The Fintech Times FINTECH: Middle East & Africa 2022

Welcome to the Fintech: Middle East & Africa 2022 Report

The Middle East and Africa (MEA) is a truly exciting region as it is the backdrop to some of the world's fastest-growing economies and countries undergoing significant transformation: fintech is playing a part in this.

It is such an honour to write a report for a region that, to be frank, I knew little about until recent times, but I – like a quarter of the world’s population – am now proud to call it my current base and home. I’ve loved the opportunity to help spearhead and architect the 2022 edition of this report, following the success of our pilot study in 2021. I hope it helps readers grasp various aspects of MEA, its economic development and, most importantly, the growth in importance of fintech in the region.

It is narrow-minded to think that the MEA is not contributing to the global success of fintech even in comparison to more 'valuable' regions. Yes, it may be delivering less per venture capitalist (VC) funding or have fewer fintechs, but from my experiences while living here, there’s so much worth talking about when you hear the stories behind the initial figures.

This region has not only grown in its contribution to the fintech sector but has even exported its know-how to much of the world while impacting on the wider narratives of financial inclusion and economic development.

I would like to thank my family and friends who have supported me and given moral support while I have compiled this year’s report. Plus, of course The Fintech Times family. Thank you to Kaitlyn King, as well as Claire, Chris, Jason, Raf and last but definitely not least Mark... we did it!  I'd like to thank our sponsors as well for making this report possible

For those who are reading this – whether you live in the Middle East and Africa, follow fintech regularly, work within the sector, or are just simply curious about it – we all hope the Fintech: Middle East and Africa Report 2022 will prove useful for you. Despite its complexities, our aim is to make topics as simple as possible to be accessible to all levels.

For those of you who are more ‘in-tune’ with fintech and goings-on in MEA, we hope you will learn new things not only about others but also your own contributions to the wider global community.

Now come with us as we take you on a journey through the exceptionally diverse region of the Middle East and Africa.

Author Richie Santosdiaz, Economic Development Advisor – Emerging Economies, The Fintech Times CEO Jason Williams | Editorial Director Mark Walker | Commercial Director Raf de Kimpe Editor Claire Woffenden | Supporting Researcher Kaitlyn King | Art Director Chris Swales

Special thanks also to contributors of many quotes and insight that feature throughout the report, such as catalyst profiles and fintech stories. Published by Rise London | 41 Luke Street | London EC2A 4DP | United Kingdom © The Fintech Times 2022. Reproduction of the contents in any manner is not permitted without the publisher’s prior content.

The Fintech Times ’ and ‘Fintech Times ’ are registered UK trademarks of Disrupts Media Limited. Disclaimer: This report was prepared by The Fintech Times and the main author to mainly educate the public on the growing trends of the fintech ecosystem in the Middle East and Africa (MEA) region in the context of its relationship to economic development. Research findings of this report can be shared provided the report and their sources are acknowledged. Written: September 2022. Published: December 2022

Greetings from the Qatar FinTech Hub (QFTH)

IIt is a pleasure for us to participate in The Fintech Times MEA Report 2022, a report which examines the fintech ecosystem in the MEA region and sheds the light on how the latter is creating a suitable environment for all types of financial technology services to synergise, while identifying progress, challenges and opportunities.

In line with Qatar’s fintech strategy, Qatar Development Bank (QDB) announced the launch of the FinTech Incubator and Accelerator programmes in 2020, a main milestone and key strategic initiative of the strategy. Their launch constitutes a breakthrough for the financial system in the State of Qatar and the region as the programmes are achieving a paradigm shift for fintechs and their ability to compete and grow in the light of a healthy business environment. Since its launch, the Qatar FinTech Hub has been striving to create a sound ecosystem for incubating domestic fintechs, while building up an enabling environment for foreign ones to invest and grow in the region. Both programmes are working on supporting the Qatari financial system to meet the needs of local and global fintech entrepreneurs who are looking for a launch pad and a hub to accelerate their growth.

The Incubator programme is designed for budding entrepreneurs and early-stage fintechs with a minimum viable product (MVP) who want to transform their prototype into a sellable product; whereas the Accelerator programme targets mature fintechs looking for global expansion with a proven product market fit by demonstrating their project’s proof of concept.

QFTH runs the FinTech Incubator and Accelerator programmes twice a year; both programmes provide fintechs with access to financial and in-kind support as well as access to wider investors and global mentor network. Our mentors come from more than 14 countries with different areas of expertise within the fintech sector. The programmes offer a series of high-level masterclasses as well, conducted by QFTH partners and renowned speakers from across the world, in addition to a range of proof of concept (PoC) and collaboration opportunities with over 25 local and global financial institutions, payment technology partners and large corporations. Moreover, as part of our ecosystem development initiative, we also organise fintech hackathons; an innovative

competition through which participants present their solutions for pressing challenges that financial institutions and stakeholders face regularly. The winners of the hackathon are awarded with fast-track access to the Incubator programme. In our most recent hackathon, we onboarded Visa as a challenge partner, offering participants a chance to access Visa’s Fintech Fast Track programme.

Since its launch, QFTH has rolled out four waves of the Incubator and Accelerator programmes in Qatar, drawing in over 2,300 applications from more than 76 countries. Each wave was designed with a different focus area, to tackle and address specific challenges faced by financial institutions. The four waves covered were payment solutions, emerging technologies, embedded finance and next-gen banking.

To date, we have invested up to $7million in 64 fintechs with a total valuation of $484million+. Moreover, QFTH has been ranked as MENA’s second largest investor in fintech during Q1 2021.

