a World Bank Doing Business Report was used, whereby it was given a score of 0 to 100, with 100 being the highest.

Population: This indicator helped determine the size of the country. The larger the population, the higher the score.

Human development index (HDI): For a comprehensive evaluation of any economy, merely looking at economic figures isn't enough. Therefore, the Human Development Index was factored in using public data from the United Nations Development Programme (UNDP) 2020 Human Development statistics. The score ranges from 0 to 1, with 1 being the highest possible human development score.

INDICATOR THEME TWO: ECONOMIC DEVELOPMENT – TECH, DIGITAL & FINTECH

The following sample data of the tech and digital ecosystem as well as fintech-specific data were gathered to determine the score. Tech and digital received a total weight of 20 per cent, while fintech received 30 per cent.

ECONOMIC DEVELOPMENT – TECH & DIGITAL ECOSYSTEM

123 Number of startups – this indicator measures the number of startups based in the country and determines the overall ecosystem of tech and entrepreneurship strength. The higher the number, the higher the score.

Number of tech/startups (factoring in population): This indicator takes into account the number of tech/ startup companies per person and provides a holistic approach. The lower the number per person, the higher the score.

VC deals – This indicator measures the number of VC deals done in the ecosystem, showcasing investment activity that plays a key role in fintech

2. ECONOMIC DEVELOPMENT: FINTECH

Regulatory sandbox – This indicator shows how advanced and sophisticated the offering is for fintechs to promote and grow their innovations. If the country has a regulatory sandbox in place, it gets the highest score.

Unicorns – This indicator shows whether there are unicorns in the country to help fintechs and wider tech companies reach unicorn status. It also shows that the ecosystem has investors at that level of funding. The higher the number, the higher the score.

Number of fintech companies – Similar to the tech/startup indicator, this measures the number of fintech companies in the country and determines the strength of the fintech ecosystem with respect to companies. The higher the number, the higher the score.

123 Number of fintech companies (factoring in population) – This indicator takes into account the number of fintechs per person and provides a holistic approach. The lower the number per person, the higher the score.

INDICATOR BONUS SCORE (KNOWN) ECONOMIC DEVELOPMENT STRATEGY

A bonus score has been incorporated into the mix. If a country has a wider national economic strategic plan in place that includes promoting its wider digital transformation, the overall score gets an additional 0.25 points on the final score. This shows the country has a clear framework, effort, and vision to promote sectors like fintech.

SCORING MECHANISM AND SUMMARISATION OF THE FINTECH TIER CATEGORIES

A 10-point scoring system was used to evaluate the countries based on various economic development indicators, with 1 being the lowest and 10 being the highest score. The countries were then divided into three-tier categories based on their fintech ecosystem activity.

■ Premier Global Hub (Tier-One): Countries that received an overall high score from 8 to 10, due to their exceptional performance across various indicators under the three themes.

■ Emerging Hub (Tier-Two): Countries that scored from 4 to 7.99 and were noted for their overall initiatives and future aspirations in the fintech industry. Within this tier, there are sub-ranks based on scores, with 7-7.99 being highly-ranked emerging hubs, 5-6.99 as middle emerging hubs, and 4-4.99 as lower-end emerging hubs.

■ Early Stage Developing (Tier-Three): Countries that scored under 3.99 and are in their infancy stage in terms of fintech development. These countries have the potential to increase their fintech ecosystem ranking with time, investment, and dedication. Countries with a score from 3-3.99 would be on the higher-end ‘market to watch’ list.

It is important to note that not every country in the MEA region was analysed due to limitations in available data and knowledge of the MEA fintech space. However, the exercise provides a quantifiable categorisation that factors in various economic development indicators for a Tier-Three ranking of various fintech hubs in MEA. The ranking is not intended to be a competition among countries, but rather an assessment of each country's current state in terms of economic development as a whole, and in the context of both tech and fintech-specific development, based on the explained methodology. The research places emphasis on the placement of countries in the tier categories rather than their individual scores. Details of the scoring results can be found in the appendix. It is important to note that the data used in this report is publicly available as of March 2023 and, in some cases, the most accurate data available was used. However, there may be limitations due to unavailability or unbalanced data resulting from the effects of Covid-19.

FINDINGS: RESULTS

This report presents the findings of a study conducted in a similar manner to last year's first edition. Based on the analysis, the report highlights the following results:

TOTAL WEIGHT SCORE 2023

■ Tier-One 'Premier Global Fintech Hubs' – Israel and UAE

■ Tier-Two 'Emerging Fintech Hubs'

– Higher-level – Saudi Arabia and Turkey

– Middle-range – Bahrain, Qatar, Kuwait, Nigeria, Egypt, Kenya, Mauritius, South Africa, Jordan, Oman, Tunisia

– Lower-level – Lebanon, Ghana

■ Tier-Three 'Early-Stage Fintech Hubs'

– Higher-level 'Markets to Watch'

Morocco, Rwanda, Senegal, Uganda

– The rest – Ethiopia, Tanzania

TIER-ONE PREMIER GLOBAL FINTECH HUBS – ISRAEL AND UAE

Israel and the UAE once again emerged as the top-tier fintech hubs in this year's report, reaffirming their status as leaders in the industry. Their high scores can be attributed to several factors they share in common:

■ Entrepreneurial and business-friendly environment

– Both countries have a thriving startup culture, with a large number of fintech and tech companies. The UAE, in particular, has over half of the fintechs in the MENA region (excluding Israel and Turkey), and Israel alone has more fintech unicorns than the rest of MENA combined.

■ Major commercial, financial, and tech hubs – Both countries boast of major hubs in other related sectors, with Tel Aviv in Israel being a hotbed of innovation, and the UAE home to Dubai and Abu Dhabi. The economies of both countries are highly diversified, with the services industry contributing significantly to their GDP.

■ Strong developed economies – Israel and the UAE are both developed economies with a high standard of living, which has attracted top talent from across the globe.

■ Innovation-friendly policies – Both governments have placed a strong emphasis on fostering innovation, with Israel investing heavily in R&D, and the UAE envisioning a future driven by blockchain and the metaverse.

In order to maintain their status as top-tier fintech hubs, both countries need to continue to innovate and develop their ecosystems. Israel has already shown promising signs in this regard by retaining its talent and becoming a hub for R&D. On the other hand, the UAE needs to focus on nurturing more homegrown entrepreneurs, creating an environment that fosters scaling up, and producing the first fintech unicorn. Additionally, the competition from other countries in the region that are also striving to become fintech hubs will keep the pressure on the UAE to keep evolving.

TIER TWO 'EMERGING FINTECH HUBS'

The Tier-Two emerging fintech hubs range from the lower-end scores to the higher-end scores. The countries that appear on this list are generally not surprising, encompassing the rest of the GCC, Saudi Arabia, Turkey, Africa's Big Four fintech players, and also Mauritius, Ghana, Tunisia, Jordan, and Lebanon, which have historically been major producers of innovation and contributors to the ecosystem. The Tier-Two category shares similar characteristics:

■ Adopting pro-business policies – Many on this list are in the process of converting their economies to be more business-friendly to attract more FDI and increase entrepreneurship in their jurisdiction, guided by various economic development strategies.

■ Government aspirations with fintech in mind – Many on this list see fintech as a strong driver of current and future economic development, which can bring prosperity to their GDPs and overall quality of life.

■ Large populations or small ones with outward vision – Many on this list have large populations with a regional presence, such as the Big Four in Africa, Turkey, and Saudi Arabia. Some, such as Lebanon and Mauritius, have been outward-looking with respect to their manpower and economic growth, despite their smaller population sizes.

■ Advanced or middle or high-income economies – The countries on this list are either developed economies, such as the Gulf countries, high-income economies like Turkey, or middle-income economies like the rest

■ Historical financial or commercial hubs –Some on this list, such as Bahrain, Kuwait, and Lebanon, as well as in Africa with South Africa or Turkey, have historically played strong roles in their financial or commercial hubs in the MEA and global economies.

Source: Richie Santosdiaz and The Fintech Times

■ Entrepreneurial – Some of the countries on this list, notably Lebanon, still have a very entrepreneurial spirit that contributes to the wider tech ecosystem. Nairobi with its Silicon Savannah, Cape Town, Lagos, and Istanbul are also creating and contributing to the tech ecosystem.

Apart from Lebanon, the future of those on this list looks bright regarding fintech. However, Turkey's Lira devaluation could see future issues that could impact its fintech industry.

With Saudi Arabia investing heavily in its wider Saudi Vision 2030, it could achieve a Tier-One status soon with the metrics of this particular report in its current form.

Furthermore, the African countries like the Big Four (Egypt, Kenya, Nigeria, and South Africa) will continue to drive much of the fintech growth on the continent, while emerging players like Mauritius, Ghana, and Tunisia will contribute further and take a share of the pie.

TIER-THREE 'EARLY-STAGE FINTECH HUBS'

The remaining countries on the list are considered Tier-Three, and they share similar characteristics:

■ Middle or lower-middle income or low-income countries

– The economies of these countries are generally middle-income, lower-middle income, or low-income. The lack of technology and accessibility in these countries limits innovation in fintech or makes it completely inaccessible.

■ Lack of fintech-specific and financial services derivatives or infants – Some countries on the list have fintech-specific derivatives or aspirations for financial services, but these sectors

are still in their infancy compared to much of the world. For example, the Casablanca Financial Centre or Kigali Financial Centre aims to transform and diversify their respective countries of Morocco and Rwanda, but many other countries on this list lack a specific vision and implementation to drive fintech forward, particularly Ethiopia and Tanzania, which ranked lower than the others.

■ Aspirational with the future economy – Despite the challenges faced by these countries, they have aspirations to convert their income status in the long-term and use tech and digital to alleviate poverty.

Finally, some of the ‘Markets to Watch’, particularly Rwanda, may become Tier-Two fintech hubs in the future if their growth trajectory continues.

B. COUNTRY ECONOMIC AND FINTECH BREAKDOWN LANDSCAPES

The following will now highlight each of the 23 countries in alphabetical order (starting with the Kingdom of Bahrain and ending with the UAE) that were selected for this chapter. Each country section will highlight the following:

■ Country overview – specifically related to fintech and wider digital

■ Figures used to calculate their fintech hub status:

■ Wider economic development indicators

■ Digital and tech indicators

■ Fintech-specific indicators

■ Fintech sub-sector /or fintech usage (if available)

PREMIER GLOBAL FINTECH HUB (TIER ONE) ISRAEL AND THE UAE (SCORES OF 8 AND HIGHER)

EMERGING FINTECH HUBS (TIER TWO)

HIGH LEVEL: SAUDI ARABIA AND TURKEY (SCORES OF 7-7.99)

MIDDLE LEVEL: BAHRAIN, QATAR, KUWAIT, NIGERIA, EGYPT, MAURITIUS, SOUTH AFRICA, KENYA, JORDAN, OMAN, TUNISIA (SCORES OF 5-6.99)

EARLY LEVEL: LEBANON AND GHANA (SCORES OF 4-4.99)

EARLY-STAGE FINTECH HUBS (TIER THREE)

HIGH LEVEL: MARKETS TO WATCH: MOROCCO, RWANDA, SENEGAL AND UGANDA (ALL SCORED AT LEAST BETWEEN 3-3.99)

THE REST: ETHIOPIA AND TANZANIA (COUNTRIES IN THE STUDY THAT HAD SCORES FROM 0-2.99)

Source: The Fintech Times and various; prefiltration (due to nearly 70 countries in MEA) was done based on available data and expert opinion. Later the chosen countries were scored through three wider indicator themes (wider economic development, digital and wider tech and fintech-specific).

Premier Fintech Hub (Tier-One) – leading hubs in MEA for fintech as a whole; plays strong impact globally; stable and sophisticated fintech landscape Emerging Fintech Hub (Tier-Two) – strong commitment and desire to further solidify their fintech ecosystem; strong investments either at government level or organically is underway Early-Stage Fintech Hub (Tier-Three) – overall infancy in fintech ecosystem yet for those in the higher ranking (ones to watch-top scorers) show potential to be in the emerging category one day

G DOM OF BAHRAIN

KEY ORGANISATIONS

■ Bahrain Economic Development Board (EDB) – the country’s investment promotion agency

■ Bahrain Fintech Bay – the first and largest fintech hub in the Middle East and main fintech catalyst

■ Al Waha Fund of Funds – a $100million venture capital fund that provides funding access to Bahrain’s startup industry.

■ Women in Fintech Bahrain (WIFBH) – an initiative to raise awareness of women’s role in fintech in Bahrain

■ Tamkeen – a semi-autonomous government agency providing assistance and training to private-sector businesses and individuals, and to promote development of that sector

■ Central Bank of Bahrain (CBB) – the Kingdom’s central bank. Since 2002, the CBB has been the single regulator and source for governance in the financial sector

CAPITAL & FINANCIAL HUB Manama (ranked globally 84th)

KEY ECONOMIC DEVELOPMENT STRATEGY Bahrain Economic Vision 2030

ECONOMIC OVERVIEW Despite its small size (it is a mere 765.3 square km), the Kingdom’s business and expat-friendly approach, coupled with its pro-regulatory approach, has made it a leader in economic diversification and development in the region.

Bahrain is a historical financial services hub with 364 licensed financial institutions as of December 2022, representing a mix of international, regional, and local names. As of September 2022, the financial services sector accounts for over 16.8 percent of Bahrain's GDP, representing one of its most important non-oil sectors. The financial sector is also one of Bahrain's largest employing sectors, with Bahrainis representing over 66 percent of the sector's workforce, which employed 13,697 people in 2021. As of November 2022, the total balance sheet of the banking system was $222.2billion.

almost eight investing entities actively investing in fintechs.

Driven by the pandemic, the Kingdom has seen potential and demand for fintechs. For example, payments in CBB's The Digital Payment Landscape Report 2022 highlighted that point of sale (POS) transactions in 2021 were 125.5 million, with 65.6 per cent being contactless, valued at 3.2 billion Bahraini Dinars, and 39.8 per cent being contact-based. BenefitPay, a mobile application that enables safe, secure, and seamless financial transactions without the use of cash or plastic cards, saw total transactions of 209 million and 861,000 BenefitPay users in 2021.

Retail banking had the highest adoption and/or disruption at 68 per cent, followed by telecoms at 41 per cent and corporate banking at 40 per cent. An example of Bahrain's attraction of foreign direct investment (FDI) in the sector is the launch of Binance.bh earlier this year, which is significant given the downturn and 'troubles' the cryptocurrency sector has faced globally.

BREAKDOWN OF SECTOR

Fintechs in Bahrain (sample of 71 fintechs)

■ Payments, transfers & remittances (27)

■ Digital banks & banking platforms (5)

■ Cybersecurity & regtech (4)

■ Other (11)

EXAMPLE OF FINTECHS

■ Blockchain & crypto assets (8)

■ Banking solutions (4)

■ Alternative lending & crowdfunding (5)

■ Rain - a licensed crypto platform and custodian with a presence across the Middle East region

FINTECH OVERVIEW

Bahrain fintechs specialise in payments and crypto. The Central Bank of Bahrain (CBB) has introduced several new regulatory reforms and policies, including those for crypto assets, digital financial advice, crowdfunding, open banking, and the e-KYC framework. The ecosystem boasts more than 19 incubators and accelerators, with

1,481,104 Population in millions

■ CoinMENA – a Sharia-compliant digital asset trading platform with a licence from the CBB as a digital asset operator

■ Aion Digital - provides digital banking platforms for the banking and financial services industries

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB - TIER TWO (HIGHER-END) CATEGORY

2

KEY ORGANISATIONS

REPUBLIC OF EGYPT

■ Central Bank of Egypt (CBE) – the central bank and monetary authority of Egypt

■ Fintech Egypt – a unified platform to foster and connect all Fintech ecosystem stakeholders

■ Egyptian Fintech Association – a nonprofit and nonpolitical organisation for fintech

■ Insurance Federation of Egypt – a consortium of insurance companies, reinsurance and insurance associations licensed to operate in the country

■ Financial Regulatory Authority (FRA) – a financial regulatory authority that regulates the financial service industry

■ Ministry of International Cooperation – Ministry in charge of economic cooperation and development between Egypt and the rest of the world

CAPITAL & FINANCIAL HUB Cairo

KEY ECONOMIC DEVELOPMENT STRATEGY Egypt Vision 2030

ECONOMIC OVERVIEW Egypt is a large country uniquely positioned in both the Middle East and Africa, much like other North African countries such as Morocco, Tunisia, and Algeria. However, unlike its wealthy Gulf Cooperation Council (GCC) counterparts and other African nations that rely on oil and gas, Egypt's more limited resources have shifted the focus towards its historical relics (i.e., tourism) and the Suez Canal, which significantly contributes to international trade and the country's economy.

Given Egypt's low-middle income status and the sheer number of its population, it is unsurprising that the country ranks in the top five globally for remittances. Additionally, with two-thirds of the population remaining unbanked, there are opportunities for financial services, particularly fintech, to address financial inclusion.

In November of last year, the Central Bank of Egypt launched its Financial Inclusion Strategy 2022-2025, a national development plan that aims to expand access to financial services, promote financial literacy, and introduce innovative financial products for consumers and micro, small, and mediumsized enterprises (MSMEs). This aligns with Egypt Vision 2030's wider economic development strategy, in which financial inclusion plays a significant role.

112,109,994 Population in millions

FINTECH OVERVIEW Egypt

is proud to hold the title of producing the first unicorn fintech in the Arab world, Fawry, and its second with fintech MTN-Halan in early 2023. It's worth noting that only Saudi Arabia in the region, not counting Israel and Turkey, also boasts a fintech unicorn. Despite being behind compared to the rest of the world, Egypt's success thus far is notable.

In 2014, the country had only two fintech startups, which ballooned to 112 by 2021. According to Fintech Egypt, the first half of last year witnessed a 12-fold increase in fintech and fintech-enabled investments compared to 2017, reaching an all-time high of nearly $167million in 31 deals (as of H1 2022). Of those deals, five had investments totalling $10million or more.