In 2021, we released our first ever whitepaper, titled From Qatar to the World: A report on the state of FinTech in Qatar. The whitepaper offered a deep dive into Qatar’s fintech ecosystem and the programmes that it has put in place to stimulate growth, build calibre and talent, provide access to capital and opportunities, and design regulatory initiatives to attract fintechs and foster their development.

Moreover, our last milestone for 2022 was the Demo Day event that took place in October, and that was under the patronage of Qatar Central Bank, with which we concluded Wave 4. The Demo Day was one of the biggest fintech events in the region and a platform where fintechs had the opportunity to showcase their solution for the key players in the financial services ecosystem as well as startups and scale-ups, investors, partners, sponsors, advisors, consultants and enthusiasts.

Finally, we believe that our success can only be achieved through synergy and meaningful cooperation. We continuously collaborate with strategic stakeholders within the fintech community including financial institutions, technology providers, payment networks, regional and global fintech hubs, academia and regulators from around the world to ensure we are bringing programme participants an unparalleled expertise and wider opportunities across the globe.

We would like to conclude by reiterating that QFTH is on a committed mission to transform the fintech ecosystem not just in Qatar but across the entire MEA region. With access to adjacent underserved markets, favourable business environment, and access to capital, Qatar will continue to be a home for regional fintech development and will emerge as a key global player on that front.

Hilal Ali Al Kuwari – acting head of incubation and manufacturing projects, Qatar Development Bank

“The future of the MEA region is bright”

" Reltime is very pleased to take part in the Fintech: Middle East & Africa 2022 Report and to partner with The Fintech Times. The region is very close to my heart, since I grew up as a child in Burundi and Zambia in the 1970s. My father was working for the Norwegian government and the United Nations back then and my formative years in Africa have shaped and positively influenced my life. I am fond of planting trees and also passionate about helping empower people and businesses to take back control of their finances, privacy, identity and assets worldwide. I have planted olive trees in Dubai and in South Africa, as a gesture of peace, reconciliation and friendship in the Middle East, Africa and beyond, and a sign of alliance between nature and mankind.

Without a doubt, fintech is making a huge difference in and positive impact on the MEA region – significantly improving the livelihoods of people, communities and businesses. Reltime has very ambitious plans for the region and we are open to collaboration with both financial and non-financial institutions. Reltime is a B2B2C company on a mission to empower people and businesses to thrive and be free in the New World. We are revolutionising and transforming the way business and finance are done, payments and financial transactions are made, and trade is conducted in the region and worldwide.

As a fintech for good doing business all around the world, Reltime entered the Southern African markets in September 2022. The group managing partner of our business partners in the region, Peterson Khumalo, who runs a proudly pro pan-African financial services firm, believes that ‘a business is not about making money, it is about creating value. Money will follow. With Reltime, we have found our perfect second half’. Peterson’s perspective is Africa first, and the world after. This is because Africa has over many centuries given so much to the world in labour, minerals, humanity and so much more. Our trailblazing and inclusive strategic partnership aims at empowering people and businesses, while accelerating and leading the region’s Web3 and Metaverse fintech eruption.

We are seeking strategic and B2B2C partners throughout the MEA region, since we firmly believe

that Reltime’s global Web3 financial services platform and Decentralised Exchange (DEX) are unique. Web3 means power to the people. Power to entrepreneurs. Power to local businesses and communities!

Our Reltime DEX could, for example, be used as a truly easy-totrade platform for local fair trade and premium cocoa growers to trade their quality beans directly with buyers on the other side of the planet, without the interference of any intermediaries. A smart contract inside the DEX enabling the transaction is automatically created. This instant smart contract could be between the seller (e.g. the farmer or producer in Africa or the Middle East), transporter (e.g. a logistics or shipping company) and buyer (e.g. an end user or merchant in Cape Town, Tel Aviv or anywhere in the world).

Reltime is determined to be at the forefront of the Web3 and Metaverse revolution in the MEA region. Through Reltime’s best-inclass FastTrack to Embedded Finance, game-changing financial services can be provided to your customer base under your own brand, providing attractive new revenue streams, while reducing your customer churn. This is single, decentralised, agile and Web3 financial platform is especially interesting for telecom operators, financial service providers focusing on specific target groups, neobanks, gaming and virtual sports Metaverse companies, supermarket chains, shopping malls, e-commerce firms and others with a large customer base.

The future of the MEA region is bright. Leading by example, the region can show to the world what fintech for good can do, how it works in the New World, and how it can positively impact people’s lives, entrepreneurs’ profitability and merchants’ capability to open up new markets and pay little or no settlement and transaction fees. Fintech can contribute immensely to solving the challenges and frustrations people, communities and businesses in the region are facing every single today. That is why Reltime is your local, regional and global partner for anything related to embedded finance, Web3 and decentralised fintech for good solutions. We are here for the long term!”

Peter Michel Heilmann, CEO, Reltime

Economic development through prosperity with fintech presented by

AIM OF THE REPORT

The report gives a comprehensive overview of the MEA fintech landscape, from a wider macro-level overview and then narrowing down to specific aspects of the industry.

REPORT OVERVIEW Divided into four chapters, the report covers economic development in the region and how its relationship – both market demand and government support – have been impacting the growth and development of the fintech industry in MEA. It tells a story of a region where many are financial excluded and fintech has truly brought inclusion across the region. Later, the report delves into fintech directly and goes through key subsectors of it. Afterwards, the report then ranks 23 different fintech hubs and categorises them in a three-tier system through analysis of various economic, digital and fintech-specific factors – giving in addition a country overview of all 23. Finally, the report concludes with a summary, predictions and future framework for the future vision of the sector and its contributions to wider economic development.