Payments and remittances dominated those H1 2022 investments, accounting for 58 per cent of the total share, followed by lending and alternative finance with 26 per cent, wealth management and savings at 12 per cent, and the remaining funds going to other fintech sub-sectors (e.g., B2B marketplace, data analytics, insurtech, payroll and benefits, etc.).

BREAKDOWN OF SECTOR

Fintechs in Arab Republic of Egypt (sample of 89 Fintechs)

■ Payments and remittances (34)

■ Accounting and expense management (9)

■ Wealth management & savings (8)

EXAMPLE OF FINTECHS

■ Lending and alternative finance (15)

■ Payroll and benefits (9)

■ B2B marketing (6)

■ Paymob – provides a range of payment solutions and APIs

■ Dayra – provides virtual accounts, prepaid cards and micro loans to name a few

■ Kashat – provides micro loan solutions for businesses

OVERALL FINTECH HUB STATUS:

EMERGING FINTECH HUB - TIER TWO CATEGORY

38.9% Enrolled in higher education

60% Ease of doing business

25.9% Entrepreneurship GDP per capita $3,698.80

0.731 Human development index

 Wider economic development Further economic development, tech & fintech specific highlights 

199,484.0 Ratio of tech startups (per person)

562 Number of tech startups

147 Number of VC deals

112 Number of fintech companies

1,000,982.09

Ratio of fintech startups (per person)

Yes Regulatory sandbox

2 Unicorns (Fawry & MNT Halan)

Sultan Hassan Mosque and the cityscape of Cairo

World Trade Centre from Manama, Bahrain Bay Addis Ababa, the Ethiopian capital city

FED. DEMOCRATIC REP. OF ETHIOPIA 3

KEY ORGANISATIONS

■ National Bank of Ethiopia (NBE) – the central bank of the country

■ Association of Ethiopian Insurers (AEI) – the voice of the Ethiopian insurance industry

■ Ethiopian Health Insurance Agency – autonomous federal government organisation with the objective of implementing health insurance system in Ethiopia

■ Ministry of Innovation and Technology – government agency responsible for science and technological development in Ethiopia as well as a governing body of communications

■ Ethiopian Digital Transformation Program Association (DTEA) – an association that serves as a network and voice for the digital economy and entrepreneurs around Ethiopia

■ Ethiopian Youth Entrepreneurs Association – supports and empowers the entrepreneurial interests of its members and youth entrepreneurs in Ethiopia

■ Ethiopian Investment Commission – its mandate is to promote investments in the country

CAPITAL & FINANCIAL HUB Addis Ababa

KEY ECONOMIC DEVELOPMENT STRATEGY Ethiopia Digital Payments Strategy (EDPS), Digital Ethiopia 2025

ECONOMIC OVERVIEW Conflict and unrest in some parts of the country, coupled with a famine last year, have hindered Ethiopia's economic development. Nonetheless, the country's large population (second largest in Africa after Nigeria) presents opportunities, especially since the majority (65 per cent) remains unbanked.

Banks in Ethiopia have also embraced technology in recent years, as evidenced by their customers' use of mobile and internet banking. In 2019/20, transactions worth ETB15billion ($290million) were conducted using internet banking, up from ETB1.8billion ($25million) in 2017/18. Despite this, 98 per cent of transactions are still in cash, and over 80 per cent of Ethiopians still go to a bank to withdraw money.

FINTECH OVERVIEW Mobile money, which has transformed much of Africa by increasing financial inclusion, is still emerging but appears to be one of Ethiopia's most promising and fastest-

125,417,534 Population in millions

$925.10

growing fintech opportunities. Late last year, Ethiopia granted Safaricom Ethiopia a licence to operate M-Pesa mobile money services in the country after authorities revised laws to allow foreign investment in mobile money services. Until then, only Ethiopia's Ethio Telecom could offer its mobile money service, Telebirr.

BREAKDOWN OF SECTOR “Ethiopia’s fintech sector is dominated by payments solutions including mobile money. Out of a sample of nine fintech solutions from the country, nearly all of them, bar one, were in this sub-sector”

EXAMPLE OF FINTECHS

■ Kifiya – dedicated to improving people’s lives leveraging innovative digital solutions. It is helping build a sustainable livelihood through its cross-cutting products that are improving the lives of farmers, women, youth and MSMEs

■ ArifPay – Ethiopia’s first point of sale (POS) payment system operator with payment solutions for smartphones, POS and QR payment terminals. Arifpay also holds a licence to provide payment gateway solutions including utility bills, airtime top-up e-commerce and school fee processing

■ Hellocash – a mobile money service in Ethiopia provided by banks and microfinance institutions. HelloCash aims to bring financial services, such as deposits, withdrawals, transfers and payments, to users on their mobile phones

■ Telebirr – a mobile money service developed by Huawei that is owned and was launched by Ethio telecom, the state owned telecommunication and internet service provider in Ethiopia

■ Chapa – enables organisations and businesses to accept all possible local and international digital payment methods from anyone, anywhere in the world. Its payment APIs can be integrated into any existing digital platform

OVERALL FINTECH HUB STATUS:

EARLY-STAGE FINTECH HUB - TIER THREE CATEGORY

REPUBLIC OF GHANA 4

KEY ORGANISATIONS

■ Bank of Ghana – the central bank of the nation

■ Ghana Fintech and Payments Association (GFPA) – the foremost fintech hub and not-for-profit organisation established to promote the advancement of financial technologies and payment systems in Ghana

■ G hana Investment Promotion Centre (GIPC) – Ghana’s investment promotional agency

■ Security and Exchange Commission – regulates, innovates and promotes the growth and development of an efficient, fair and transparent securities market in which investors and the integrity of the market are protected

■ National Pensions Regulatory Authority (NPRA) – regulates and monitors the operations of the three-tier pension scheme and ensures effective administration of all pensions in the country

■ National Insurance Commission – ensures effective administration, supervision, regulation and control of the business of Insurance in Ghana.

■ Ministry of Communications and Digitalisation – the Authority promotes and ensures fair competition in the telecommunications industry. This includes implementing policy on competition within the remit of the Authority.

■ Ghana Investment Fund for Electronic Communications (GIFEC) – its mandate is to facilitate the provision of universal access to electronic communication by the unserved and underserved communities

CAPITAL & FINANCIAL HUB Accra

KEY ECONOMIC DEVELOPMENT STRATEGY

Ghana Vision 2020, Ghana Digital Agenda

ECONOMIC OVERVIEW Ghana is often revered as one of the more stable, democratic and prosperous countries in West Africa. Today, it is a young country, where over half (56 per cent) of the population is under 25 years old (as of 2020). Its urbanisation rate for Africa is quite high - nearly 60 per cent of the population lives in urban areas. It is also West Africa's second-largest economy after Nigeria. Given the relative prosperity compared to much of Africa, the country has been able to further accelerate its digital agenda via the Ghana Digital Agenda. This has included the National Identification Card (also

33,895,210 Population in millions

GDP per capita

$2,363.30

64,933.4 Ratio of tech startups (per person)

522 Number of tech startups

known as the Ghana Card), the Ghana E-Payment Portal (GEPP) and the Ghana Electronic Procurement System (GHANEPS).

18.69% Enrolled in higher education

24 Number of VC deals

522 Number of fintech companies

FINTECH OVERVIEW

Mobile money is popular in the country and contributes significantly to its fintech ecosystem. In fact, it is estimated that mobile money transactions in Ghana contribute over 80 per cent to the country's GDP. In 2021, there were 40.9 million registered mobile money accounts and 17.5 million active accounts. In general, Ghana's push for digitalisation has seen with it the rise of fintech. For instance, a study by AppsFlyer and Google highlighted that Ghana led the African continent in 2021/22 with respect to finance app installations, which saw the West African nation post a staggering 200 per cent spike in finance app installs. Following a successful pilot implementation, the Bank of Ghana launched its new Regulatory Sandbox last August, developed in collaboration with EMTECH Solutions. This forms part of the Bank's commitment to continuously evolve a conducive regulatory environment that fosters innovation, financial inclusion and financial stability.

BREAKDOWN OF SECTOR

Ghana’s estimated 100 fintechs are dominated by wider payment solutions; other non-payments include insurance, pensions, blockchain, security trading and assets management, agriculture, BNPL, loans and property.

EXAMPLE OF FINTECHS

■ Pennysmart – promoting financial Independence through automating savings while enjoying attractive interest rates.

■ Bitsika – an app that uses blockchain technology to instantly help users across Africa receive money from any part of the world, at no cost. The app allows users to create a virtual shopping card, which can be used for making payments on all online Visa card-accepting stores.

■ PaySail - a payroll service provider that helps employers to undertake the processes involved in paying their employees efficiently.

OVERALL FINTECH HUB STATUS:

EMERGING FINTECH HUB - TIER TWO (LOWER-END) CATEGORY

60% Ease of doing business

64,933.4 Ratio of fintech startups (per person)

21% Entrepreneurship

0.611 Human development index

0 Unicorns

KEY ORGANISATIONS

■ Bank of Israel – the central bank of Israel

■ Startup Nation Central – the prime connector and facilitator of Israeli innovation that boosts business growth and generates impact

■ Fintech-Aviv – mission is to help position Israel as the greatest financial technology ecosystem in the world

■ Israel Innovation Authority – the support arm of the Israeli government, charged with fostering the development of industrial research and development in the State of Israel

■ Fintech Ladies IL – a community that was formed for the empowerment of executive women in tech

■ The Capital Market, Insurance and Savings Authority – oversees financial services in the insurance, pension, and provident funds markets

■ Israel Insurance Association – voice to overall promote the wider insurance industry

FINANCIAL HUB Tel Aviv (Ranked 57th globally)

KEY ECONOMIC DEVELOPMENT STRATEGY Digital Israel

ECONOMIC OVERVIEW Israel is a global leader in terms of digital and tech innovation. Dubbed the 'Startup Nation', Israel has the highest number of startups per capita in the world, and despite the global slowdown last year, the tech industry in Israel enjoyed moderate success. The Israeli tech scene had many high points in 2021 and the first half of 2022, with Israeli startups alone raising $15.5billion in funding in the previous year. However, this amount is half of what was raised the year before, with cybersecurity taking the biggest hit.

On a positive note, seed investment into local startups increased, which was a highlight given the overall decline across other areas. OurCrowd was the most active Israeli VC company in 2022, investing in 84 startups, followed by Viola (all funds) with 47 rounds, and Pitango, which invested in 21 different start-ups. This information is according to the 2022 report by Start-Up Nation Central.

FINTECH OVERVIEW During quarter three last year, Israeli fintechs raised $585million across 22 deals, which was a 15 per cent drop from 2021 levels. As some of the world’s

9,127,177 Population in millions

most prominent fintech companies are Israelifounded or Israeli, the global economic slowdown, where even sectors like fintech have seen hiring freezes or layoffs, can be felt in headlines that link to Israel.

For instance, large companies like Pagaya made headlines when they announced they would lay off 20 per cent of their staff across their US and Israel offices, as well as Rapyd last year. While it was reported a while back with potential developments in fintech, such as a regulatory sandbox, it appears that this has yet to materialise.

Additionally, while Israel has led much of the sector globally, there remain missed opportunities, particularly as there are segments of the population, such as the ultra-Orthodox and Arab populations, who have been more financially excluded from the traditional economy as a whole.

BREAKDOWN OF SECTOR

Fintechs in Israel (percentage)

■ Trading & investment (22.8%)

■ Enterprise solutions (16.3%)

■ Insurtech (11.9%)

■ Other (5.9%)

EXAMPLE OF FINTECHS

■ Payment & money transfer (20.8%)

■ Anti-fraud, risk & compliance (13.4%)

■ Lending & finance (5)

■ Earnix – Global provider of intelligent insurance and banking operations through agile, composable and real-time solutions

■ Balance – a payments platform aimed at B2B merchants and marketplaces

■ Vestoo – the world's first marketplace for Life and P&C insurance-based risk transfer and investments

OVERALL FINTECH HUB STATUS: PREMIER GLOBAL HUB - TIER ONE CATEGORY

Amman, the capital of Jordan

Nairobi, the capital city of Kenya in East Africa Tel Aviv Towers in Israel

KEY ORGANISATIONS

■ Central Bank of Jordan (CBJ) – the Kingdom’s central bank

■ Ministry of Digital Economy and Entrepreneurship – the body responsible for setting policies and legislation to regulate the information technology, communications and postal sector

■ Jordan Association for Insurance Companies – was established in 1956 as the first Authority to act as a regulatory body for insurance affairs in Jordan.

■ Jordan Investment Commission – national investment promotional agency of the Kingdom

■ Jordan Payments & Clearing Company (JoPACC) – is the owner and operator of domestic micro and retail digital payment systems in the country, including CliQ for instant payments, JoMoPay for mobile wallets, and eFAWATEERcom

CAPITAL & FINANCIAL HUB Amman

KEY ECONOMIC DEVELOPMENT STRATEGY Jordan 2025

ECONOMIC OVERVIEW This landlocked country in the Middle East, although having limited resources compared to its neighbours, nonetheless has a diversified economy consisting of trade and finance, accounting for nearly a third of its GDP; transportation and communications, public utilities, and construction, representing one-fifth of total GDP; and mining and manufacturing, constituting nearly that proportion.

The country has a growing tech scene that witnessed a nearly 500 per cent growth in startup funding in 2021 compared to 2020. The country, while small, has a vibrant entrepreneurial scene. It is estimated that 27 percent of tech entrepreneurs in the MENA region are Jordanian, even though the country is only three per cent of the region's population. However, quite a few often leave the country for greener pastures.

Many Jordanians live abroad, and while no official numbers are released, it is estimated that at least 10 per cent of Jordanians live abroad; remittances play a large role in the country's GDP as well. Interestingly, the country also hosts millions of refugees, and many would, of course, be financially excluded.

FINTECH OVERVIEW The CBJ has been helping the sector when it can. This has included examples like creating a special lending window that gives banks the ability to re-lend low-cost funds from

11,321,642

the government to fintech and wider digital projects. This has also included, in partnership with the World Bank, a $100million IT fund that the Ministry of Planning and International Cooperation of Jordan provides support to 200 startups. In addition, to help with financial inclusion, whereby only a quarter of Jordanians have bank accounts, the government in 2013 launched JoMoPay, the Kingdom's national payments system to serve the unbanked and underbanked.

Through the country's National Financial Inclusion Strategy (NFIS), fintech has been highlighted as one of three key areas of focus for the country to achieve this.

In terms of refugees, there have been pilots to use digital payments, which include humanitarian transfers, to disburse cash to refugees through m-wallets. A pilot by GIZ and Zain Cash to distribute payments under the 'Cash for Work' program has been implemented in Fifa, Azraq, Dibeen, Ajloun, and Yarmouk. Under 2,000 workers (vulnerable Jordanians and refugees) benefited from the usage of m-wallets. Jordan's importance in being a home for refugees - historically mainly Palestinians and recently mainly Syrians - presents further opportunities where fintech can help the financially excluded refugees.

BREAKDOWN OF SECTOR

The market’s largest segment will be digital payments with a total transaction value of $6.3billion in 2022.

EXAMPLE OF FINTECHS

■ MadfooatCom – develops and operates real-time payment processing solutions and services with a clear determination and vision to enhance the digital payments scene and to contribute to the economy

■ Liwwa – connects small businesses in need of capital with people who want to invest; claims to be the first peer to peer lending platform in the MENA region.

■ MEPS – a regional payment service provider (PSP), catering to financial institutions, as well as retailers and corporations

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB - TIER TWO CATEGORY

KEY ORGANISATIONS

■ Central Bank of Kenya – the country’s central bank

■ Kenya Fintech Association (FINTAK) – first non-for-profit organisation representing leading fintechs within Kenya

■ Digital Lenders Association of Kenya – a new member organisation incorporated in 2019 bringing together the leading digital-first loan providers and associated stakeholders

■ Capital Markets Authority – is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.

■ Insurance Regulatory Authority – sole authority charged with regulation and supervision of the insurance industry within the Republic

■ Association of Kenya Insurers (AKI) – established in 1987 as an independent non-profit making consultative and advisory body for insurance industry

■ Nairobi International Financial Centre - a new business environment, established to make it easier and more attractive to invest and conduct financial services and related activities in and from Kenya

■ Kenya Investment Authority – the country’s investment promotional agency

CAPITAL & FINANCIAL HUB Nairobi (ranked 101st globally)

KEY ECONOMIC DEVELOPMENT STRATEGY

Kenya Vision 2030, National Payments Strategy 2022-25

ECONOMIC OVERVIEW Kenya has emerged as a regional powerhouse not only in East Africa but also in the wider MEA region. Nairobi, its capital and largest city, is even nicknamed 'Silicon Savannah' due to its robust tech ecosystem. Both multinational companies and those in the tech and fintech sectors have made significant investments in the country, boosting foreign direct investment. This includes Microsoft and Visa, with the former announcing a new office for its African Development Centre (ADC). Nairobi will also host the first Microsoft Africa Research Institute (MARI) in Africa, while Visa launched its first innovation hub in Africa - the Visa Innovation Studio.

FINTECH OVERVIEW Kenya has demonstrated its financial inclusion efforts with the popularisation of mobile money (aka its

54,719,686

most famous export M-Pesa), which is estimated to contribute at least five per cent to Kenya’s overall GDP. During the first 11 months of 2021, Kenyans made 1.9 trillion mobile money transactions worth over $55billion. Transactions in the first 11 months of 2021 were up 20 per cent compared to the whole of 2020, with over 37.6 million transactions every day, amounting to 176 billion Kenyan Schillings KES ($1.49billion).