Overall, the report gives the reader – including those who would not be familiar with the region nor even fintech as well as those more in-tune with either or both – a comprehensive overview via the presentation of this report as a solid reference point.

A region that is home to a quarter of the world’s population, MEA presents a diverse region that is home to a mix range of cultures and socio-economic backgrounds but nonetheless share similarities – it needs digitalisation, financial services can be improved and fintech could be the answer to much of it. The following will be the baseline of the report:

CHAPTER ONE: ECONOMIC DEVELOPMENT OVERVIEW OF THE MIDDLE EAST AND AFRICA

Before jumping in on fintech, the report gives an overview of the MEA region – from its economic development at present to economic situation to its financial services sector and tech sector and government intervention – culminating with its relation to financial technologies or fintech.

With a region as diverse as MEA, which is home to some of the world’s richest, poorest and fastest growing economies, it is hard to summarise quickly or easily. Nonetheless, there are similar traits – for instance much of them rely on natural resources fuelling their economic growth as well as having traditional mindset financial services institutions. This culminates in today’s needs globally with the rise of digitalisation and economic diversification whereby much of MEA isn’t prepared to do so; however they admit and are willing to change via economic development strategies to prepare them for the future via 'visions' or economic diversification strategies. To note, economic integration among neighbours can play a key role in collaboration and innovation as well.

In addition, consumers in MEA, whom are mainly young, internet deprived but mobile friendly, diverse and also unbanked and financially excluded or underserved, have had to adapt to the challenges the pandemic have brought in recent memory.

CHAPTER TWO: FINTECH LANDSCAPE IN THE MIDDLE EAST AND AFRICA

From economic development, Chapter Two then focuses on its relation to financial technologies and its impact in MEA. The sector is first given a comprehensive overview, in particular in terms of who does what and where it is. In other words, how many fintech solutions are there in the MEA region as well as what specifically they do.

Later, much of the section focuses on breaking down the subsectors of fintech in relation to MEA. It is true, and even to this day, that much of the region’s fintech is centred around payments, money transfer and remittances. However, this is not completely accurate anymore, as the region is also boasting other fintech subsectors beyond payments such as gametech, wealthtech and investing, digital currencies (including cryptocurrencies), lending, open and embedded finance, regtech and insurtech. This chapter gives an overview of each of them and their impact on the region.

As a first, the report gives a visual overview of a sample of fintechs that are part of this ecosystem as well as other relevant graphics that pertain to the fintech ecosytems. After giving an overview, the report

showcases excerpts of a sample of key ecosystem players that are relevant to the MEA fintech environment.

CHAPTER THREE: FINTECH HUBS OF MEA

The question arises – so which ones are fintech hubs? And why? It is easy to say X country is a fintech hub and Y country is not but it needs evidence and justification at the end of the day. This is why this report also adds more value than others because it also factors in various aspects of a fintech ecosystem. Looking at the wider MEA region, coupled with known information, 23 countries were chosen to be evaluated among themselves on what level of fintech hub 'ness' they were. This was done based on simple three-level criteria:

■ Wider economic development criteria – for any sector such as fintech to thrive it needs an ecosystem that promotes economic growth and prosperity. In this case, six different criteria on this topic were chosen to evaluate the 23 countries.

■ Tech and digital – what have been the benefits of tech and digital? Three different criteria were chosen to evaluate the 23 countries.

■ Fintech-specific – there are four fintech-specific criteria that can we have used to evaluate the 23 countries .

Factoring in these indicators, the results shouldn't come as a surprise in terms of which countries in MEA got what. For instance, the highest Tier-One hubs were Israel and the United Arab Emirates (UAE). Also in the second tier, the two highest were Saudi Arabia and Turkey; the 'Big Four' in Africa (Egypt, Nigeria, Kenya and South Africa) all scored well and are solidly in Tier-Two hubs. If anything, it further solidifies which categories received what score. Economic development prosperity coupled with digital and fintech specific indicators help propel the ‘fintech hub’ of those that have been ranked as they have been done.

CHAPTER FOUR: THE FUTURE

This chapter addresses the question first of partnerships – do it on your own or via mergers and acquisitions (M&As) with respect to the relationship of fintech and financial services and other third parties like telecommunications companies. Later, a top 10 predictions of the region is given – addressing topics like the current ongoing challenges of the global economy, the further diversification of the region’s fintech sectors beyond just payments, and afterwards a future framework for the vision of fintech’s further growth and contributions to MEA is done.

The overall theme of financial inclusion through fintech will continue to be important for MEA. The report then concludes with a final summary.

Chapter One: Economic development overview of the Middle East and Africa

Chapter One gives an overview of the Middle East and Africa (MEA) region, with the region’s current economies and wider economic development the main focus. Later, the chapter gives an overview of the MEA consumer before delving into the region’s financial services ecosystem. The chapter concludes

with government support via national economic development strategies, the rise of economic integration and finally, financial technologies (fintech), and its growing role in the region.

Before going into the region’s economic development, one must understand its geography first.

i.

The MEA region is vast – spanning mainly across Africa and Western Asia (with parts of Turkey in Europe too). Including Israel and Turkey, MEA has a population of approximately 1.8 billion people, with Africa alone home to 1.35 billion. Essentially, almost one out of four people in the world’s population of almost eight billion live in MEA. Given that the territory of MEA is so huge, each region and country have their own respective cultures, languages and histories.

1 MIDDLE EAST AND NORTH AFRICA

When including North African nations, it is common practice to say Middle East and North Africa (MENA) with respect to the Middle East. The MENA region is often categorised together due to its shared history, culture, religion and language. It includes:

■ 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

■ Gulf region non-GCC – Yemen, Iran, Iraq

■ Turkey

■ North Africa – Algeria, Egypt, Libya, Mauritania, Morocco, Tunisia, Sudan and Western Sahara

2 AFRICA

Africa is home to 54 countries, according to the United Nations (UN) – not including Western Sahara. Africa is really big – spanning from the Indian Ocean to the Atlantic from east to west, all the way from the Mediterranean in the north to the tip of South Africa.

It has a land area of more than 30 million sq. km meaning it can easily accommodate the US, China, India, Japan, Mexico and several European nations combined.1 The African Union, which has 55 African member states, divides the continent into five regions:

■ North: Algeria, Egypt, Libya, Mauritania, Morocco, Tunisia, Western Sahara and Sudan

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

■ West: Benin, Burkina Faso, Cabo Verde, Cote d’Ivoire, Gambia, Ghana, Guinea-Bissau, Guinea, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo

■ East: Comoros, Djibouti, Ethiopia, Eritrea, Kenya, Madagascar, South Sudan, Mauritius, Rwanda, Seychelles, Somalia, Tanzania and Uganda.

■ Central: Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon and Sao Tomo-and-Principe

In this report, Sub-Saharan Africa (SSA) will also be used, which refers to the area south of the Sahara – essentially minus North Africa. In addition, due to the importance of the Arab culture in MEA, the Arab world will be referenced in this report, which mainly refers to the countries in MEA that not only speak Arabic but are members of the League of Arab States (Arab League) – the association of independent MEA countries whose peoples are mainly Arabic speaking: Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, the United Arab Emirates and Yemen. (Note, Syria’s membership to the Arab League has been suspended)2

ii.Economic overview of MEA

ECONOMIC INTRODUCTION

The diversity of MEA can be seen across its different economies – home to some of the most advanced ones as well as some of the poorest regions in the world. With respect to gross domestic product (GDP), for instance, it is home to some of the world’s highest GDPs per capita, particularly in the Gulf Cooperation Council (GCC) region and Israel. It is also home to much of the world’s lowest per capita. Of the bottom 10 gross national income (GNI) per capita globally, all were in Africa with the exception of Afghanistan.3 4

The region is very much reliant on its own natural resources. Much of the global spotlight tends to focus on oil and gas and specifically on the Middle East, specifically in the GCC region – Saudi Arabia, UAE, Qatar, Bahrain, Oman and Kuwait, as well as others such as Iran and Iraq. It’s important to note, several African nations are also oil producing nations. These include Angola, Algeria, Nigeria, Libya, Republic of the Congo, Ghana, Gabon and Equatorial Guinea.5 In fact, in 2021, out of the top 15 exports of crude oil (by dollar value), over half were MEA countries – Saudi Arabia (first place), Iraq (fourth), UAE (fifth), Kuwait (eighth), Nigeria (ninth), Libya (11th), Angola (12th), and Oman (13th).6 In terms of natural gas, two MEA countries, Iran (second) and Qatar (third) hold the world’s biggest natural gas reserves behind the US in fifth, Turkmenistan in fourth and Russia in first place.7 Out of the current 13 Organisation of the Petroleum Exporting Countries (OPEC) members, all but one (Venezuela) are MEA countries. Despite its diverse landscape, it presents tremendous development and growth. During pre-Covid times, from 2014 to 2019, Africa had a decadal average of five per cent to around three per cent growth. In 2019, East Africa was the fastest growing region while North Africa continued to make the largest contribution to Africa’s overall GDP growth, thanks in part to Egypt’s growth. In fact, six African countries were among the world’s 10 fastest-growing economies: Rwanda at 8.7 per cent, Ethiopia at 7.4 per cent, Côte d’Ivoire at 7.4 per cent, Ghana at 7.1 per cent, Tanzania at 6.8 per cent and Benin at 6.7 per cent.8

ADVANCED ECONOMIES

The well-developed and wealthy parts of the region comprise the GCC and Israel. With the former, the discovery of oil last century transformed this region drastically. Previously, it was mostly a nomadic society 9 in comparison to today, whereby it now has some of the world’s highest standards of living – Qatar has the highest GDP per capita in MEA (and one of the highest in the world), for example. 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 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.10 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.11 Also, the arrival of up to a million of 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.12

Not all economies in the GCC have been solely reliant on oil, however. Dubai, the largest city and commercial hub of the UAE, and the Kingdom of Bahrain have both used wealth from their oil reserves to transform their economies through diversification via non-oil sectors. With the latter, it 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 industry13. In Dubai, oil – which at one point was over half – now only contributes less than one per cent of Dubai’s GDP.14 This has been attributed to its investments as well and prioritisation of sectors notably logistics and transportation, tourism, financial services tourism and wider services. For instance, in pre-pandemic 2019, Dubai was the fourth most visited city in the world behind London, Paris and Bangkok.15 This and the city’s wider economic development can be attributed to the success of Emirates Airlines.

MID-ADVANCED ECONOMIES

Several countries in MEA have relatively mid-advanced economies – ranging from the higher end to the border between the lower end of the mid-range. They are either economies that, similar to their more advanced countries in particular the GCC, have an abundance of natural resources, in particular oil and gas, or economies like Israel, where they have had to rely more on a services economy due to a lack of those resources, or a hybrid of both resources and services.