Headlines this year have highlighted the issue of mobile money and taxes. To meet its ambitious revenue goals, the government appears to want the Kenya Revenue Authority, its tax department, to monitor digital payments made through M-Pesa and other mobile money services. By monitoring digital payments made on M-Pesa and other mobile money services, the government hopes to widen the tax net.

BREAKDOWN OF SECTOR

Fintechs in Kenya (percentage).

■ Lending (30%)

■ Blockchain (15%)

■ Financial management (6%)

■ Other (9%)

EXAMPLE OF FINTECHS

■ Payment (27%)

■ Investec (7%)

■ Insurtech (6%)

■ Apollo Agriculture – Online marketplace for farm loans. It offers a platform for farmers to access credit and farm inputs through crop health assessment

■ Mara – Online platform for digital wealth learning for cryptocurrency

■ BitPesa – offers digital wallets for cross-border money transfers for individuals

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB - TIER TWO CATEGORY

54,719.7

KEY ORGANISATIONS

■ Central Bank of Kuwait – the country’s central bank

■ Kuwait Banking Association – focuses on member bank coordination and collaboration to resolve any issues

■ Capital Markets Authority – the capital markets authority of the country

■ Insurance Regulatory Unit – Regulates insurance market activities in a manner that is fair, transparent and competitive

■ Kuwait Direct Investment Promotion Authority – country’s investment promotional agency

CAPITAL & FINANCIAL HUB Kuwait City (ranked 116th globally)

KEY ECONOMIC DEVELOPMENT STRATEGY Kuwait Vision 2035

ECONOMIC OVERVIEW With the world’s sixth-largest oil reserves, the State of Kuwait has seen the benefits and helped transform itself into a wealthy nation. The country has historically been a regional financial centre. Its financial system comprises four sectors: banking, insurance, other financial institutions and investment funds.

There are over 100 financial institutions offering financial products and services in the country. Banking in Kuwait is dominated by retail business, with personal loans/financing comprising 40 per cent of total facilities. Additionally, Kuwait has produced some of the region's most iconic tech companies, such as delivery app Talabat and e-commerce platform Boutiqaat.

The demographics of its population are a testament to its wealth, with figures that are much higher than most of MEA. Over half of the population, like MEA as a whole, which is a young population, are between 18 and 39 years old. Nearly 80 per cent of those aged above 15 have an account with a financial institution, almost a quarter have a credit card, and over a third make online purchases and/or pay online bills.

FINTECH OVERVIEW Eighty-three per cent of Kuwaitis are willing to adopt fintech solutions. This is also being seen across the wider financial services sector. For example, Kuwait Finance House and National Bank of Kuwait (NBK) both partnered with blockchain specialist Ripple, and Gulf Bank is using biometric facial recognition on its mobile app.

At the end of last year, the Central Bank of Kuwait (CBK)

4,295,798 Population in millions

$24,300.30

announced that priority will be given in its regulatory sandbox to test fintech products and services that support the sustainability agenda. By prioritising ESG finance solution testing in the sandbox, it is hoped that the Kuwaiti financial system will benefit from more innovative sustainable fintech solutions which would subsequently enhance the adoption of social and climate-related financial instruments.

After activating the Samsung Pay and Apple Pay services for electronic payment recently, it looks imminent that Kuwaiti banks are close to launching Google Pay this year. The CBK granted at least three banks, including Kuwait Finance House, licences to activate the Google Wallet application.

Later last year, the Competition Protection Authority received requests from three alliances to establish digital banks in Kuwait, including seven listed companies, noting that the authority’s officials have begun studying the competitive weights that can arise from these alliances in the future.

BREAKDOWN OF SECTOR Fintechs in Kuwait (percentage).

■

EXAMPLE OF FINTECHS

■ Tap Payments – simplifies online payment and acceptance for businesses with an easy, quick and secure experience for people paying on websites & apps

■ Myfatoorah – one-stop revolutionary payment solutions for all one’s requirements to manage their business online

■ Ajar Online – collecting payments online and offline

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER TWO CATEGORY

0.831

KEY ORGANISATIONS

■ Banque du Liban – country’s central bank

■ Capital Market Authority – Lebanon’s authority for capital market

■ Insurance Control Commission (ICC) – is an independent institution, in charge of maintaining an efficient and stable Insurance market in the country

■ Investment Development Authority of Lebanon – Lebanon’s investment promotional agency

CAPITAL & FINANCIAL HUB Beirut

KEY ECONOMIC DEVELOPMENT STRATEGY N/A

ECONOMIC OVERVIEW The past few years have seen Lebanon suffer economically, coupled with an ongoing economic and financial crisis that stems from 2019 which worsened with the Covid-19 pandemic and the Port of Beirut explosion in August 2020.

This has led to the country being downgraded to a lowermiddle-income country from its heyday as an upper-middleincome economy, with GDP per capita having shrunk by at least 35 per cent from 2019-2021 alone.

Lebanon's banking sector, which informally adopted strict capital controls, has essentially ceased lending and does not attract deposits. Instead, it endures in a segmented payment system that distinguishes between older (pre-October 2019) US Dollar deposits and minimum new inflows of ‘fresh dollars’. It is a common sight to see individuals queue for hours on end just to withdraw cash, which is also severely limited.

The country has long been one that sends its people abroad, and its current crisis is further accelerating that, whereby remittances have historically and presently played a strong part in its wider GDP; at present, it accounts for at least 20 per cent of its overall GDP.

Historically, Lebanon was one of the top three countries in MENA to receive the most startup VC funding. At one point, it was the fourth most served market by fintechs in MENA. Due to the need from past challenges, the Lebanese have also been open-minded about adopting new technologies.

FINTECH OVERVIEW In 2017, 54 per cent of people with a bank account had adopted digital banking in Lebanon.

5,403,469

Additionally, in 2016, Lebanon ranked second in the region for the percentage of people who exclusively used mobile banking. Fintech has opportunities to further penetrate Lebanon, such as with remittances.

For instance, there has been a rise in the popularity of digital wallets, as a result of the country now permitting them. An example is Global Digital Money, which allows people to hold digital currencies not only in a digital wallet but also in a regular card. It gives the user the ability to make all payments using those cards at POS or ATMs.

Also, due to the Lebanese trying to protect their assets and savings from a weak Lira, many are turning to digital currencies and specifically cryptocurrencies. Vast parts of the population are investing in the likes of Bitcoin but also in stablecoins like Tether (USDT) to mitigate risks.

In fact, many shops in the country are increasingly accepting payments in USDT. In terms of the regulation that encompasses fintech, not much appears to have changed in today's terms. The government will need to build an infrastructure that entrepreneurs and those in fintech can feel confident in from a regulatory point of view. Therefore, initiatives such as a regulatory sandbox could help the economy recover.

BREAKDOWN OF SECTOR

The country as a whole offers opportunities not just in fintech but in its sub-sectors too, such as insurtech, e-payment and paytech.

EXAMPLE OF FINTECHS

■ Capital Banking – Capital Banking offers software solutions for banking, wealth management, capital markets, and compliance. The company offers a core banking solution that enables banks to manage accounts, deposits, and fund transfers

■ PinPay – offers a smartphone application for consumers to enable mobile payments to pay for mobile bills and TV services

■ Neotic – (formerly known as Daily Stock Select) is developing AI-enabled a platform for automatic trading strategies and recommendation

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER TW0 (LOWER-END) CATEGORY

Beautiful aerial view of Beirut

Kuwait Tower City Skyline glowing at night

The Hassan II Mosque in Casablanca, Morocco

REPUBLIC OF MAURITIUS 10

KEY ORGANISATIONS

■ Bank of Mauritius – the central bank of the country

■ Financial Services Commission (FSC) – the country's financial services regulator minus banking institutions and global business

■ Mauritius Fintech Hub – launched in 2018 with the objective to promote Mauritius as the Fintech Innovation Hub for the African continent

■ Mauritius Economic Development Board – the country’s main investment promotional agency

■ Insurers’ Association of Mauritius – set up in 1972 as the voice for the insurance industry

■ Mauritius International Financial Centre (IFC ) - an internationally recognised jurisdiction and home to international banks, legal firms, corporate services, investment funds and private equity funds

CAPITAL & FINANCIAL HUB Port Louis (ranked 87th globally)

KEY ECONOMIC DEVELOPMENT STRATEGY

Mauritius Vision 2030

ECONOMIC OVERVIEW With many of its citizens speaking both French and English, the island nation in the Indian Ocean is uniquely placed to be a gateway for Africa and South Asia. The country has transformed itself to be an upper-middle-income country, boasting one of the highest GDP per capita in the African continent. It acts as a gateway between the rest of Africa and South Asia with its location in the Indian Ocean. With its own economic development strategy, by 2030 it aims to join the high-income countries through its political stability, resources and its gateway between Africa and Asia. As with other strategies, a focus on highly skilled employment, infrastructure, and digital are key components to help take the country to 2030. With its financial services sector, the nation is recognised to be well-developed and well-capitalised. The country has worked hard to not only make itself investorfriendly but also to comply with global standards.

Last year saw the country being removed from the European Union's (EU) list of ‘high-risk third countries’ following measures by the government to improve its anti-money laundering (AML) and combating the financing of terrorism (CFT).

The financial services sector contributes 13 percent to Mauritius's total GDP in the country and employs over 8,600

people. The ICT/business process outsourcing (BPO) industry represents a key driver of the Mauritian economy with a GDP contribution of 7.4 per cent for last year and employing around 30,000 people with over 850 companies.

FINTECH OVERVIEW From the Mauritius National Budget 2021-2022, a series of measures were highlighted that would ultimately boost economic development, including key ones pertaining to fintech and wider digital. This included the setting up of an Open Lab by the Bank of Mauritius (BoM) for banking and payment solutions, as well as the establishment of a Fintech Innovation Lab by the Financial Services Commission (FSC) to boost entrepreneurship. The BoM also announced a pilot rollout of a Digital Rupee, a central bank digital currency (CBDC).

The Mauritius National Budget 2022-2023 highlighted that the 'Bank of Mauritius Act' will be amended to clarify that the BoM may open accounts and accept deposits from persons for the purpose of issuing digital currency. Furthermore, various acts, including the 'Declaration of Assets Act', will be amended to cover virtual assets. In September 2021, the FSC released 'the Financial Services (Crowdfunding) Rules' to improve access to finance for individuals, entrepreneurs and SMEs operating in or from Mauritius.

In 2021, the FSC issued the Financial Services (Crowdfunding) Rules in line with its strategy to sustain the growth of the fintech ecosystem within the Mauritius International Financial Centre. This regulatory framework for crowdfunding aimed to help shape and improve access to finance for individuals, entrepreneurs, as well as SMEs operating in or from the country.

BREAKDOWN OF SECTOR

Subsectors in Mauritian fintech include payments and processing, remittances, blockchain and cryptocurrencies, security and fintech tools.

EXAMPLE OF FINTECHS

■ Flash , Limit Markets and Learnleapology

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER TWO CATEGORY

KEY ORGANISATIONS

■ Bank Al-Magrib (The Central Bank of Morocco)

– country’s central bank

■ Morocco Fintech Association – main fintech association of the country

■ Supervisory Authority of Insurance and Social Welfare (ACAPS) – authority overseeing the insurance sector

■ Moroccan Capital Market Authority (MCMA)

– authority for capital markets

■ Maroclear – Central Securities Depository in Morocco since 1997

■ Moroccan Investment and Export Development Agency

– country’s investment promotional agency

■ Casablanca Finance City Authority – an economic and financial hub aspiring to become a bridging platform between the north and the south

FINANCIAL HUB Casablanca

KEY ECONOMIC DEVELOPMENT STRATEGY Maroc Digital 2020

ECONOMIC OVERVIEW The country relies heavily on the export of raw materials and some agricultural products like citrus, as well as other sectors like tourism and telecommunications. However, the latter took a beating during the Covid-19 pandemic.

In 2021, the Moroccan economy rebounded with a growth rate of 7.9 per cent. However, a series of overlapping shocks led to an abrupt deceleration of economic activity, and GDP growth dropped to just 0.3 per cent in the first quarter of last year. Part of this was the impact of another drought it faced, which was the third one it had in the last four years. Also, the country is heavily impacted by commodity prices as it is an importer of energy and food, as it has been facing the war in Ukraine.

Remittances play a large role in the Moroccan economy, as many Moroccans live overseas, especially in Europe. Remittances contribute to almost eight per cent of the country's GDP.

FINTECH OVERVIEW Morocco has one of the highest rates of unbanked in the world at 71 per cent. Moroccans tend to choose to pay with cash from an ATM rather than use a credit card, while they also trust traditional establishments like banks.

These figures present a challenge for fintech but also opportunities. Mobile wallets for digital remittances are available, yet only one per cent of Moroccans utilised these services last year.

37,707,920

Banks account for nearly half of Morocco’s financial system, and the country contains two of the largest banks in Africa, Groupe Banque Populaire and Attijariwafa. Many traditional financial institutions are working on their own new technologies to keep up with the services offered by fintechs and startups, as well as traditional banks adopting fintech services for their own customers, such as mobile banking and other digitised platforms.

Morocco’s mobile market is one of the more mature, with a penetration rate of 137.5 per cent. The Kingdom’s three largest telecoms are Maroc Telecom, Inwi and Orange. It saw an internet penetration rate of 83 per cent in 2020 (compared to 71 per cent in 2019). According to Visa, the use of cash in Morocco declined, especially during the pandemic. Even though e-commerce and contactless payments have increased in popularity and use since the start of the pandemic, paying by cash on delivery declined significantly by 86 per cent.

Cash usage decreased, with 43 per cent of consumers surveyed saying they are using it less for in-store shopping, while digital payments witnessed a percentage of almost half (49 per cent) on average, saying they are using it more often. This looks to be permanent, with consumer feedback showing that 46 per cent are more likely to use contactless payment methods in the future.

Visa’s study showed that over four fifths of consumers surveyed have high levels of confidence in contactless cards.

BREAKDOWN OF SECTOR Payment, remittance and POS systems are the most developed segments in terms of fintech subsectors in Morocco; crowdfunding, personal financial management, lending and data analytics are other subsectors.

EXAMPLE OF FINTECHS

■ OnePay – provides online bill payment solutions for consumers including mobile recharges, utility bills, online booking, travel bill payments, data subscription, credit card payments

■ MeilleurCreditmmo – provides an online comparison platform for real estate loans, with quotes based on algorithmic analysis.

■ SYPEX – Trade management solutions for capital markets

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB - TIER-THREE (HIGHER-END 'MARKET TO WATCH') CATEGORY

KEY ORGANISATIONS

■ Central Bank of Nigeria – country’s central bank

■ Securities and Exchange Commission of Nigeria

– Country’s security and exchange commission

■ National Insurance Commission (NAICOM)

– Commission to oversee the insurance sector

■ Fintech Association of Nigeria – association of fintechs in Nigeria

■ Nigerian Insurers Association – association for insurance sector

■ Nigerian Investment Promotion Commission

– Country’s investment promotional agency

FINANCIAL HUB Lagos (ranked 103rd globally)

KEY ECONOMIC DEVELOPMENT STRATEGY Nigeria Agenda 2050

ECONOMIC OVERVIEW The largest country in Africa by population, Nigeria's economy has historically relied on oil. However, as a middle-income country with much economic potential, the country is at a crossroads to further develop.

The megacity of Lagos (whose metropolitan area is home to over 20 million people) is home to some of the African continent’s largest banks and financial institutions – including First Bank of Nigeria (FBN), Access Bank, Ecobank and First City Monument Bank (FCMB). Many startup incubators are also concentrated in Lagos. Nigeria, and Lagos in particular, is also a major tech hub in the continent.

In terms of demographics, besides having the largest population in the MEA region, half of Nigeria’s population is under 19 years of age, and over 65 per cent are under 35 years old. According to Hootsuite, there are over 187 million mobile connections (90 per cent of its population); 10 to 20 per cent of the population have smartphones while the rest are using traditional mobile phones.

Half the population has access to the internet as well. These figures, although not as high as the developed world, are better than other fellow African neighbours. Nonetheless, there is further room for solutions like fintech to grow in this large market.

FINTECH OVERVIEW Nigeria raised the most VC funding in Africa at $600million during the first quarter of last year. In terms of key developments, Nigeria introduced a digital central bank currency called the e-Naira and released the exposure draft of Opening Banking last year. Meanwhile, the CBN ordered all banks to stop transacting with entities dealing in cryptocurrency. The CBN also directed banks to close accounts of persons or entities that were

involved in cryptocurrency transactions. Reports highlighted that this was done for security and money-laundering clampdowns.

Despite this, cryptocurrencies are very popular in Nigeria. Many point out that the 2016 economic recession in the country could have caused Nigerians to flock to digital currencies. This change in behaviour propelled Nigeria to have the largest crypto market in Africa by 2019 and one of the largest user bases in the world. Cryptocurrencies have remained popular despite the ban. A report by KuCoin showed that at least 33.4 million Nigerians aged between 18 and 60 had invested in digital assets in the past six months.

The CBN introduced a new type of banking licence: payment service banks (PSBs). This aimed to leverage the strengths of businesses, such as mobile network operators, while maintaining a bank-led rather than a telecoms-led banking model. Unlike in East Africa, where mobile money is extremely popular, Nigeria’s population is currently not sold on the concept. However, it has the potential to grow this market as last year saw the likes of MTN and other telecoms launch their PSBs in the country.

Nigeria, like much of the wider tech world as a whole, has seen its fair share of layoffs and/or hiring freezes. Sudden layoffs have been happening across Nigeria’s burgeoning startup ecosystem. Nigerian food procurement startup, Vendease, recently laid off nine per cent of its workforce and Quidax, a Nigerian crypto exchange startup, trimmed its workforce by 20 per cent last November. The country this year has experienced a banknotes crisis, with the switchover to new Naira notes. Like India in 2016, this can potentially further accelerate the demand for digital currencies and fintech as a whole.

EXAMPLE OF FINTECHS

■ Interswitch, Flutterwave and Piggyvest

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER TWO CATEGORY

SULTANATE OF OMAN

KEY ORGANISATIONS

■ Central Bank of Oman (CBO) – Country’s central bank

■ Capital Market Authority – Oman’s capital market authority

■ Oman Startup Hub (OSH) – a platform for startups, investors, advisors, and entrepreneurs to connect, collaborate and learn about the innovation ecosystem

■ Oman Investment Authority – country’s investment promotional agency

■ Sharakah – a closed-joint stock company incorporated by a Royal Decree in the Sultanate in 1998. Sharakah provides financial support and post-financial to SMEs in Oman

■ Oman Technology Fund – aims to put Oman firmly on the map of knowledge leaders in the Middle East

■ Oman Banks Association (OBA) – a non-profile professional association for the country’s banking industry

CAPITAL & FINANCIAL HUB Muscat

KEY ECONOMIC DEVELOPMENT STRATEGY Oman Vision 2040

ECONOMIC OVERVIEW Many may not know, but Oman was once a powerful empire, particularly with its navy and ships. At its peak, it had one of the strongest navies in the world, and its empire spread as far as the eastern shores of Africa.

Fast forward, while its fellow GCC economies transformed in many ways thanks to the discovery of oil and gas, Oman eventually found its reserves, which helped propel economic development to the Sultanate. In recent memory, like its fellow neighbours, much of its future is being led through national strategic visions that favour a diversified economy less reliant on oil.

The majority of the Omani population is young, with those under the age of 29 representing 63 per cent of the population. Oman has a significant expatriate population, estimated to be at least 1.7 million people.

FINTECH OVERVIEW Compared to the rest of its neighbours in the GCC, Oman appears to be a latecomer to fintech. Nevertheless, with the push from the top via Vision 2040, wider digital transformation and economic development is taking place in sectors like fintech. The pandemic has also solidified the importance of digital.

of Oman (CBO) confirmed that open banking is currently being worked on to help modernise the country’s banking industry.

The Open Banking API Strategy comprises various initiatives to mature the ecosystem, such as regulation in fintech, a regulatory sandbox, the release of a cloud computing framework for the financial and banking sector, initiatives to boost electronic know-your-customers (eKYC), virtual assets and fintech education.

As reported in 2021, Bank Muscat, the largest financial institution in the country, announced a new $100million fintech investment programme in 2019 with the blessing of the CBO. Also, in December 2020, the CBO launched its Financial Regulatory Sandbox with an overwhelmingly positive response. Finally, just earlier this year, the CBO and Omantel, the leading provider of integrated telecommunication services in the Sultanate of Oman, joined hands to deliver a six-month accelerator programme dedicated to nurturing and empowering fintech startups.

BREAKDOWN OF SECTOR

Usage of fintechs in Oman (percentage).

EXAMPLE OF FINTECHS

■ Split X – A buy now pay later (BNPL) solution

■ TelyPay – providing simple, trust and reliable digital solution, catering to both individuals and business owners with a secure fintech platform

■ Wadiaa – crowdfunding/crowd-investing fintech with a focus on equity and loan-based funding for SMEs looking to raise capital to recover from a downtown or expand their product and service offering

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER TWO CATEGORY

4,620,167 Population in millions

GDP per capita $19,509.50

28,519.5 Ratio of tech startups (per person)

162 Number of tech startups

47.41% Enrolled in higher education

2 Number of VC deals

6 Number of fintech companies

70% Ease of doing business

770,027.83

Ratio of fintech startups (per person)

46.9% Entrepreneurship

Oman appears to be taking a legislative-led approach to building its fintech ecosystem. Fairly recently, the Central Bank  Wider economic development Further economic development, tech & fintech specific highlights

0.813 Human development index

0 Unicorns

STATE OF QATAR 14

KEY ORGANISATIONS

■ Qatar Central Bank (QCB) – Country’s central bank

■ Qatar Financial Centre (QFC) – an onshore business and financial centre located in Doha, providing legal and regulatory services for local and international companies

■ Qatar Fintech Hub (QFTH) – a fintech hub with the purpose to support the development of the fintech industry in Qatar

■ Qatar Financial Markets Authority (QFMA) – was established under Law No. 33 of 2005 as an independent regulatory authority to supervise the financial markets

■ Investment Promotion Agency of Qatar – the country’s investment promotional agency

■ Qatar Development Bank (QDB) – its vision is to develop and empower Qatari entrepreneurs and SMEs to innovate and compete internationally while contributing to Qatar’s economic diversification and the development of its private sector

CAPITAL & FINANCIAL HUB

Doha (ranked 65th globally)

KEY ECONOMIC DEVELOPMENT STRATEGY

Qatar Vision 2030

ECONOMIC OVERVIEW Like many of its fellow GCC Arabian Gulf neighbours, it wasn’t too long ago that Qatar had more humble nomadic and fishing beginnings. Nonetheless, the economic development of the country, thanks in part to hosting one of the world’s largest natural gas reserves, has made the tiny nation one of the wealthiest in the world; it is the richest nation based on GDP per capita in the MEA region.

Despite its rich and abundant resources, which the world has seen in recent memory by hosting various regional and world events, the most prominent of which was a very successful FIFA World Cup in 2022, the country for a while now, thanks to its Vision 2030, is looking to diversify its economy.

It is not just being a regional and global hub for sports and entertainment events as the World Cup has shown, but also being a leader in financial services and wider digital. With the former, as reported in the previous version of this report, the QFC estimated to have 1,000 companies registered there by the end of last year. In 2019, over 800 fintechs, IT, tax and investment consulting firms were part of QFC.

2,708,864

FINTECH OVERVIEW

The Qatari government has supported fintech for its growth and development for the future economy. This has seen the likes of its main fintech catalyst, QFTH, come into fruition. As of September last year, QFTH has become the second-largest investor in MENA in fintech and incubated over 60 entities with a valuation in excess of $400million.

As a note, much of the fintech efforts, thanks in part to QFTH, has been a point of driver of the ecosystem with combined efforts alongside the QDB, QFC, and QCB – a testament that through collaboration, a common interest can further be accelerated.

Fintech was identified as a crucial tool to achieve long-term development for Qatar’s financial sector as part of the Second National Development Strategy 2018-2022. And like what Qatar has done with other sectors, the likes of Qatar Investment Authority (QIA – its sovereign wealth fund), according to reports this year, is also eyeing opportunities in fintechs globally, as well as venture capital and sustainability.

BREAKDOWN OF SECTOR

According to the From Qatar to the World: A report by QFTH, the four areas in focus are payments, regtech, Islamic finance and SMEs; fintech strategy launched in March.

BREAKDOWN OF

SECTOR

■ Loopay – The principle used is a financial technology service based on providing payment services through an online payment platform as a ‘B2B’ business mode

■ CWallet– provides inclusive and regulated financial services to consumers, businesses, and government institutions. CWallet evolves in three basic principles: payroll, payment, and remittance

■ Tiptiptop – guests will be able to leave a tip by bank card in five to 10 seconds without a mobile application and registration

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER TWO CATEGORY

25,796.99

KEY ORGANISATIONS

■ National Bank of Rwanda – the country’s central bank founded in 1964

■ Rwanda Fintech Association – a fintech association promoting the industry in the country

■ Rwanda Development Board – Investment promotional agency

■ Capital Market Authority – Rwanda’s capital market authority

■ Kigali International Financial Centre – an ecosystem of financial actors that will transform Rwanda into an international financial destination for investors

CAPITAL & FINANCIAL HUB Kigali (ranked 99th globally)

KEY ECONOMIC DEVELOPMENT STRATEGY Rwanda Vision 2050

ECONOMIC OVERVIEW From having suffered the consequences of civil war to transforming itself politically and economically, Rwanda has earned the nickname ‘Switzerland of Africa’ due to its impressive transformation in a relatively short period. Its economic progress has created a business-friendly and forward-thinking ecosystem, positioning itself as a regional hub and even for the African continent as a whole.

Rwanda's incredible transformation can be seen in its 2050 vision to become a globally competitive, knowledge-based economy. Its ambition is to be a high-income country with digital playing a strong role in its growth and development. The country's financial services industry, which is home to various banks, is a key contributor to this vision, as evidenced by its Kigali International Financial Centre (KIFC). KIFC made its debut on the Global Financial Centres Index (GFCI) in September 2021 and was recognised as one of the most promising financial centres in the coming decade, ranking among the top five IFCs in Sub-Saharan Africa.

FINTECH OVERVIEW Last year, Rwanda launched an exciting fintech strategy with the implementation phase set for 2022 to 2027. Its vision is to enable a thriving fintech ecosystem with two key objectives. The first is to position Rwanda as a regional financial hub and centre, and the second is to promote customercentric financial inclusion and sector development to drive economic and social transformation.

Aligned with Rwanda's Vision 2050, the fintech strategy's objectives are to set Rwanda up as a testing ground for fintech by becoming an environment for local and global fintechs

to test complex ideas and establish the country as a launchpad for fintechs to test their products and use as a launchpad for the region.

Two highlights in the previous version of this report in 2022 were: firstly, The Kigali International Financial Centre (KIFC) launched the first and only fintech-focused Africa Fund valued at $50million and backed by MyGrowthFund Venture Partners.

The fund hopes to facilitate homeland investment and will create proximity on the continent between investments and fintech investment opportunities. Secondly, MTN is designing a digital input credit product for farmers in partnership with NCBA, a financial services provider, with support from the GSMA AgriTech Innovation Fund. Through the experience of MoKash, a digital savings and instant loan product for the mass market launched in 2017, MTN and NCBA aim to become relevant to farmers via bundled digital financial services such as savings, short-term loans and insurance, as highlighted in the GSMA State of the Industry Report on Mobile Money 2022.

BREAKDOWN OF SECTOR

Fintechs in Rwanda (total of 52 fintechs).

EXAMPLE OF FINTECHS

■ ADFinance – an integrated information system that specialises in customer and loans management, savings, and accounting core module services

■ MobiCash – a financial transaction platform (banking and payment). Around it, there are many opportunities to define and integrate value-added services (VAS) like agent banking, money-remittance etc

■ Comza Africa – an institution that believes Africa can play a leading role in mobile innovation

OVERALL FINTECH HUB STATUS: ONES TO WATCH –TIER-THREE (HIGHER-END 'MARKET TO WATCH') CATEGORY

KINGDOM OF SAUDI ARABIA 16

KEY ORGANISATIONS

■ Saudi Central Bank (SAMA) – Kingdom’s main central bank

■ Capital Market Authority – country’s capital market authority

■ Fintech Saudi – main catalyst promoting the fintech industry

■ Saudi Investment Promotion Authority (SIPA)

■ King Abdullah Financial District (KAFD) – an under construction mixed used mainly new financial district in Riyadh

■ Council of Cooperative Health Insurance – To be an international leader in prevention and improving value in health care services for the health insurance beneficiaries.

FINANCIAL HUBS Riyadh (ranked 83rd globally) also the capital city; Jeddah (historical commercial hub)

KEY ECONOMIC DEVELOPMENT STRATEGY Saudi Vision 2030

ECONOMIC OVERVIEW Saudi Arabia is currently undergoing massive economic development transformations centred around its national economic development strategy, Saudi Vision 2030. While the rest of the GCC shares similar national aspirations, Saudi Arabia's progress is quite impressive and has made global headlines. From the new essentially province NEOM, which will host the linear city ‘The Line’, to the world's most expensive metro station in Riyadh, it is truly impressive at such a large scale.

This has resulted in a prioritisation of digital transformation of the financial services sector as a whole. One of its original delivery programmes is the Financial Sector Development Programme (FSDP), which aims to make Saudi Arabia's financial services sector strong, modern, and innovative.

FINTECH OVERVIEW Last summer, the FSDP launched the Fintech Strategy Implementation Plan, which aims to accelerate the Kingdom's fintech sector on a global stage and make Riyadh, in particular, a global fintech hub. It is expected that the benefits of fintech in the Kingdom will spill over to other sectors beyond financial services, such as retail, hospitality, real estate, healthcare, transportation, and investment.

The Kingdom plans to triple the number of fintechs it has by 2025 to 230 fintechs and aims to increase digital transactions of all financial dealings to 70 per cent within the next three years. Additionally, it aims for fintech to contribute 4.5 billion SAR

120,812,698 Population in millions

GDP per capita $23,185.90

 Wider economic development

38,412.7

Ratio of tech startups (per person)

($1.2billion) to the GDP, creating 6,000 new jobs by 2025. By 2030, the vision is to have 525 fintechs in Saudi Arabia and to have created nearly 18,000 jobs.

One key highlight of Saudi Arabia has been its push for open banking. Last year saw SAMA launch its new open banking framework. SAMA said it is "tracking the development of banks and fintechs to ensure their readiness to launch open banking services within the first quarter of this year in 2023”.

With a young population and a high adoption rate of technology, fintech is making strides and bringing more opportunities for digitalisation. For instance, Saudi Arabia has the highest adoption rate of contactless payments through Near-Field Communication (NFC) at 94 per cent, the highest in the MENA region, above the EU average, and ahead of Hong Kong and Canada.

BREAKDOWN OF SECTOR

Fintechs in Saudi Arabia (percentage)

■ Payments and currency exchange (32%)

■ Personal finance/treasury management (13%)

■ Private fundraising (10%)

■ Other (7%)

EXAMPLE OF FINTECHS

■ Lending/financing (19%)

■ Business tools (12%)

■ Capital markets (7%)

■ Geidea – flexible and integrated point of sale (POS) solution to run restaurants, quick dining, cafes, food trucks and cloud kitchens.

■ FOODICS – Cloud-based POS and restaurant management system.

■ Sulfah – develops mobile applications assisting in quick financing by accelerating loan deposits to the user's bank account.

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB – TIER-TWO (HIGHER-END) CATEGORY

71.41% Enrolled in higher education

71.0% Ease of doing business

40.2% Entrepreneurship

957 Number of tech startups

139 Number of VC deals

0.875 Human development index

Further economic development, tech & fintech specific highlights

82 Number of fintech companies

448,304.32

Ratio of fintech startups (per person)

Yes Regulatory sandbox

1 Unicorns (Saudi Telecom Co)

BUILDING STRONG COLLABORATIONS

“We expect the Saudi Arabian market to embrace open banking at a higher pace than other countries. All the needed factors are here: a thoughtful and innovative regulator, a mandate for banks to develop their APIs based on a unique standard, and an increased demand from the market. Fintech apps, corporates, SMEs, merchants, lenders, and all kinds of financial service providers have been showing great interest to implement open banking-powered solutions.”

Beleuta states that there is an air of excitement and anticipation about open banking in Saudi Arabia. In part, this is because SAMA is generating commercial interest among banks.

“Saudi differs from the UK, Europe, and other worldwide open banking adopters in its approach of providing use cases from early in the implementation of open banking. An interesting aspect of Saudi banks is that regulatory compliance does not make up their entire focus. Aside from this, many banks have already set strategies for how to go beyond it and build premium APIs and banking-as-a-service (BaaS) on top of their compliance infrastructure.

“At the moment, local banks in Saudi face a challenge when it comes to sourcing talent to fill open banking roles. Open banking in Saudi is extremely new and it requires a lot of time for onboarding, for understanding not only the technicality but the business view on it, and this is a struggle for the local banks.

“It’s also an opportunity for people in other countries, like Europe and the UK to share their experience with the banks here. In view of their extensively gained experience, international vendors can create a path that helps prevent and eliminate obstacles from the get-go. And this is what the banks are doing actually – they are targeting both local and international talents to develop some frameworks and trying to understand the business side, like how do you monetise it? What kind of use cases will be relevant for their clients, for their products?”

COMPANY INFO

Salt Edge is a leader in building open banking API solutions that assist financial institutions in the Middle East and globally to become open banking compliant, monetise the open banking technology, and optimise business processes including lending, accounting, invoicing, KYC. ISO 27001 certified and open banking licensed in the UK, the company employs the highest international security measures.

VISIT: https://openbankingsaudi.saltedge.com

LET’S TALK: www.saltedge.com/contact_us

TWITTER: @saltedge

LINKEDIN: www.linkedin.com/company/salt-edge

ALINA BELEUTA CHIEF GROWTH OFFICER AT SALT EDGE

The skyline of Doha city centre after sunset, Qatar

King Abdullah Financial District in the city of Riyadh, Saudi Arabia

The corniche in Muscat, Oman

KEY ORGANISATIONS

■ Central Bank of the West African States (BCEAO) – the common issuing institution of the eight West African member States of BCEAO including Senegal, as they are all part of a monetary union

■ Agency for Investment Promotion and Major Projects (APIX) – the country’s investment promotional agency

■ Senegalese Information Technology Association (SITSA) – the first national association to represent the information industry and professionals in Senegal

CAPITAL & FINANCIAL HUB Dakar

KEY ECONOMIC DEVELOPMENT STRATEGY

Senegal Vision 2035

ECONOMIC OVERVIEW Senegal's economic growth is expected to jump to 10.1 per cent in 2023 compared to 4.8 per cent in 2022, driven by oil and gas production. Historically, much of the economy centred around agriculture, specifically around peanuts. However, the government, from the last century until present, has been diversifying its economy to include other agricultural products and non-agricultural products, such as tourism and natural resources like oil and gas and gold.

By 2025, it aims to create 35,000 new jobs in the field of technology. Mobile phone usage in Senegal has surpassed more than 60 per cent this year. In terms of traditional finance usage, Senegal only had seven percent of its population use it. Being located in West Africa and being a Francophone nation, as well as one of the more stable and relatively prosperous ones compared to its other Francophone countries, Senegal aims to further grow and use digital as a part of that.