Many of these economies are reliant on the likes of oil and gas, or other commodities such as gold or agriculture. As mentioned earlier, countries like Nigeria are abundant in resources – in their case oil, where over three-fourths of their export goods by value are generated by this.16 With large populations, the revenues of oil presented wealth to the country but these haven’t benefited everyone.

Turkey, which is a high-middle income economy, has a strong economy historically. It has a mixed range of goods that includes agriculture, manufacturing and the services sector.17 Kenya, similarly, has a wide range of its economy that include not only agriculture but also the services sector.18 In fact, Nairobi has become not only a regional hub for East Africa but has also increased its technology environment to the point it has also earned its own nickname 'Silicon Savannah'.19 Other examples include South Africa, which historically has a developed economy in its services sector and a mixed economy where natural resources, in particular gold and platinum, also play a strong part in its income.20 This also includes much of North Africa – in particular Morocco, Tunisia and Egypt – which has relied on both a mix of resources like gas for Egypt but coupled with other sectors notably tourism for all three. There are countries like Jordan, with little natural resources compared to the others, who nonetheless have achieved their status with a strong services sector and manufacturing.21

Despite having relatively advanced economies, the challenge remains that wealth is not as enjoyed by all – huge numbers in some countries still live below or at the poverty line and inequality is high. For instance, it was estimated that almost half of South Africans pre-pandemic were living at or below the poverty line.22

MIDDLE EAST Bahrain, Qatar, UAE, Oman, Yemen, Saudi Arabia, Jordan, Iran, Iraq, Syria, Lebanon, Isreal 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

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

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

CENTRAL Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon and Sao Tome-and-Principe

The Middle East and Africa

LOW-INCOME ECONOMIES

Compared 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, a lot of these countries depend on development aids and subsidised loans from multilateral lenders to survive.23

Based on the 2020 gross national income (GNI) per capita in current USD, the bottom 10 countries in the world were Burundi in first place at $270, Somalia in second at $310, Mozambique in third at $460, Madagascar in fourth at $480, Sierra Leone in fifth at $490, Afghanistan in sixth at $00, Central African Republic at $410 in seventh place, Liberia in eighth at $530, Niger in ninth place at $540 and the Democratic Republic of the Congo at $550.24

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.25

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.

CURRENT STATE IN MEA

Like the rest of the world, 2020 until present has brought significant challenges to MEA. From the affluent regions to the middle and the lower income, the global pandemic was not an easy challenge and recovery from it is still ongoing. Shipping and logistics crises, partially due to Covid, closures and delays in major Chinese ports as well as other factors like the Suez Canal blockage and the 2022 Ukraine and Russia war, have not helped. The current resurgence of travel and tourism and, related, the overall challenges of inflation have made this worse.

Nonetheless, according to the World Bank, the MENA region is expected to grow by 5.2 per cent,26 which is the fastest rate since 2016. In sub-Saharan Africa, where growth initially was predicted to be at four per cent, the forecast is 3.6 per cent by end of 2022.27 For both regions, this will be pending on the ongoing conflicts of Ukraine and Russia, food crisis, other health issues relating to the pandemic – to name just a few. Even though many in MEA are abundant with commodities, such as oil, they are also mainly reliant on imports of food, which can impact any significant predications on economic growth.

iii.

FINANCIAL SERVICES

The following will look specifically at key sectors in the economy, including the financial services sector as well as wider tech and entrepreneurship – all of which have brought opportunities to the rise of financial technologies (fintech).

OVERVIEW OF THE FINANCIAL SERVICES INDUSTRY

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.

THE MEA FINANCIAL SERVICES SECTOR

Globally, the financial services sector plays a large part in our economy. Its total assets last year globally were estimated be around $468trillion.28 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 well-developed 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.29 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.30

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.31

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.32 Its success was attributed to its embracement of Western culture and sophisticated banking regulations and one of 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.33

After the challenges of the Civil War, other financial hubs in MEA came about such as Kuwait or Bahrain. As of today, more than 400 licensed financial institutions, representing a rich mix of international, regional and local names, are based in Bahrain. Those companies and institutions cover the full range of financial services, with concentrations in wholesale banking, insurance, and funds/asset management. The financial sector in Bahrain 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).34

In Africa, there’s Mauritius. 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.35 At present, 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, Nairobi in Kenya, Doha in Qatar, Tel Aviv in Israel and the UAE capital of Abu Dhabi. 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.36 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.37

There are also emerging players – notably Abu Dhabi, which on the same GFI ranking was the only other city in MEA to crack the top 50 with a 31st place. In the top 100, other MEA cities included South Africa’s Cape Town (55th place) and Johannesburg (56th), Tel Aviv (57th), Istanbul (64), Doha (65th), Bahrain (84th), Riyadh (86th), Mauritius (87th) and Kigali (99th).

LARGEST BANKS IN MEA

This report lists the top 20 largest banks in the entire region, which were ranked by total assets in US dollars. These figures were compiled from the banks’ individual investor relations reports, using their annual data from this year. Note, only MEA headquartered banks were included and not non-MEA banks with regional offices in the region.

Qatar National Bank takes first place, with total assets of $298.8billion. Close behind it is United Arab Emirates' First Abu Dhabi Bank, with total assets of $272.25billion. In third place is Saudi Arabia’s National Commercial Bank (NBC) with total assets of $246billion. Rounding out the top five are Israel’s Bank Leumi with $191.1billion and UAE’s Emirates NBD with $189billion.