FINTECH OVERVIEW Senegal, despite its relative prosperity, is still very much a developing economy, and fintech can help bring wider financial inclusion to the majority that are missing out. Traditional financial institutions, almost two-thirds (63 percent) of ATMs and another almost two-thirds (64 per cent) of point of service for traditional financial institutions are located in the capital and largest city of Dakar, showing that much of the rural areas are very underserved. Dakar is ranked ninth in Africa by the Global Fintech Index City Rankings 2020, and it is estimated there are 24 fintechs and 47 enablers and funding partners in the country.

17,604,652 Population in millions

Where fintech is thriving in the country and probably one, if not its most visible representation, like much of Africa, is around mobile money. For instance, in terms of consumers using mobile money to get a loan in the past 12 months, Senegal had 12 per cent of people do this. Also, more than 70 percent of adults in Senegal reported using mobile money within the last 30 days, while almost half of the respondents had difficulty or didn’t know how to read or write.

Saying that, there still remains to be further opportunity to persuade people to go cashless. Notably, some of its key barriers are around the relevance of mobile money and their knowledge of it. For example, 56 per cent of people in Senegal still prefer to use cash, while 58 per cent of people also say that they have friends/family with mobile money accounts that they can use, which disincentivises them to get one for themselves. Despite that, there were 113.95 mobile subscriptions registered for every 100 people in 2020.

BREAKDOWN OF SECTOR Fintechs in Senegal (percentage)

■ Payments (42%)

■ Marketplace for financial services and aggregators (29%)

■ Process and technology enablers (17%)

■ Other (12%)

EXAMPLE OF FINTECHS

■ Wave – Mobile money, reinvented. Deposit, withdraw, pay bills for free. First African Francophone fintech unicorn

■ Bayseddo – an online crowdfunding platform for agribusinesses

■ Sudpay – Multiple payment solutions for businesses and individuals

OVERALL FINTECH HUB STATUS: EARLY-STAGE FINTECH HUB –TIER-THREE (HIGHER-END 'MARKET TO WATCH') CATEGORY

REPUBLIC OF SOUTH AFRICA 18

KEY ORGANISATIONS

■ South African Reserve Bank (SARB) – country’s central bank

■ Financial Sector Conduct Authority (FSCA)

– the financial institutions market conduct regulator

■ Payments Association of South Africa (PASA) – payment system management body recognised by SARB

■ South African Insurance Association (SAIA)

– representative body of the non-life insurance industry

■ Insurance Institute of South Africa (IISA) – professional membership institute for the South African short-term insurance industry

■ Fintech Association of South Africa (FINASA)

– the mission to nurture and empower the thriving fintech ecosystem in the country

■ The Banking Association South Africa (BASA) – advances the interests of the banking sector

FINANCIAL HUBS Cape Town (ranked 55th globally) and Johannesburg (ranked 56th globally); former also capital city alongside with Pretoria and Bloemfontein

KEY ECONOMIC DEVELOPMENT STRATEGY National Development Plan 2030

ECONOMIC OVERVIEW Unlike the majority of Africa and even the Middle East and Africa (MEA) as a whole, South Africa has a well-developed financial services sector. This includes its banking sector, where the majority (at least two-thirds) of the population has a bank account, and its insurance sector, which alone commands four-fifths of all premiums written across the African continent. Speaking of insurance, South Africa has one of the world's highest penetrations in the world.

Unique to South Africa is that it has two cities, Johannesburg and Cape Town, which have dominant regional roles as commercial and financial hubs. Both cities compete relatively well on the regional and global stage. For instance, Johannesburg has the secondhighest number of Fortune 500 companies with a regional presence in MEA, after Dubai in the UAE.

Despite its relative success, there is still much work to be done to address its ongoing economic and political challenges. Poverty and inequality remain high in the country. Nonetheless, the country is pushing for digitalisation and fintech can play a role in that.

60,224,040

FINTECH OVERVIEW

There are potential opportunities for fintech to further grow in the country. One such opportunity is to bring the wider message of financial inclusion for both individuals and businesses, especially MSMEs.

Similarly, unique to South Africa is not only the high rate of mobile penetration but also the high rate of smartphones in the country. For instance, 95% of South Africans now have a mobile phone, and, unlike Africa as a whole, 91 per cent of all phones in the country are smartphones.

While the wider trend of mobile money has not been as successful in the country, owing to the majority of its citizens having access to traditional bank accounts in a market that has a strong, entrenched financial system, Vodacom and MTN are targeting the unbanked again through super apps in an attempt to disrupt the traditional financial systems.

Open banking also presents opportunities for the country. At present, South Africa is home to at least six banks that are currently offering customers open banking services.

Finally, the country has been leading not just in Africa but globally across various solutions, such as with challenger banks like Tyme Bank. It has exported its know-how abroad and expanded to the likes of the Philippines.

BREAKDOWN OF SECTOR

Fintechs in South Africa (percentage).

EXAMPLE OF FINTECHS

■ JUMO – banking as a service (BaaS) platform

■ Naked Insurance – Online for car, home and contents insurance

■ Pineapple – South Africa’s first P2P insurer

OVERALL FINTECH HUB STATUS: EMERGING FINTECH HUB - TIER TWO CATEGORY

UNITED REPUBLIC OF TANZANIA 19

KEY ORGANISATIONS

■ Bank of Tanzania – the state-run bank operates as the central bank

■ Capital Market and Securities Authority – the main market and securities authority

■ Tanzania Insurance Regulatory Authority – insurance regulator

■ Tanzania Startup Association – an umbrella membershipbased organisation which bring together stakeholders of startup ecosystem in Tanzania

■ Tanzania Investment Centr e – main investment promotional agency of the country

FINANCIAL HUB Dar es Salaam

KEY ECONOMIC DEVELOPMENT STRATEGY

Tanzania Development Vision 2025

ECONOMIC OVERVIEW Tanzania's principal exports are gold, coffee, cashew nuts, and cotton. Of these, gold provided more than two-thirds of the country's export earnings in the early 2000s. It is increasingly looking at other sectors, such as tourism, to further diversify its economy and increase its lower-middle income economy status. Tanzania has been one of the African continent's fastestgrowing economies, with a seven per cent average annual growth in its national GDP since 2000.

In terms of its financial services industry, similar to its historical view with a more centrally-planned economy as a whole, all private banks were nationalised between 1967 and 1992. Since then, private banks (including branches of foreignowned banks) have been allowed to open.

It is still mostly a rural-focused economy, as for instance four-fifths of people are working in the agricultural sector.

FINTECH OVERVIEW Tanzania's fintech landscape has grown and changed positively due to regulatory reforms in the payment sector and the launch of government policies and initiatives focusing on ICT. This was evident in 2015 when the Tanzanian government established the ICT Commission. Additionally, the government has an MoU with ecosystem facilitator Financial Sector Deepening Trust (FSDT). This has helped Tanzania to catch up and advance digitally when fintech services at the time were limited mainly to

airtime purchases, cash deposits, and money transfers and withdrawals.

Tanzania has seen mobile money help bring about financial inclusion to much of its population, following a similar trend to its other East African peers, where overall they (particularly Kenya) lead the world and popularised it and exported it globally. The percentage of Tanzanian citizens using formal financial services grew from only 16 per cent in 2009 to 65 per cent in 2017. Since June 2021, Tanzania has had over 33 million (33.2) mobile money accounts opened.

As of 2021, there are currently six mobile network operators in Tanzania, with many partnering with financial service providers that enable peer-to-peer (P2P) payments via mobile wallets and digital banking services. Some of these players include M-Pesa from Safaricom, Tigo Pesa from Tigo, and Airtel Money.

Challenges do remain. One of which was the tax on mobile money that was introduced in 2021 which saw dips initially in usage of it but it seems to have teetered off back to pre-tax levels. Also, generally, the country, unlike those featured in this report, still lags behind with regulations in fintech. This is clear as for instance not much (at least known to the public) about a regulatory sandbox.

BREAKDOWN OF SECTOR

Fintechs in Tanzania (estimated 33 fintechs – some are double counted as they are superapps)

EXAMPLE OF FINTECHS

■ Azampay , Mipango and Lokofin

OVERALL FINTECH HUB STATUS: EARLY-STAGE FINTECH HUB – TIER-THREE CATEGORY

120,812,698 Population in millions 0 Unicorns

16.4% Entrepreneurship GDP per capita $1,099.30

159 Number of tech startups

2 Number of VC deals

33 Number of fintech companies

2,022,830.66 Ratio of fintech startups (per person)

Dakar is the capital and largest city of Senegal

Table Mountain at sunset towering over Cape Town, South Africa

Dar es Salaam's downtown Business District, Tanzania

KEY ORGANISATIONS

■ Banque Centrale de Tunisie – Central Bank of Tunisia (BCT), Conseil du Marché Financier, Startup Tunisia, Entrepreneurs of Tunisia, Tunisia Investment Authority, FintechTunisia

CAPITAL & FINANCIAL HUB Tunis

KEY ECONOMIC DEVELOPMENT STRATEGY Digital Tunisia 2020

ECONOMIC OVERVIEW Tunisia claims a lot in terms of categories in MEA - Francophone, Arab North African and Africa. Its uniqueness can and has positioned it to be a gateway across those cultural regions. Despite having its own challenges, from economic to political to security, the country continues to move forward with tech playing a big part. It has been pretty stable and more developed in many ways than many of its peers. However, with historical sectors of the country like tourism, which took a beating in recent memory from internal affairs, terrorism, and the Covid-19 pandemic, the growth of the tech scene can help the economy further diversify and bring more knowledge-based roles and opportunities for the youth in particular.

The government has been proactive in developing a wider startup and digital infrastructure where entrepreneurship is able to take shape. This included a Digital Tunisia 2020 strategy that has prioritised digital transformation as a key driver for the country’s economic development. It was the first African country to pass a Startup Act in April 2018, providing the following: a legal framework to simplify the startup launching process; a €200million fund for specific verticals; a strategy to consolidate the ecosystem and hubs in Tunisia. 320 have so far received access to the benefits from the Act. The Global Entrepreneurship and Development Institute (GEDI) ranked Tunisia first in Africa, sixth in the MENA region, and 40th globally. This has been attributed to the government’s efforts to help foster entrepreneurship coupled with the ecosystem and drive to do so.

As underscored by the Africa: The Big Deal report, Tunisia has made remarkable gains in investments with respect to startups as a whole. In 2019, it had only $7million in investment with respect to startups, but that doubled in 2020 and by 2021 saw it at $23million. In the first five months of last year, it grew to $104million, ending the year with almost $150million, with one startup alone, Instadeep, raising over $100million. It has been reported that much of the regulation in the country is heavily regulated, so in terms of the future, it remains to be seen if much of that could ease for

and further growth of the wider startup community.

FINTECH OVERVIEW In 2019, less than 40 per cent of Tunisians aged 15 and over had a bank account, which was lower than the under 50 per cent average in MENA. Also, eight per cent of its population had a credit card, which is lower than the MEA average of 12 per cent. An interesting observation is the popularity of the postal service in Tunisia, which has over six million people with financial accounts. Of those Tunisians that are part of a formal financial service, at one point 90 per cent of them were with the La Poste Tunisienne system. It offers a large array of fintech products such as mobile financial services, domestic and international remittances, bill payments, as well as smart card purchases.

Mobile connections are at 150 per cent of its population at 17.84 million. In addition, two-thirds (or 66.7 per cent) of the population are internet users. Also, with its figures for the internet higher than MEA’s, it is worth noting it has a smartphone penetration of 66 per cent as well. Tunisia, however, remains a mainly cash-based society. Mobile money only has a two per cent penetration in the country, bucking the wider trend of its popularity in Africa as a whole. It will present challenges whereby the adoption of technology such as fintech would help change society.

Nonetheless, the pandemic has forced many to go digital in particular with the boom of e-commerce. In Tunisia, this saw an increase in electronic payment transactions registered during the second quarter of 2020 (during lockdown periods), whereby there was a 34 per cent growth in the number of transactions and a nine per cent increase in the value of such transactions.

For fintech to also grow, further partnerships between banks, insurance, and telecommunications and fintechs in the country should accelerate. However, this seems to be happening slowly.

The Banque Centrale du Tunisie (or Central Bank of Tunisia) in 2020 announced the launch of the regulatory sandbox. It has also established a fintech committee and a technological hub.

BREAKDOWN OF SECTOR

According to a study on Tunisia’s fintech ecosystem, the country hopes to become a pioneer by implanting blockchain in the TCB, digital payment, and cryptocurrencies – according to the declarations of the governor of the TCB.

OVERALL FINTECH HUB STATUS:

EMERGING FINTECH HUB - TIER-TWO CATEGORY

REPUBLIC OF TÜRKIYE 21

KEY ORGANISATIONS

■ The Central Bank of the Republic of Türkiye – country’s central bank

■ Investment Office of Türkiye – main investment promotional agency of Turkey

■ Fintech Association of Turkey (FINTR) – association promoting Turkey’s fintech sector

■ Capital Markets Board of Türkiye – capital markets authority

■ Insurance Association of Türkiye – association promoting the insurance sector

■ Payment and Electronic Money Institutions Association – the public professional organisation with legal entities that payment and electronic money institutions of Türkiye have compulsory membership.

■ Istanbul Financial Centre – a new economic development area that will be dedicated to position Istanbul as a major financial centre globally

FINANCIAL HUB Istanbul (ranked 64th globally)

KEY ECONOMIC DEVELOPMENT STRATEGY Vision 2023

ECONOMIC OVERVIEW Despite the country's challenges, such as the declining Lira (its currency) and the large earthquake that killed thousands of people this year, the country is still a high-middle income nation with various prospects and is home to a large population. Its unique history and geographical location make it the gateway between East and West, which it has been for centuries. Istanbul, one of the largest cities in the world, is currently undergoing investment, particularly in its Istanbul Financial Centre, which upon completion aims to have over 100,000 workers and visitors daily and position Istanbul as a leading global financial hub. In terms of tech and wider entrepreneurship, the country, particularly Istanbul, has seen tremendous growth in startups, with 65 accelerator programmes in 2020 (compared to six in 2010). The country also now boasts 38 co-working spaces and 82 incubation centres. As of November 2021, the country had nine angel investor networks, and the government-sponsored angel accreditation programme had 674 angel investors. Despite not producing a single unicorn by 2020, it has now produced six, including gametech Dream Games. Istanbul's success is reflected in Startup Genome's 2021 report comparing global startup ecosystems, with the city ranking 15th among the top 100.

85,658,760 Population in millions

85,0658.8

FINTECH OVERVIEW The decline of the Turkish lira has seen crypto grow in popularity. According to Chainalysis' 2021 Geography of Cryptocurrency Report, Turkey was the second highestranked country in the Middle East. In transaction volume, Turkey led the Middle East with over $130billion.

Despite the negative press in 2021, with crypto houses like Vebitcoin shutting down, cryptocurrencies remain popular. Fintech regulations in Turkey, for the most part, are harmonised with EU regulations (e.g. the Payment Law is equivalent to the First Payment Services Directive (FPSD)). However, it is not yet aligned with the Second Payment Services Directive.

There are 520 fintechs and 56 accredited payment and e-money fintechs, as well as five accredited equity-based crowdfunding platforms. Also, around nine per cent of new startups in Turkey are estimated to be fintechs annually.

According to the Finance Office of the Presidency of the Republic of Türkiye website, "[They] consider making Türkiye one of the most important and prominent countries in the field of fintech as one of the most important goals of the Office."

There are almost 83 million credit cards in the country, putting it seventh globally for credit card use and ninth globally for the number of credit card transactions. There are seven million POS devices (48 per cent in-store contactless payments) and over 70 million active online banking customers.

BREAKDOWN OF SECTOR

Fintechs in Turkiye (520 fintechs total)

EXAMPLE OF FINTECHS

■ Papara , Moka and Param .

OVERALL FINTECH HUB STATUS: ONES TO WATCH – TIER-TWO (HIGHER-END) CATEGORY

164,728.38

KEY ORGANISATIONS

■ Bank of Uganda (BoU) – country’s central bank

■ Financial Technology Service Providers’ Association (FITSPA) – the umbrella body for fintechs in Uganda

■ Financial Sector Deepening Uganda (FSDU) – independent non-profit focusing on leveraging digital finance for improved livelihoods, better wellbeing, and sustainable growth in Uganda

■ Uganda Investment Authority – Investment promotional agency

CAPITAL & FINANCIAL HUB Kampala

KEY ECONOMIC DEVELOPMENT STRATEGY Uganda Vision 2030

ECONOMIC OVERVIEW The Ugandan economy grew by 4.6 per cent last year, which was faster than anticipated due to an increase in activity after the economy reopened in January 2022 following one of the world's strictest lockdowns due to Covid-19. Despite its rebound, challenges remain, such as the recent outbreak of Ebola last year, which threatened further economic recovery due to the pandemic.

Like much of the rest of Africa, Uganda has been overshadowed in particular by the big four – Nigeria, South Africa, Egypt, and Kenya – but it has been active in growing its wider tech and startup scene. Safeboda (now a superapp that initially focused on boda taxis) and Numida – both Ugandan companies – received significant funding from the likes of Google Fund and Y Combinator Accelerator (the former investing in Safeboda and the latter in Numida). Additionally, the Ugandan tech scene continues to flourish with startups emerging in areas such as e-commerce, mobility, e-health, cleantech, and fintech. The country was one of the top 15 in Africa that received significant equity funding in 2021.

FINTECH OVERVIEW First, regarding payments, mobile money dominates the ecosystem in Uganda. Players in the country include aggregators who provide mobile wallets, telecoms who offer mobile money platforms, and banks who offer mobile wallet solutions or executive account services. Together, they serve utilities, bank-to-consumer, e-commerce, and end-user retail payments. Uganda also has a growing number of mobile and digital wallet providers keen on tapping into the payments subsector.

Secondly, regarding savings and lending, fintechs dominate in niche markets such as asset lending, solar, agro-business, microloans, and savings. Fintechs have capitalised on their understanding of traditional Ugandan SACCOs and microfinance

structures to offer digital transformation solutions.