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. Nevertheless, it shows that much of the region’s financial services industry is concentrated in specific countries, the largest financial institutions in the region.

SPOTLIGHT: INSURANCE

When it comes to insurance companies in the MEA region, there is strong competition in the industry. With property, health, life and non-life insurances, as well as a host of other financial services (including pensions and asset management), insurance offerings in the region are vast, with options for consumers and businesses. Home to 1.8 billion people, the MEA region represents a significant population yet many are uninsured. According to Atlas, the insurance premiums market in MENA stood at $57billion in 2018. The affluent GCC region38, according to research from management consulting firm Kearney, 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 per cent) of the region’s premium market share. Much of the Middle East still is uninsured, with less affluent regions specifically beyond the GCC region.

According to a report by Zurich, “despite the ability of insurance to mitigate some key challenges for the sustainable development of emerging economies, 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. 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.”39

In Africa, the rate of uninsured is even lower. Nigeria, with a population of more than 200 million people and the largest country in the continent by population, has a penetration insurance rate of merely 0.4 per cent. A different trajectory generally in that rule is 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.

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, 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¸, Insurance Association of Turkey, 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, Orient Insurance, 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, Bahrain’s Bahrain Kuwait Insurance, Morocco’s RMA and Wafa Assurance and Kuwait’s Gulf Insurance Group. The next page showcases the top 15 insurance companies in the MEA region.

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

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 having representation. Like the banks, the largest ones in the MEA region are focused on those areas.

Spotlighting back to Africa, the continent has a potential insurance market value of $68billion in terms of gross written premiums, which would put it at the eighth largest in the world. This was originally researched from a report from McKinsey.40

With even 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. It still, after all, is providing financial services to people and corporations. The ecosystem is made up of banks, as well as other international banks who have a presence in the region, investment houses, lenders finance companies, real estate brokers and insurance companies.

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

■ State owned or partially state owned financial institutions For those of you reading in the West, considering state ownership of banks might conjure up memories of the 2008 Global Financial Crisis, with American and British governments forced to bail out banks – buying their bad debts in exchange for stakes in said bank.

However, 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).41 This is also prevalent as well in the Middle East, 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 per cent 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).42

■ Lending more conservative It is hard to summarise all the banks in MEA, but it seems to be generally conservative in terms of its lending. This could be seen with the 2008 Global Financial Crisis, in comparison to the West, the financial services sector across MEA fared much better. Of course, there was a global recession that did impact the world, including MEA, but this speaks purely on the financial sector. MENA banks, and in particular the GCC ones, hold high levels of capital, generally comfortably above minimum capital requirements and standards set under the Basel III agreements.43 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 2009.44

■ 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. Even though Islamic finance existed in the seventh century, its formalisation began gradually since 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.

Islamic finance is one of the fastest growing financial industries, even though it is still a small share of global finance. Its total assets have exceeded $2trillion, and it is expected to reach $3.8trillion by 2023. According to the Union of Arab Banks, 10 countries accounted for 95 per cent of the world’s Sharia-compliant assets with Iran at 30 per cent of the global total, followed by Saudi Arabia at 24 per cent, Malaysia at 11 per cent, the United Arab Emirates (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.45

With regards to insurance, part of why there is still a low penetration could be the lack of Sharia compliant offerings. Saying that, with Takaful, which is Sharia compliant, this can help boost the uninsured rate in the Arab World.46

■ Less advanced infrastructure Compared to the West, much of MEA overall has various levels of its advanced infrastructure with regards to financial services. These infrastructures of course are important for lenders, especially as data and information are needed to help offer potential services to end users. For instance, while credit bureaus are important and perhaps taken for granted, this isn’t the case in MEA. As recently as 2007, only four countries in Africa, according to the IFC-World Bank Doing Business 2007 Report, had effective credit bureaus: Botswana, Namibia, South Africa and Swaziland.47 Since then much has changed.

In recent memory, it is estimated that the MENA region in terms of private credit bureau coverage (by percentage of adults) was only over 20 per cent. It’s important to note the disproportion of this, with Israel scoring at 100 per cent and most of the GCC scoring at least over 50 per cent like in Saudi Arabia and the UAE. Interestingly, Iran was more than 60 per cent.48

Another example has been the relatively lack of data centres across the region. Much of the data, such as in Africa, is stored abroad. Nonetheless, the region has witnessed a growth in building its own data centres.49

This even includes the gap of what many might see as basic financial services infrastructure, such as ATMs. In Africa, especially in the rural areas, ATMs are not readily available – further exasperating the gap of financial exclusion.50 Even IDs are still lacking – according to the World Bank, of the estimated one billion people globally without a registered ID, Sub-Saharan Africa takes over half of this share, making digital transformation and fintech developments difficult to advance. So, forget even considering know your customer (KYC) when even just knowing someone is difficult. Not even factoring digital experiences, which much of this report will highlight, infrastructure improvements are still needed.

■ Financially excluded for individuals Much of MEA remains to be underserviced or excluded completely. In more advanced financial sector ecosystems, such as in South Africa, Mauritius and Kenya, there have been improvements in banking penetration and overall financial infrastructure. Banking penetration in those three countries are 69 per cent, 90 per cent and 82 per cent respectively. Compared to much of the rest of Africa, in South Africa and Mauritius, there are 10 bank branches per 100,000 adults – far higher than the Sub-Saharan African average of only five.51

Saying that, most Africans – 57 per cent – do not have any kind of bank account (even 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 a low credit and debit card penetration – at three per cent and 18 per

cent respectively.52 One challenge in the African continent is that it is still not mostly urbanised – and much of its already limited financial services institutions often caters mainly in these urban areas – thereby excluding a significant proportion of the rural population. This doesn’t factor poverty levels which also made the situation of financially excluded worse.

The Arab World is even worse. According to a World Bank study, almost 92 per cent of the Arab World population are in immediate need for adequate financial inclusion – more choices, greater access and resilience. While 69 per cent of the Arab World remains to be unbanked.53

■ Financial exclusion for small and medium enterprises For the MEA region, in terms of small and medium enterprises and micro businesses, access to finance remains to be a challenge. For instance, in the Middle East and Central Asia, SMEs are the majority (96 per cent) of all registered companies in the region. Nonetheless, the region lags most with 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 shown in a survey from the World Bank Enterprise Survey where 32 per cent of firms in the MENAP region say access to credit is 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.54 Africa doesn’t fare better either. SMEs in Sub-Saharan Africa have a finance gap of $330billion, according to the World Bank. SMEs across the continent struggle to secure loans due to various factors, one of which is they are unable to provide information needed about their businesses to lenders (as highlighted earlier with the infrastructure bullet point).55

TECH AND ENTREPRENEURSHIP

It is no surprise that tech plays a major part in not only the global economy but also in day-to-day lives. Just this year, for example, global VC funding reached $160billion in the first quarter of this year, seven per cent higher than compared to the same period last year.58 In terms of a sector, the tech industry globally is estimated to be worth at least $5.2trillion now. Yet most of that is divided between North America (35 per cent), Asia (32 per cent) and Europe (22 per cent) – therefore the remaining 10 per cent goes to the rest of the world, including MEA.59

It may seem like MEA might not have much going for it when looking at figures like these with uncertainty of where VC funding goes – at one point it was as low as a mere one per cent – but to see the day-to-day changes and the opportunities for fintech, the story becomes clearer. Related to its economic development, and like the financial services industry, the region’s wider tech ecosystem presents varied amounts of disparity in development. Israel has an environment that is not only leading in MEA but also the world while in other parts of the region the tech ecosystem still remains to be infant.

The following is a summary from StartupBlink on MEA countries that are ranked among tech hubs.

Of the estimated one billion people globally without a registered ID, Sub-Saharan Africa takes over half of this share

FEATURE: ISRAEL

Startup Nation Israel has ranked as the highest in the region and this is no surprise with its own nickname demonstrating how it has produced the most startups per capita in the world. In addition, the country has produced some of the world’s most prominent tech unicorns (companies that are valued at $1billion or more) – including the likes of eToro, Rapyd, TripActions, Moon Active, Compass, Next Insurance and Melio. There are at least 77 Israeli-founded startups that have achieved this status – one of the highest numbers in the world.60 Many of them such as the first two and last two mentioned, are fintechs.

The highly innovative Israeli tech ecosystem has strong support from the government and its ecosystem has a tight-knit network of entrepreneurs. The country is second in the world in research and development (R&D) expenditure per capita, which is around 4.1 per cent of its GDP in R&D. Also, the country has the highest percentage of engineers and scientists per capita in the world. Israel also boasts one of the highest ratios of university degrees and academic publications per capita.61

The country had a record of over $25billion raised last year and this year so far looks promising too. During the first three months of this year, Israeli companies raised close to $5.6billion.

These were raised over 212 deals (including 14 megadeals of over $100million each); the $5.58billion is on par with fundraising in Q1 2021, which amounted to $5.4billion.62

FEATURE: TURKEY

Turkey has a large population of over 86 million people as well as an educated population. Despite its own recent challenges with the Turkish Lira, the country has been able to continue developing a strong tech ecosystem.

Between 2010 and 2020, the amount invested in Turkish startups annually was around $50milion to $100million. However, last year, that was over $1.5billion, which is more than the last decade combined. Having failed to produce any unicorns until 2020, the country has now seen six unicorns.63 One of them is Dream Games, a gametech company. During the first quarter of this year, Turkey saw an investment volume of $1.3billion with 42 deals, a figure similar to the same period last year.64

As a breakdown of the startups from Q1 this year, fintechs had the most of the 44 deals at nine deals, followed by gaming with a close eight and delivery & logistics with six. By deal volume it was delivery & logistics that took the most of the $1.3billion at $776.795million followed by gaming at $425.563million and software as a service (SaaS) in third at 131.471million.65

Focusing on the rest of MENA, not counting Israel and Turkey, last year saw the region achieve $2.6billion in VC funding – a record high – according to MAGNiTT’s 2022 Middle East and North Africa Venture Report. That included three mega deals which included Saudi Arabia’s Unifonic, a customer engagement platform. The $2.6billion value represented 590 deals. The UAE accounted for over a quarter of those deals at 26 per cent, and nearly half (45 per cent) of all funding raised in MENA last year. A third of this funding went to fintech.66 67

This year, Africa enjoyed a record 150 per cent increase in VC funding with $1.8billion during the first quarter of this year (compared to $730million the same period last year). The key regional hubs in the region, due to their sizes and relative advanced ecosystems, took the lion’s share – Nigeria ($600million), Kenya ($482million), South Africa ($228million) and Egypt ($202million). The rest of Africa enjoyed $306milion.

More than half (54 per cent) of the venture funding last year in Africa went to fintechs and this year included some of the continent’s biggest deals, such as Flutterwave’s $250million Series D raise.68

Besides Israel and Turkey, other noticeable tech hubs exist. For instance, the second highest ranked tech hub, the UAE, presents an ecosystem that is maturing and has attracted some of the best and brightest to the country’s key cities of Dubai and Abu Dhabi. In addition, there is also Kenya, with its capital and largest city Nairobi even dubbed ‘Silicon Savannah’ due to its stature as a regional hub in East Africa and its concentration and growing tech community.