Thirdly, e-commerce has grown, and this has further accelerated during the pandemic. As Uganda had one of the world's longest lockdowns during Covid, the Deloitte report saw Ugandan players such as Safeboda and Jumia grow, in addition to new entrants like Glovo. The disparity of its popularity is still evident, with its reliance on the internet, whereby Kampala has higher smartphone usage compared to the rest of the country.

Fourthly, regarding remittances, mobile money has helped the unbanked in the country with fintechs like Airtel Money, MTN Mobile Money, Eversend, and others enhancing interconnectivity between financial institutions, businesses, and end-consumers via mobile and digital wallets. According to the source, mobile money penetration has grown at a fast pace with over 30 million registered customers and a transaction value of Ugandan Shillings UGX79.8trillion ($21billion) in 2020 compared to 0.6 million customers and transactions worth UG 133billion ($36million) in 2015. As many Ugandans work abroad and send much of their money back home, this is why mobile money is dominating remittances in the country.

Finally, regulations have shifted from traditional banking to more mobile money, as well as more comprehensive open-ended financial regulations. This was highlighted in last year’s report. The country’s policies include the National Payment Systems Act, whereby the Bank of Uganda promotes payment systems in the country and deployed fintech licences and sandboxes to help promote innovation and regulate it.

BREAKDOWN OF SECTOR

Fintechs in Uganda (percentage)

EXAMPLE OF FINTECHS

■ Pivot Payments, Dusupay and Tugende

OVERALL FINTECH HUB STATUS: EARLY-STAGE FINTECH HUB – TIER-THREE (HIGHER-END “MARKET TO WATCH”)

UNITED ARAB EMIRATES (UAE)

KEY ORGANISATIONS

■ Central Bank of the UAE (CBUAE) – country’s central bank

■ Dubai International Financial Centre (DIFC) – freezone mainly promoting Dubai’s financial centre (contributes 12 per cent of Dubai’s overall GDP) – home to DIFC Fintech Hive – main fintech catalyst for Dubai

■ Abu Dhabi Global Market (ADGM) – freezone promoting Abu Dhabi’s financial centre and home to Hub 71, main startup catalyst for Abu Dhabi

■ Dubai FDI & Abu Dhabi Investment Office (ADIO) – main investment promotional agencies for Dubai (former) and Abu Dhabi (latter)

■ UAE Insurance Authority – authority overseeing insurance sector

■ UAE Securities & Commodities Authority – country’s securities and commodities authority

■ MENA Fintech Association – fintech association based in the UAE

■ Dubai Multi Commodities Centre (DMCC) – freezone in Dubai; attract crypto companies in recent memory

■ Emirates Development Bank – development bank of the UAE

■ Ministry of Artificial Intelligence – UAE has the first minister of artificial intelligence in the world

FINANCIAL HUBS

Dubai (ranked 17th globally) and Abu Dhabi

– also UAE’s capital city (ranked 31st globally) – only country in MEA to rank in top 50 globally and with two cities as well.

KEY ECONOMIC DEVELOPMENT STRATEGY UAE Centennial 2071, UAE Vision 2021, Abu Dhabi Vision 2030, Smart Dubai 2021, Emirates Blockchain Strategy 2021, UAE National Strategy for Artificial Intelligence (AI) 2031, Dubai Metaverse Strategy

blockchain to even the metaverse, formulating a strong role in the future of its economic diversification and development. It has one of the highest rates of digitalisation in MEA and is the highest Arab country and one of the top in the world to be a leading digitalfriendly nation. In terms of startups, Dubai now accounts for 57 per cent of scaleup funding in the MENA region, while the emirate is home to 39 per cent of the region's scaleups, according to a new report developed by the Dubai Chamber of Digital Economy in cooperation with Mind the Bridge and Crunchbase.

FINTECH OVERVIEW Dubai alone is estimated to have at least half of MENA's total fintechs. Abu Dhabi has been making inroads and also investing heavily and promoting the sector, making the UAE a leading point of fintech. This year, the CBUAE launched a Financial Infrastructure Transformation (FIT) programme in an effort to accelerate the digital transformation of financial services in the region. The goal of the FIT programme is to support the financial services sector and promote digital transactions in the UAE. The programme's end goal is to support the UAE in becoming a global financial and digital payment hub. The challenge for the UAE will be, as others in the region, particularly Saudi Arabia, are growing their fintech ecosystems, to continue its lead in fintech to further attract foreign fintechs and foster new innovative solutions that are coming directly from the country. CBUAE began implementing its 'Digital Dirham' earlier this year.

BREAKDOWN OF SECTOR

Fintechs in UAE (sample of 136 fintechs).

ECONOMIC OVERVIEW

The UAE is a leading economy in the MEA region, home to the regional hubs of Dubai and Abu Dhabi. Its growth can be seen in the developed economy it currently hosts, with 90 per cent of the population not even from the UAE. The UAE is very advanced and connected and is aspiring to be a leader in digital and pivot to be a leading part of its future growth and economic development. Its population is over 10 million people, with internet penetration of 99 per cent of its total population and 17 million mobile connections in the country beginning last year. Additionally, 85 per cent of the population is financially included with at least access to one formal financial service. The UAE has launched various strategies that aim for aspects of digital, from

9,490,258 Population in millions

$44,315.60

155 Number of VC deals

■ Payments, ewallets & remittances (39%)

■ Lending (8.08%)

■ Wealtech (6.6%)

■ Other (21.33%)

EXAMPLE OF FINTECHS

■ Tabby, Sarwa and Souqalmal

■ Insurtech (11.76%)

■ Blockchain/crypto (7.35%)

■ Digital and neobanks (5.88%)

OVERALL FINTECH HUB STATUS: EARLY-STAGE FINTECH HUB – TIER-ONE CATEGORY

20,409.16

5 Unicorns

The rise of fintech with DIFC Innovation Hub

Dubai International Financial Centre (DIFC), a financial free zone in the United Arab Emirates, was established in 2004 to provide a platform for financial institutions and businesses to operate in a regulatory environment that meets international standards. DIFC has gone on to become a leading global financial centre in the Middle East, Africa and South Asia and has played a significant role in developing the UAE’s financial services sector.

In recent years, DIFC has put the spotlight on developing the fintech sector in the UAE, establishing several initiatives and partnerships to support the growth of fintech companies in the region. For example, it established the Fintech Hive accelerator programme, which provides mentorship and support to fintech startups in the region. It has already accelerated more than 200 startups to date, which have collectively raised more than $530million.

DIFC also recently announced the launch of its venture building platform ‘DIFC Launchpad’ to accelerate growth of innovative startups and scaleups. DIFC Launchpad expects to support the launch of over 200 new ventures in Dubai, create more than 8,000 new jobs and attract over AED2billion in venture capital as part of the Dubai Economic Agenda (D33) to position Dubai in the top four global financial centres.

“Innovation is at the centre of transformative change,” explains Arif Amiri, CEO, DIFC Authority. “The DIFC Launchpad presents a unique opportunity for entrepreneurs, venture studios and corporations from around the world to access the support and resources they need to grow and

succeed, powered by DIFC Innovation Hub. DIFC Launchpad is creating a platform that leverages our unique position in the ecosystem to help members identify and structure impactful partnerships, investments, and co-creation opportunities.”

DIFC’s work in fintech has helped to position the UAE as a leading fintech hub in the Middle East, as well as attracting significant investment in the sector. Additionally, the DIFC’s regulatory framework has helped to create a secure and stable environment for fintechs to operate in.

Mohammad Alblooshi, head of DIFC Innovation Hub & FinTech Hive (right), says: "At the moment, our main focus is on talent, as it's a key requirement for us as we grow and expand the ecosystem. We're also looking at how we can support fintechs in the region to scale up and go global. So, we're working on partnerships and collaborations with other fintech hubs and organisations around the world to provide more opportunities for our fintechs to grow and expand."

Chapter Four The future of fintech in the Middle East and Africa and beyond

he final chapter of this report will examine the future direction of fintech, with a specific focus on partnerships. This will be followed by our top 10 predictions for the region. We will also reevaluate the strategic framework introduced in the previous version of this report to determine the future of fintech in MEA. Finally, the chapter will conclude with an overall summary.

a.To partner and not?

The emergence of financial technologies has disrupted the global economy, especially traditional financial services, and has created a partnership opportunity for not just fintechs and financial services firms but also other stakeholders, such as telecommunications companies and non-financial institutions, in the MEA region.

For fintechs in MEA, partnerships with established financial institutions or even other fintechs can be beneficial, given the varying regulations and licences in each country. Traditional financial services firms can use their existing relationships with regulators and licences to the advantage of fintechs. On the other hand, fintechs can provide financial institutions with a more enhanced customer experience, which is increasingly in demand globally and further fuelled by the pandemic.

According to a survey in 2019, 49 per cent of global institutions considered fintech partnerships important, with 21 per cent rating them as ‘very important’ and 28 per cent as ‘somewhat important’. By the end of 2021, this figure had ballooned to 89 per cent, with 48 per

cent rating them as ‘very important’ and 41 per cent as ‘somewhat important’. In recent years, 65 per cent of banks and credit unions have partnered with at least one fintech, with the objective of increasing loan volume and productivity and new product development being the most frequently cited reasons.

In MEA, financial institutions are exploring various ways to progress, including developing their own solutions, forming partnerships, and looking for mergers and acquisitions. Given the vastness of the region, partnerships are often the most scalable option. In terms of M&As, various deals have been

partnered with Mastercard to offer payment cards to tech-enabled companies, including fintechs in the country. This partnership enables tech companies to issue their card propositions through DTB using Mastercard's technology.

In the fintech for good sector, the Unstoppable Women of Web3 (Unstoppable WoW3) education group aims to bring free masterclasses, learning resources, and networking opportunities to Africa, with support from 26 companies, including Polygon Labs, NFT Domains, African Leadership Group, and Africa Women CEOs Network.

UAE-based fintech Zywa has entered a strategic partnership with Mastercard to enable its Gen Z user base to save towards their financial goals, send and receive money, split bills with friends, pay bills and shop online.

Foreign non-MEA fintechs have also joined the fray. For example, Dubai-based Al Etihad Credit Bureau (AECB), which provides information and analytics to support credit decisions, has formed a strategic partnership with UK-based cross-border credit reference provider Nova Credit. This partnership aims to allow newcomers to leverage their credit history from their home country when applying for financial services in the UAE.

Lastly, Western Union has partnered with payment gateway MFS Africa to enable money transfers into millions of mobile wallets across Africa from over 200 countries and territories. The payment service, set to launch in Madagascar, has plans to expand to other countries across the continent. The collaboration between Western Union and MFS Africa aims to make transacting across the continent easier through the retailer's mobile app or website.

made in recent years, including Mashreq Bank, a UAE financial institution, taking a stake in the only BaaS provider NymCard, and Western Union acquiring a minority share in stc pay (now stc Bank) from Saudi Arabia.

In 2023, major fintech headlines in MEA include Saudi Arabian fintech Hala acquiring UAE-based fintech Paymennt.com, which offers SMEs a platform to support their offline-to-online journey via an integrated online payment solution. Additionally, Cross Switch, a pan-African payment company, acquired a 50 per cent stake in Morocco’s fintech company Vantage Payment Systems (VPS).

When it comes to partnerships, the list seems endless, even within the year since this report was written in March. For example, Dubai-based Network International, a digital commerce enabler, has teamed up with Carrefour to implement 'Face Pay', a payment verification platform by consumer authentication service provider PopID. This implementation means that Carrefour customers in Deira and Amsaf can now buy food, essentials, and more using PopID's Face Pay. To use this new facial verification feature, customers can enrol for the service through the retailer's mobile app or website.

In the financial industry, Diamond Trust Bank (DTB) in Kenya has

Despite the progress made with partnerships, there is still room for further collaboration in the MEA financial services industry. As previously highlighted in this report, digitalisation is crucial for the industry to remain competitive. A 2020 study by Deloitte found that while 82 per cent of Middle East banking customers surveyed were willing to start using fintech solutions, only around a quarter of them were actually using fintech solutions.

As the region has potential for untapped opportunities, such as embedded finance, there is an opportunity for fintechs to experience new growth. Last year, the industry was estimated to be worth $10billion, and it is expected to quadruple to $40billion by the end of the decade. By 2029, revenues are expected to reach nearly $40billion.

Despite the challenges posed by the global economy, partnerships remain a promising way forward in a large and diverse region like MEA. They can help pave the way for future opportunities and growth.

In MEA, financial institutions are exploring various ways to progress, including developing their own solutions, forming partnerships, and looking for mergers and acquisitions.

Given the vastness of the region, partnerships are often the most scalable option

b.10 predictions of fintech in MEA for the following year and beyond

he following represents the 10 predictions for this year from our previous report. While the year is still ongoing, we will maintain these predictions and provide commentary on their current validity as of March.

The current global economic challenges, including the ongoing war in Ukraine and its indirect impacts such as inflation and the energy crisis, are affecting many regions, including MEA.

As highlighted in the previous subsection, partnerships between fintechs and financial institutions, as well as other types of partnerships, appear to be thriving in the MEA region. This prediction from the last report continues to hold true.

Brain drain is becoming a significant concern for the region, particularly in Africa, where the Russia-Ukraine conflict has led to reduced supplies of food and commodities, exacerbating existing challenges such as famines, droughts, and currency devaluations in countries like Kenya, Lebanon, and Egypt.

In times of economic uncertainty, these factors increase the likelihood of individuals leaving their home countries in search of better opportunities elsewhere. This prediction is therefore still valid.

Regulatory challenges persist for fintechs and the wider financial services and tech sector in the MEA region, as discussed in the previous version of this report. However, the Covid-19 pandemic and the increasing digitalisation of the industry have spurred efforts to improve regulations. A survey in the MENA region showed that most regulators now perceive fintech as supportive in market development, promoting financial inclusion, and promoting competition.

In addition, almost half of the regulators surveyed have introduced new measures related to KYC, AML, digital identity, economic relief, business continuity, and cybersecurity. Overall, this prediction from the last report appears to remain valid.

Mobile money, which was once confined to East Africa, particularly in Kenya, has now proliferated throughout the world. Its influence and success can be seen in this report where many fintech sub-sectors have been heavily impacted by the widespread use of mobile phones and mobile money. The basic USSD technology has allowed millions of Africans to access financial services that were previously unavailable to them.

As mobile money continues to gain momentum, its popularity in Africa will drive much of the growth in the fintech industry. Even countries that have yet to fully embrace mobile money or have limited players in the market, are seeing potential for growth. For example, Ethiopia has recently opened up its mobile money sector to non-Ethiopian companies such as M-Pesa, indicating the potential for mobile money to expand in the country. Therefore this prediction is true.

1 PARTNERSHIPS BETWEEN THE FINANCIAL SERVICES INDUSTRY AND FINTECHS WILL CONTINUE TO THRIVE BUT M&A s

2 REGULATORY WILL REMAIN TO BE A CHALLENGE FOR MANY FINTECHS AND THE WIDER FS AND TECH SECTOR

3 BRAIN DRAIN WILL CONTINUE TO BE A CHALLENGE IN THE REGION

4 MOBILE MONEY WILL CONTINUE DRIVING MUCH OF THE GROWTH ESPECIALLY IN AFRICA

As mentioned in prediction three, the global economy has been impacting various sectors, including fintech and wider tech and digital industries. The recent collapse of Silicon Valley Bank in March has been one of the biggest global headlines that have affected the tech sector, indicating the challenging times even in once unstoppable industries.

However, despite the negative impact of global issues, such as the ongoing Covid-19 pandemic, it has also allowed for many countries, including those in the MEA region, to move forward with economic recovery and soften some of the negative impacts.

Although challenges remain at a regional and country level, such as political and economic factors, droughts, famines, and other unique challenges, such as sanctions in Iran or a weak Lebanese Lira and now weak financial sectors. Therefore, this prediction is still valid.

slower than expected growth, especially in the midst of an uncertain economic landscape.

This trend has also affected fintech companies across the region, as highlighted throughout this report. Many have had to slow down their hiring process, freeze hiring altogether, or lay off employees. Unfortunately, this prediction still holds true.

8 PAYMENTS WILL STILL DOMINATE BUT NON-PAYMENTS (SUCH AS CRYPTOCURRENCIES) WILL GROW

The payments, money transfers, and remittances sector is projected to continue its significant growth in MEA, and so are the non-payments, money transfers, and remittances subsectors.

As Chapter Two highlighted, these subsectors show great potential for growth in the region, as many of them are still in their early stages, whether it be increasing access for the underserved or unserved, or further digitialising offerings like wealth management. This trend remains unchanged, as the offering appears to be expanding across both verticals.

While this is a long-term aspiration, there has been a recent success story in the MEA region (excluding Israel and Turkey), with Egypt's MNT-Halan becoming a new fintech unicorn since the last version of this report. It is predicted that more unicorns will emerge from this region in the future, beyond the primarily Israel-focused landscape we've seen so far.

The success of African and Turkish fintech companies – with the former seeing six unicorns emerge in just six years – demonstrates the potential for growth in the wider MEA region.

Fintech has already taken up half of the total VC percentage this year and has been the main source of unicorns on the continent. With a growing market demand for fintech products and solutions, coupled with government support for economic development strategies, the acceleration of unicorns in the MEA region is expected to continue.

This will require the support of accelerators, incubators, VCs, angel investors, mentors, and other key players to build a robust ecosystem for fintech startups in the region.

Therefore, while this is a long-term investment, the prediction that more unicorns will emerge from the MEA region still stands.

The rise of ‘super apps’ is playing a strong role in fintech in MEA, and they are increasingly offering payment solutions that include lending, e-commerce, and delivery. Third-party players like telecoms or financial services providers, whether on their own or through M&A or partnerships, are also offering new avenues via fintech (e.g., M-Pesa in Kenya or Safeboda in Uganda). This further expands the potential for growth and innovation in the region's fintech ecosystem. Therefore, this prediction is still valid.

9 GROWTH WILL BE FILTERED DOWN THROUGH THE REGION'S WIDER ECONOMIC DEVELOPMENT GROWTH

The future growth and acceleration of fintech in the MEA region will depend on the success of economic development strategies, both organic and government-led. The growth of fintech will not only diversify its offerings but also drive cutting-edge technology. In Africa, where mobile money has been a driving force, economic development can help lift people out of poverty and increase demand for fintech solutions tailored to the growing middle class. Therefore, this remains to be valid.

10 FINANCIAL INCLUSION WILL CONTINUE TO PLAY A LARGE NARRATIVE IN THE REGION DUE TO MANY UNBANKED AND UNDERSERVED

The term ‘layoffs’ has become all too common in the tech industry in recent years. Even the largest tech giants like Google, Facebook, and Amazon have been forced to lay off workers globally due to

As highlighted in this report, the majority in Africa (57 per cent) and the Arab World (69 per cent) are unbanked. Much of the narrative of this report has been around this theme and plays a strong part of the fintech narrative in emerging markets in general. Therefore, this remains to be valid.

6 MORE UNICORNS TO COME FROM THE MEA REGION

MEA2023: THE FUTURE OF FINTECH

7 MORE POTENTIAL LAYOFFS IN FINTECH

5 THE GLOBAL ECONOMY WITH ONGOING INFLATION AND RECESSION WORRIES WILL AFFECT FINTECH

c. A reflection of a framework and key considerations for the Middle East and Africa

his section was first presented in the 2022 edition of this report, where the following five pillars (and their sub-themes) highlighted the necessary conditions for overall digital transformation and economic development in the MEA region. Does it still hold true in 2023? Absolutely. Typically, when devising a regional strategy as vast as MEA, its implementation and validity generally last for an average of five years before requiring a refresh.

The following elaborates on these pillars for those who have not seen the previous version of this report:

PILLAR ONE : REGULATORY AND BUSINESS FRIENDLY ENVIRONMENT

Fintech requires an environment where legislation protects both consumers and businesses. The latter should feel that they are operating in a supportive environment that allows them to thrive and expand, increasing both local players and attracting foreign direct investment (FDI). Considerations include:

■ Easier licences for sub-sectors: A complication for many globally and in MEA is the difficulty of obtaining licences, especially in the fast-paced changing environment of fintech with the popularity of cryptocurrencies and BNPL. As fintech is increasingly used cross-border (and in cases like the UAE) within the same country, obtaining necessary licences is crucial.

■ Develop more incentives – Governments should create more fintech-specific initiatives, such as regulatory sandboxes or frameworks and implementation around open banking and finance. This includes promoting the creation of a wider ecosystem to cater to the sector, such as catalysts and incubators.

■ Policies to boost FDI – There should be policies in place that promote the expansion of fintechs in their respective countries so that local players feel confident to expand and stay there. This includes investment promotional agencies (IPAs) prioritising the sector, special economic zones (SEZs), and attracting venture capitalists (VCs), among others.

PILLAR TWO: TALENT FOSTERING & RETENTION

Talent is often regarded as one of the major challenges of businesses in fintech and wider tech beyond just compliance and regulations. This could be achieved with the following:

■ Increase entrepreneurship – for regions like the GCC with high rates of civil servants, the changes and encouragement to be entrepreneurship will be vital so that future youths will aspire to become entrepreneurs in sectors like fintech.

■ More tech degrees – in addition to boosting entrepreneurship there needs to be further push in degrees that cater to the wider digital economy – from IT to coding to even fintech.

Source:

■ Reverse brain drain – policies, rising living standards (especially now) and economic opportunities need to come so that the best and brightest do not continue to keep leaving their respective country for wealthier MEA nations or the West.

PILLAR THREE: FINANCIAL LITERACY & EDUCATION

Financial literacy and education are crucial for the widespread adoption of fintech by the masses. This presents a challenge in regions where a significant proportion of the population are financially excluded and may not know how to read or write. However, financial literacy is still vital. The following actions should be taken:

■ Increase general financial literacy – Financial literacy, in general, is critical and should be prioritised, even in primary and secondary school. This includes educating individuals on topics such as savings and remittances, without necessarily focusing on specific technologies.

■ Increase fintech awareness – Many people worldwide, including those in the Middle East and Africa, are using fintech without realising it. Educating individuals about financial technologies and their benefits, particularly those who are financially excluded, such as blue-collar workers, rural farmers, and micro-businesses in the MEA region, can help improve awareness.

■ Increase the culture of savings and investment – As mentioned earlier, there is a gap in the culture of savings and investment, such as in the stock market, in much of the MEA region. Educating individuals on the benefits of savings and investments can help create opportunities.

PILLAR FOUR: PROMOTE INFRASTRUCTURE

To fully embrace the benefits of fintech and other digital products and offerings, the Middle East and Africa region needs to prioritise both its digital and physical infrastructure, particularly in less affluent areas that lack basic digital infrastructure or have limited financial infrastructure in rural areas. The following actions can help achieve this:

Riyadh Tower and the Kingdom of Saudi Arabia at night

■ Increase internet access (also 5G) – Improving internet access, including 4G and 5G, should be a priority. Addressing the lack of basic internet in rural and poorer parts of MEA can also help bridge the digital divide.

■ Increase smartphone accessibility – Providing access to smartphones in less affluent parts of MEA and among bluecollar workers in rich parts can promote the adoption of new technologies and move away from basic USSD technologies.

■ Foster new ideas – The MEA region should be open to new technologies that can have an impact on fintech. Encouraging innovation and creativity can help drive the development of new solutions and ideas.

PILLAR FIVE: MSME PRIORITISATION & ENGAGEMENT

Financial exclusion is not just a challenge for individuals but also for micro, small, and medium enterprises (MSMEs) in the Middle East and Africa region.

Despite contributing significantly to both the formal and informal (or ‘gig’) economies, MSMEs often struggle to access basic

financial services to start or grow their businesses. To address this issue, the following actions should be taken:

■ MSME and industry dialogues – Regular dialogues between the wider financial services industry, technology disruptors like fintech, and businesses – both large and small - should be encouraged. It is particularly important to include small and micro-businesses in these conversations, given the significant role played by the informal economy in the region.

■ MSMEs financial access – There should be commitments and initiatives from traditional financial services and fintechs to boost the financially excluded MSMEs. This includes ensuring that historically excluded groups, such as farmers and womenowned businesses, have access to finance.

■ Reduce rejection rates for MSMEs – There needs to be a commitment to reducing the rejection rate for MSMEs. This will reduce bureaucracy, red tape, and hurdles when applying for a loan, increasing their chances of approval.

d: Final summary

he role of fintech in the Middle East and Africa is both complex and simple, as the report has hopefully highlighted. The region is diverse in terms of wealth, cultures, economies and regions, yet all generally share similarities. Much growth is yet to come, but there are still successes to celebrate.

Since the last edition of this report in 2022, the global world order has changed significantly. The war in Ukraine continues to drag on, bringing ongoing challenges that the world has faced, including inflation, an energy crisis, and food shortages, such as wheat from Ukraine and Russia. This is in addition to the challenges of recovering from the Covid-19 pandemic and other destabilising factors.

The wider tech world, which until recently had not faced such global uncertainty since the internet bubble in 2000, has also seen itself scaling back or downsizing. To add to the instability, Silicon Valley Bank went under in March, a player that had played a significant role in the financial services sector, particularly in the tech and startup space.

Despite the challenges faced in the global fintech sector, the MEA region has benefitted from high oil prices, which have further accelerated economic development transformations, particularly in the Gulf Cooperation Council (GCC) countries. The region also has a unique position to drive financial inclusion, including through the involvement of the rich sovereign wealth funds of the Gulf in global fintech investments, and the continued efforts to boost financial access and inclusion in the underserved and excluded parts of MEA.

While fintech in MEA is still in its infancy, it has already addressed challenges and opportunities across many demographics in the region. MEA has one of the world's busiest corridors of migrant workers, with many moving to other MEA countries such as South Africa or Kenya, but primarily to rich Gulf countries and Israel, as well as other parts of the world such as South Asia and Southeast Asia. Additionally, the population of MEA is very young, with a relatively high overall mobile phone usage, particularly among the wealthy who have some of the world's highest smartphone usage. Despite these factors, financial exclusion remains a massive challenge in the region.

Fintech developments in the MEA region have largely been driven by the need to address financial inclusion, resulting in the

emergence of various technologies ranging from basic USSD to cryptocurrencies. While regulators in the region are trying to catch up, challenges still persist, and education on financial services and digital infrastructure needs to be accelerated to benefit the diverse MEA region.

Although not much has changed with respect to the fintech hubs since the last report, with most accelerating their agendas, Lebanon remains an exception as it continues to struggle economically.

Ideally, future reports will not have to mention words such as coronavirus, inflation, and war, but instead, focus on fintech and financial inclusion. On a positive note, the present and future remain open for fintech and financial inclusion in the MEA region.

The region has a unique position to drive financial inclusion, including through the involvement of the rich sovereign wealth funds of the Gulf in global fintech investments

Richie Santosdiaz and the MEA 2023 Report team at The Fintech Times

Chapter Five Appendix

i. 23 Countries' findings supplement

The following are supporting documents for the methodology outlined in Chapter Three. It breaks down the results and calculators that derived the Tier-Three fintech hubs. Below are the final results of the study:

ECONOMIC

DEVELOPMENT – ECONOMIC AND SOCIAL

Based on available data, a sample of economic and social indicators was used to understand the chosen MEA countries. The total scoring was weighted at 5wa0 per cent overall, and this is reflected in the 'Wider Economic Development' column. All countries, except Mauritius due to the availability of data, were able to be scored on all six indicators available (Mauritius 5/6):

■ Higher education enrollment –The number of college-educated people in the country to assess human capital.

■ Entrepreneurship – Available public data from the Global Entrepreneurship and Development Institute 2018 Report helped grasp this in MEA – its score of 0 to 100 was used with 100 being the highest.

■ Ease of doing business – Overall ease of doing business in the country? The baseline of a World Bank Doing Business Report was used, whereby it was given a score of 0 to 100, with 100 being the highest. 4.

ECONOMIC DEVELOPMENT – TECH, DIGITAL AND FINTECH

Based on available data, the following sample data of tech and digital ecosystems as well as fintech-specific were gathered. Tech and digital received a total weight of 20 per cent, while fintech-specific received 30 per cent.

■ Number of startups – How many startups are based in the country? 7.

ECONOMIC DEVELOPMENT –

Range is out of a score from 0-100

■ Population – A quantitative metric is needed, and population is good to determine the size of the country. The larger the population, the larger the score.

■ Number of tech/startups (factoring in population) – A holistic approach is needed, so the number of tech/startups also has its indicator that takes into account the number of startup/tech companies per person.

■ Number of fintech companies

– Similar to the tech/startup indicator, the number of fintech companies in the country

■ Human development index (HDI) – A human development index was factored in via public data from the United Nations Development Programme (UNDP) 2020 Human Development statistics. The score is 10 being the highest possible human development and 0 being the least.

■ Venture capitalist deals – How many VC deals were done in the ecosystem?

■ Number of fintech companies (factoring in population) – A holistic approach is needed, so the number of fintechs also has its indicator that takes into account the number of fintechs per person. 12.

■ Unicorns – Has the country produced a fintech unicorn.

Endnotes

Chapter One

ECONOMIES OVERVIEW

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://blogs.worldbank.org/opendata/new-world-bank-countryclassifications-income-level-2021-2022

● https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-worldbank-country-and-lending-groups

● https://data.worldbank.org/indicator/NY.GNP.PCAP.CD

● https://worldpopulationreview.com/country-rankings/gni-per-capita-by-country

● https://ccsenet.org/journal/index.php/ijbm/article/view/0/45060

FINANCIAL SERVICES OVERVIEW

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.zawya.com/en/press-release/one-million-small-and-mediumbusinesses-across-the-middle-east-and-africa-to-benefit-from-free-resourcesand-ob1u896b

● https://www.worldbank.org/en/topic/smefinance

● https://www.weforum.org/agenda/2021/11/improving-access-to-finance-forbusinesses-mena-region/

● https://www.imf.org/-/media/Files/Publications/REO/AFR/2017/May/pdf/ sreo0517-chap3.ashx

● https://innovation-entrepreneurship.springeropen.com/articles/10.1186/ s13731-022-00221-8

● https://ccsenet.org/journal/index.php/ijbm/article/view/0/45060

● S&P Global Ratings GCC Insurers 2023 Report

TECH AND STARTUPS

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://techcrunch.com/2023/01/27/how-african-startups-raised-venturecapital-in-2022/

● https://www.forbes.com/sites/afshinmolavi/2023/02/15/middle-east-techstartups-are-a-hot-emerging-market/?sh=61e9ad3943c5

● https://www.vccafe.com/2023/01/02/israeli-tech-ecosystem-2022-year-endreports-and-what-to-expect-in-2023/

● https://www.arabianbusiness.com/industries/banking-finance/top-10-biggestsovereign-wealth-funds-in-gcc

● https://www.ft.com/content/33a985a5-6955-4f44-869f-82e82e620581

● https://www.bloomberg.com/news/articles/2023-01-16/qatar-fund-toreposition-450-billion-portfolio-amid-turmoil

● https://fastcompanyme.com/fastco-work/saudi-arabia-wants-to-be-a-globaltech-hub-this-event-is-helping-to-achieve-that/

● https://www.dailysabah.com/business/tech/turkish-startups-bag-record-ofnearly-16-billion-in-2022

● https://fintechnews.africa/40003/fintech-nigeria/tech-unicorns-in-africacome-from-fintech/

● https://www.arabianbusiness.com/startup/revealed-middle-east-unicorns-tosurge-to-250-by-2030#:~:text=MENA%20is%20currently%20home%20to,as%20 many%20as%2045%20soonicorns.

● https://www.arabianbusiness.com/industries/banking-finance/top-10-biggestsovereign-wealth-funds-in-gcc

THE MEA CONSUMER

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.worldbank.org/en/news/press-release/2022/11/30/remittancesgrow-5-percent-2022report/#:~:text=Remittances%20to%20low%2D%20and%20 middle,Bank%20Migration%20and%20Development%20Brief.

● https://www.weforum.org/agenda/2023/02/remittances-money-worldbank/#:~:text=Biggest%20remittances%20in%202022&text=Mexico%20is%20 seen%20overtaking%20China,Nigeria%20each%20received%20%2421%20billion.

ECONOMIC DIVERSIFICATION AND DIGITAL ECONOMIC DEVELOPMENT

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://innovation-entrepreneurship.springeropen.com/articles/10.1186/ s13731-022-00221-8

Chapter Two

PAYMENTS, MONEY TRANSFERS AND REMITTANCES

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.spglobal.com/en/research-insights/articles/fintech-s-prospectsin-the-middle-east-and-africa

● https://www.zawya.com/en/business/fintech/crayon-data-and-redington-meapartner-to-boost-africa-fintech-inkl6ypm

● McKinsey & Co – Fintech in Africa: The End of the Beginning Report

INSURTECH

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://fintech.global/2023/01/25/old-mutual-and-covergo-to-drive-digitalinsurance-across-africa/

● https://www.clydeco.com/en/insights/2022/12/2023-to-see-spike-in-m-a-inmiddle-east-insurance

● https://www.arabnews.com/node/2121201/business-economy

DIGITAL, CHALLENGER AND NEOBANKS

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.pymnts.com/news/banking/2023/4-trends-shaping-the-emeabanking-industry-in-2023/

● https://gulfnews.com/business/banking/new-digital-bank-naqd-getspreliminary-approval-from-uae-central-bank-1.94162985

GAMETECH

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● The State of the Turkish Gaming Ecosystem 2022 Report

WEALTHTECH

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● The Wealth Report 2023: Knight Frank

● https://www.thenationalnews.com/business/money/2023/03/01/worlds-ultrawealthy-lost-a-combined-10-trillion-in-2022/

● https://www.credit-suisse.com/about-us/en/reports-research/ global-wealth-report.html

REGTECH

● The Fintech Times – Fintech: Middle East and Africa 2022 Report

● https://popia.co.za/

● Fintech Regulation in the Middle East and North Africa

– Cambridge Judge Business School

● https://www.pwc.com/m1/en/publications/key-trends-shaping-the-future-ofthe-middle-east-insurance-industry.html

DIGITAL CURRENCIES AND CRYPTOCURRENCIES

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● Chainalysis 2022 Geography of Cryptocurrency Report

● https://www.reuters.com/world/middle-east/uaes-central-bank-pilots-cbankdigital-currencies-transactions-2022-10-26/

● https://www.thenationalnews.com/business/cryptocurrencies/2022/11/08/ abu-dhabi-launches-blockchain-and-cryptocurrency-body/

● https://www.news24.com/fin24/markets/kganyago-on-digital-currencyreserve-bank-will-be-a-fast-follower-20230119

MEA2023: APPENDIX

OPEN FINANCE

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.arabnews.com/node/2226576/business-economY

● MENA Fintech Association: Open Finance 2021 Report

● https://finance.yahoo.com/news/open-banking-couldafrica-needs-074800475.html

● https://thefintechtimes.com/wio-bank-officially-launches-in-the-uae/

● https://www.zawya.com/en/press-release/africa-press-releases/anchor-abanking-as-a-service-platform-joins-y-combinators-summer-2022-s22-batchannounces-the-launch-of-n91swgxc

LENDING:

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.un.org/africarenewal/magazine/july-2022/crowdfundingemerging-financing-source-african-entrepreneurs

● https://u.ae/en/information-and-services/business/ crowdfunding#:~:text=In%20March%202022%2C%20the%20UAE, the%20public%20and%20private%20sectors.

● https://www.pymnts.com/news/alternative-financial-services/2019/ why-p2p-could-play-leading-role-in-middle-east-fintech/

Chapter Three

23 COUNTRIES FINDINGS:

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://data.worldbank.org/country/united-arab-emirates

● https://www.timeshighereducation.com/student/where-to-study/study-inunited-arab-emirates

● https://www.oecd-ilibrary.org/docserver/bf1a85fe-en.pdf?expires=1656324310 &id=id&accname=guest&checksum=C46C56D348D6D84EDC6D06027008259A

● https://www.timeshighereducation.com/student/where-to-study/study-in-egypt

● https://data.worldbank.org/indicator/SE.TER.ENRR?end=2019&locations=MA &start=1971&view=chart

● https://www.ceicdata.com/en/nigeria/education-statistics/ng-schoolenrollment-tertiary--gross

● https://www.timeshighereducation.com/student/where-to-study/study-insouth-africa

● https://www.timeshighereducation.com/student/where-to-study/study-in-kenya

● https://tradingeconomics.com/lebanon/percentage-of-enrolment-in-tertiaryeducation-in-private-institutions-percent-wb-data.html#:~:text=Percentage%20 of%20enrolment%20in%20tertiary%20education%20in%20private%20 institutions%20(%25),compiled%20from%20officially%20recognized%20sources.

● https://www.timeshighereducation.com/student/where-to-study/study-in-qatar

● https://www.timeshighereducation.com/student/where-to-study/study-intanzania-united-republic

● https://www.timeshighereducation.com/student/where-to-study/study-in-oman

● https://data.worldbank.org/indicator/SE.TER.ENRR?end=2019&locations=UG& start=1971&view=chart

● https://www.timeshighereducation.com/student/where-to-study/study-in-senegal

● https://data.worldbank.org/indicator/IC.BUS.DFRN.XQ?locations=AE

● https://magnitt.com/en-ma/startups

● Global Entrepreneurship Monitor 2022/2023 Global Report

● https://worldpopulationreview.com/countries

● https://www.forbes.com/sites/forbesbusinesscouncil/2021/07/14/learningfrom-israels-successful-innovation-ecosystem/?sh=325117c738d1

● https://thefintechtimes.com/country-reports/

● https://mcit.gov.eg/Upcont/Documents/Reports%20and%20

Documents_26102021000_Egyptian-Startup-Ecosystem-Report-2021.pdf

● https://magnitt.com/en-ma/startups

● https://vc4a.com/nigeria/

● https://www.statista.com/statistics/1290679/number-of-startups-in-africa-bycountry/#:~:text=The%20number%20of%20startups%20in,in%20the%20 same%20year%2C%20respectively.

● https://startupstash.com/kenyan-startups/#:~:text=How%20Many%20 Startups%20Are%20There,1%2C000%20start%2Dups%20in%20Kenya.

● https://euromenaconsulting.com/insight-details-225#:~:text=Within%20 just%20a%20few%20years,and%20many%20other%20ecosystem%20players.

● https://vc4a.com/ghana/

● https://digestafrica.com/the-most-funded-startups-in-rwanda#:~:text=There%20 are%20a%20variety%20of,of%20Rwanda%20to%20promote%20entrepreneurship.

● https://magnitt.com/en-kw/startups/

● https://www.crunchbase.com/hub/qatar-companies

● http://documents1.worldbank.org/curated/en/905101503998069531/ pdf/119132-REVISED-40p-Dar-es-Salaam-ecosystem-digital-002.pdf

● https://magnitt.com/en-om/startups

● https://startupuniversal.com/country/uganda/

● https://vc4a.com/senegal/

● https://www.crunchbase.com/hub/mauritius-companies

● https://www.arabnews.com/node/2006581/business-economy

● https://www.arabnews.com/node/2006581/business-economy

● https://www.timesofisrael.com/israeli-tech-companies-raised-25-6-billion-inextraordinary-2021-report/

● https://magnitt.com/research/2021-emerging-venture-markets-report-50737

● https://www.egypttoday.com/Article/3/114247/Egypt-s-startups-raise-491macross-147-transactions-hitting-all

● https://partechpartners.com/2021-africa-tech-venture-capital-report/

● https://magnitt.com/en-ae/startups/

● https://u.ae/en/about-the-uae/digital-uae/regulatory-sandboxes-in-theuae#:~:text=The%20Central%20Bank%20of%20the,posing%20challenges%20 for%20the%20insured%2C

● https://www.tamimi.com/law-update-articles/central-bank-bahrain-cbblaunch-regulatory-sandbox-fintech-firms-2/

● https://www.coindesk.com/policy/2022/02/14/israels-securities-regulatorychief-lays-out-crypto-plans/

● https://data.worldbank.org/country/turkey

● https://fintech-egypt.com/sandbox/

● https://www.cgap.org/events/why-regulatory-sandbox-insights-regulatorskenya-morocco-and-philippines#:~:text=The%20Central%20Bank%20of%20 Morocco,to%20focus%20on%20other%20initiatives.

● https://www.cbn.gov.ng/out/2021/ccd/framework%20for%20regulatory%20 sandbox%20operations.pdf

● https://bitcoinassociation.net/centbees-minit-money-joins-south-africas-ifwgregulatory-sandbox/#:~:text=The%20sandbox%20was%20set%20 up,existing%20and%20developing%20regulatory%20frameworks.

● https://thefintechtimes.com/an-overview-of-regulatory-sandboxes-in-themiddle-east-and-africa-region/

● https://beirutdigitaldistrict.com/blog/sandbox-agility-trust-the-fintechdisruption-in-lebanon

● https://medium.com/sahara-ventures/tanzania-fintech-landscape-ad98d1fc2747

● https://cointelegraph.com/news/ugandan-central-bank-u-turns-on-cryptowelcoming-firms-to-regulatory-sandbox

● Fintech Report 2021-2022 Senegal - ICLGhttps://iclg.com› ... › Fintech Laws and Regulations

● https://thefintechtimes.com/an-overview-of-regulatory-sandboxes-in-themiddle-east-and-africa-region/

● https://empowerafrica.com/regulatory-sandboxes-in-africa/

● https://www.investmentmonitor.ai/uae/the-age-of-fintech-in-the-uae

● https://fintechsaudi.com/wp-content/uploads/2021/09/ FintechSaudi_AnnualReport_20_21E1.pdf

● https://theblockchaintest.com/uploads/resources/Bahrain%20FinTech%20 bay%20-%20FinTech%20Ecosystem%20Report%20-%202022%20Feb.pdf

● https://www.fintech-aviv.com/

● https://www.cbfo.gov.tr/sites/default/files/2021-12/ the-state-of-fintech-ecosystem-in-turkiye-2021.pdf

● https://fintechnews.ae/11766/fintechegypt/egypt-amongtop-4-fintech-ecosystems-in-africa/

● https://fintechnews.ae/8210/morocco/morocco-emerges-as-third-largestfintech-hub-in-the-arab-world/#:~:text=Morocco%20is%20the%20third%20 largest,Assist%20the%20Poor%20(CGAP).

● https://tracxn.com/explore/FinTech-Startups-in-Beirut

● https://thebftonline.com/2022/03/17/ghanas-financial-technology-fintech-stateof-play-2022/

● https://www.uncdf.org/article/5262/key-findings-of-fintech-landscape-in-rwanda

● https://tracxn.com/explore/FinTech-Startups-in-Kuwait-City

● https://thefintechtimes.com/country-reports/

● https://www.uncdf.org/Download/AdminFileWithFilename?id=14277&cultureId =127&filename=100521uncdftanzaniafintechmappingreportpdf#:~:text=Und er%20the%20above%20definition%2C%20UNCDF,fintechs%20currently%20 operating%20in%20Tanzania.

● https://magnitt.com/en-om/startups/fintech

● https://www.jbs.cam.ac.uk/wp-content/uploads/2020/08/2018-ccaf-fsd-fintechin-uganda.pdf

● https://www.microsave.net/2020/07/13/inclusive-fintechs-in-francophoneafrica-senegal-country-report/#:~:text=The%20key%20success%20factor%20 for,47%20enablers%20and%20funding%20partners.

● https://investorsmag.net/2019/10/05/60-of-fintech-companies-operating-inmauritius-still-in-an-infancy-stage/#:~:text=19%20fintech%20companies%20 responded%20to,favorable%20tax%20laws%20amongst%20others.

● https://thefintechtimes.com/country-reports/

● https://tracxn.com/explore/FinTech-Startups-in-Tunis

● https://thefintechtimes.com/fintech-landscape-in-ethiopia-in-2022/

● https://www.khaleejtimes.com/local-business/arab-worlds-sole-unicorn-isbased-in-uae, https://www.itp.net/business/97882-dubai-based-startup-zetabecomes-a-unicorn-after-softbank-funding

BAHRAIN

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://fintechnews.ae/11445/bahrain/6-fintech-companies-in-bahrain-youshould-know/

● https://www.pymnts.com/cryptocurrency/2023/binance-bahrain-launchwelcomed-central-bank/

● https://www.cbb.gov.bh/

● Bahrain Fintech Ecosystem Report 2022 – Bahrain Fintech Bay

● Digital Payment Landscape Report 2022 – CBB

EGYPT

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.cbe.org.eg/en/Pages/HighlightsPages/The-Central-Bank-of-Egyptlaunches-the-Financial-Inclusion-Strategy-2022-2025.aspx

● https://fintechnews.africa/40254/fintech-egypt/these-are-the-8-top-fundedfintech-startups-in-egypt/

● Central Bank of Egypt

● Egypt Fintech Landscape Report – Fintech Egypt

ETHIOPIA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://itweb.africa/content/JN1gPvOAAzoMjL6m

● https://disrupt-africa.com/2022/09/12/ethiopian-fintech-startup-chapalaunches-online-payment-gateway-service-for-businesses/

● https://newbusinessethiopia.com/technology/digital-transactions-in-ethiopiato-represent-39-percent-gdp-by-2025/

GHANA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.cia.gov/the-world-factbook/countries/ghana/

● https://practiceguides.chambers.com/practice-guides/fintech-2022/ghana/ trends-and-developments#:~:text=Ghana's%20fintech%20market%20 dominates%20in,dominant%20fintech%20business%20in%20Ghana.

● https://www.independent.co.ug/ghana-nigeria-and-kenya-lead-25-growth-infinance-app-installs/

ISRAEL

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.calcalistech.com/ctechnews/article/b1qf3eacs

● https://www.timesofisrael.com/investment-in-israeli-tech-startups-plunged-byalmost-half-in-2022-data-shows/

● https://www.reuters.com/business/finance/fintech-pagaya-lay-off-20employees-2023-01-18/#:~:text=Jan%2018%20(Reuters)%20%2D%20 Financial,the%20United%20States%20and%20Israel.

● https://en.globes.co.il/en/article-israeli-fintech-co-rapyd-to-lay-offdozens-1001430704

● https://i-aml.com/news/16012023/

● https://fintech.global/2022/11/06/israeli-fintech-deal-activity-set-to-drop-30in-2022/

JORDAN

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.britannica.com/place/Jordan/Economy

● https://jsf.org/sites/default/files/EN%20Jordanian%20Expatriates%20in%20 the%20Gulf.pdf

● https://thestartupscene.me/MenaEcosystems/Jordan-The-Middle-East-sOverlooked-Tech-and-Innovation-Hub

● https://www.magzter.com/stories/Business/Banking-Frontiers/Jordan-SlowlyBuilding-A-Fintech-Ecosystem

● https://fintechnews.ae/4072/fintechjordan/fintech-in-jordan-overview/

● https://tracxn.com/explore/FinTech-Startups-in-Amman

KENYA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://techcabal.com/2023/01/25/mobile-money-spy/

KUWAIT

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://ifnfintech.com/central-bank-of-kuwait-prioritizes-esg-fintech-solutionsfor-sandbox/

● https://www.zawya.com/en/world/middle-east/kfh-two-other-bankspreparing-to-launch-google-pay-in-kuwait-cx4peen0

● https://www.zawya.com/en/business/fintech/cpa-receives-requests-from-3alliances-to-establish-digital-banking-in-kuwait-yrogi3tr

LEBANON

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.worldbank.org/en/country/lebanon/overview

● https://tracxn.com/explore/FinTech-Startups-in-Beirut

MAURITIUS

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://tracxn.com/explore/FinTech-Startups-in-Port-Louis

● https://newsinvasion24.com/mauritius-international-financial-centreconducts-second-leg-of-business-forums-in-india/

● https://www.ifcreview.com/articles/2022/june/mauritius-already-present-forthe-future/

MOROCCO

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.worldbank.org/en/country/morocco/overview

● https://www.britannica.com/place/Morocco/Economy

● https://tracxn.com/explore/FinTech-Startups-in-Casablanca

NIGERIA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://techcabal.com/2022/12/08/opinion-trends-and-predictions-for-africanstartups-in-2023/

● https://techpoint.africa/2023/01/17/predict-fintech-nigeria-2023/

● https://www.bbc.com/news/world-africa-64654312

OMAN

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.britishempire.co.uk/maproom/oman/sultanate.htm

● https://www.zawya.com/en/business/fintech/oman-accelerator-programme-tosupport-innovative-fintech-start-ups-vhyfkuk7

● https://www.f6s.com/companies/fintech/oman/co

● https://thefintechtimes.com/oman-and-its-fintech-environment-in-2022/

QATAR

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.gulf-times.com/story/724272/QFTH-receives-2-300-applicationsfrom-73-countries-QDB-soon-to-offer-green-financing-for-SMEs

● https://www.f6s.com/companies/fintech/qatar/co

● https://dohanews.co/qatar-eyes-sports-and-fintech-amid-investment-shakeup/

● https://thefintechtimes.com/fintech-landscape-of-qatar-in-2022/

RWANDA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.minict.gov.rw/index.php?eID=dumpFile&t=f&f=41306&token=d582 a81725e7b8289f1579fd34e9dbc40b8ad087

● https://ukinvestormagazine.co.uk/how-kigali-international-financial-centre-aimsto-fast-track-rwanda-as-a-preferred-financial-centre-for-investments-in-africa/

● https://www.monkeypesa.com/post/top-fintechs-in-rwanda

● https://thefintechtimes.com/rwanda-and-its-fintech-ecosystem-in-2022/

SAUDI ARABIA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.pinsentmasons.com/out-law/news/saudi-arabia-establishes-openbanking-framework

● https://thefintechtimes.com/saudi-arabia-and-the-fintech-ecosystem-in-2022/

SENEGAL

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.zawya.com/en/economy/africa/senegal-sees-economic-growthrising-to-101-in-2023-ihkppx2i

● https://www.britannica.com/place/Senegal/Economy

● https://tracxn.com/explore/FinTech-Startups-in-Dakar

SOUTH AFRICA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://finovate.com/checking-in-on-fintech-in-africa/

● https://thefintechtimes.com/fintech-landscape-of-south-africa-2022/

TANZANIA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.britannica.com/place/Tanzania/Economy

● https://thefintechtimes.com/tanzania-and-its-fintech-ecosystem-in-2022/

TUNISIA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.statista.com/statistics/1279534/leading-startups-in-tunisia-bytotal-funding/

● https://thefintechtimes.com/fintech-landscape-of-tunisia-in-2022/

● https://venturesafrica.com/disrupt-africa-africas-over-3billion-tech-funding-in2022-and-other-key-highlights/

● https://tracxn.com/explore/FinTech-Startups-in-Tunis

T Ü RKIYE

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.cbfo.gov.tr/en/payment-systems-and-electronic-moneyinstitutions/payment-and-electronic-money-institutions-association-of-turkey

● https://thefintechtimes.com/fintech-landscape-of-turkey-in-2022/

● https://www.dailysabah.com/business/finance/istanbul-finance-center-set-toopen-its-doors-soon-as-economic-hub

● https://www.cnbc.com/2021/04/26/turkish-bitcoin-exchange-vebitcoincollapses-amid-crypto-crackdown.html

● https://param.com.tr/en/about-us

UGANDA

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.who.int/emergencies/situations/ebola-uganda-2022

● https://www.worldbank.org/en/country/uganda/overview

● https://techcrunch.com/2022/03/04/uganda-in-the-spotlight-as-countrysstartups-captivate-yc-google/

● https://thefintechtimes.com/the-fintech-ecosystem-of-uganda/

UNITED ARAB EMIRATES

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://thefintechtimes.com/fintech-ecosystem-of-dubai-in-2022/

● https://thefintechtimes.com/fintech-landscape-of-abu-dhabi-in-2022/

● https://thefintechtimes.com/uae-central-bank-launches-programme-toaccelerate-digital-transformation/

● https://tabby.ai/en-AE/press/series-c

Chapter Four PARTNERSHIPS

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://www.wamda.com/2023/02/hala-acquires-uae-fintech-paymenntcom

● https://www.moroccoworldnews.com/2023/02/354124/africa-based-crossswitch-acquires-50-of-moroccos-fintech-company-vantage

● https://thefintechtimes.com/dubai-welcomes-biometric-face-verificationplatform-into-hypermarkets/

● https://thefintechtimes.com/dtb-and-mastercard-join-forces-to-empowerfintechs-with-payment-cards-in-kenya/

● https://thefintechtimes.com/initiative-to-power-six-million-unstoppable-web3women-in-africa-by-2028/

● https://thefintechtimes.com/zywa-and-mastercard-join-forces-to-empower-genz-in-the-uae/

● https://thefintechtimes.com/credit-nova-cross-border-credit-history-uae/

● https://thefintechtimes.com/western-union-and-mfs-africa-partner-to-improvefinancial-inclusion-across-continent/

PREDICTIONS

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

● https://qz.com/egypts-mnt-halan-is-africas-newest-unicorn-1850081583

● https://www.reuters.com/business/finance/global-markets-bankswrapup-1-2023-03-10/

FRAMEWORK

● The Fintech Times - Fintech: Middle East and Africa 2022 Report

PRESENTED BY