FEATURE: SOUTH AFRICA AND CAPE TOWN

Another one to highlight is South Africa, in particular Cape Town. This has seen the likes of Amazon and Panasonic setting up base there and a growing amount of foreign direct investment (FDI) and local based startups. According to a fDi Intelligence report last year, South Africa took first place in Africa for economic potential, startup status and business friendliness. It received the largest number of FDI projects in the software and IT services sector, as well as having the second-highest number of startups in the continent behind Nigeria.

With Cape Town, it is said that the Stellenbosch corridor has 450 tech firms alone that employ over 40,000 people – a bigger ecosystem than Nairobi and Lagos combined. The Western Cape has the highest number of VC firms in Africa with over 30 co-working spaces and almost 40 per cent of total devops in South Africa, the highest concentration in the nation. It is also home to some of the country’s (and Africa’s) prestigious universities, such as the University of Cape Town and Stellenbosch University.69

Although MEA (minus Israel) trails much of the world in producing unicorns there are signs that the tech ecosystem is maturing, and that the region can deliver. Until six years ago, the continent had zero unicorns and now accounts for seven (all except one are fintechs) including Fawry from Egypt, Nigeria based/founded Opay, Andela (the only non-fintech), Flutterwave, Interswitch, Jumia) and West-African Senegalese-headquartered Wave.70 There’s also Chippers Cash, although with African founders (Ugandan and Ghanaian), its main business operates on the continent and is headquartered in the US.71

The Middle East only has two fintech unicorns – Fawry from Egypt and stcpay from Saudi Arabia. In terms of tech, the MENA region has four others – the first in the Middle East to hit was hail-riding app Careem (later to be acquired by Uber), as well as Swvl (app for booking buses), Kitopi (cloud-kitchen platform), Emerging Markets Property Group (EMGP) (mainly proptech) – all four headquartered in the UAE.72

Israel has produced 92 unicorns, the most per capita in the world.73. In Israel, their home-grown players (many of which have moved operations or at least their headquarters to the US, UK or Asia) have become household fintech names74

Globally, it is estimated there are at least 1,068 unicorns with the US boasting half of them at 554 and China in second place with 180.75 In terms of fintechs, globally it is estimated to be 241 as of June this year.76

Startupbootcamp and PlugAndPlay as well as local-born players like Flat6Labs and Misk500. Globally, there are at least 7,000 incubators, with the USA alone having 1,400 of them.77 In Israel, there are at least 90 accelerator programmes78 and Turkey has 65.79

Another challenge historically has been the lack of VCs, mentors and wider ecosystem to support startups, but this is changing as well. Interesting to note, especially in the GCC which houses various sovereign wealth funds, they are not only investing in tech but even from non-MEA. For example, Mubadala from Abu Dhabi has invested globally in the likes of Klarna.80 VCs also include Pan-African Launch African Ventures or Middle East Venture Partners or Aramco’s Saudi Aramco Entrepreneurship Centre (Wa’ed)’s VC arm, Wa’ed Ventures or Jabbar Internet Group from the UAE. Others from non-MEA that have been active in the region include 500 startups from Silicon Valley.81 Israel has 205 VC firms, around 70 foreign firms and 60 corporate VCs.82 Another challenge for MEA is attracting and retaining talent. Given the nature of tech and wider entrepreneurship, it is a challenge to churn out those with the skill sets to not only work in high-knowledge industries like tech, but, for the bravest, to go out on one’s own and create a business.

Many countries in MEA have natural resources as a main part of their economies, so the wider services industry, including financial services and tech, presents an opportunity for these economies to diversify and embrace new innovations such as fintech

With the UAE’s strong business-friendly environment and push to attract FDI it has allowed for Dubai to become a financial hub. It is also building up its tech ecosystem.

Accelerators and incubators, which play an important part for startups, sees potential in the MEA region. In 2019, it was estimated that there were 643 hubs in Africa – with 41 per cent of those facilities to be incubators, 24 per cent innovation hubs, 14 per cent accelerators and 39 per cent co-working spaces; Nigeria (90 hubs), South Africa (78), Egypt (56) and Kenya were the top four. In the Middle East, a similar story can be told as well but that is also changing. There have been a growth of both international firms entering the market like

In the GCC, where historically much of the local population works in the public sector (for instance the percentage of Kuwaitis working in the government sector has reached 80 per cent of the total employees in this sector)83, instilling a mindset of entrepreneurship and a desire to either create your own startup or work for a startup might seem daunting.

To top it off, due to the nature of the low-income, middle and even the high-income economies, such as Israel, often the best and brightest leave MEA, flocking to the tech epicentres of Silicon Valley in California or London and Singapore. It is a challenge to keep the best and brightest to stay in their country to inspire and give them assurance that there is a strong ecosystem in place for their future business or work.

As highlighted in the StartupBlink report, there remains gaps and in MEA, minus Israel and the UAE and Turkey, there are opportunities for their tech ecosystems to grow. Many countries in MEA have natural resources as a main part of their economies, so the wider services industry, including financial services and tech, presents an opportunity for these economies to diversify and embrace new innovations such as fintech.

iv.Demographics of MEA

Due to the diversity of the region, MEA represents a wide range of ethnicities and cultures. In fact, much of this diversity can be felt across country borders. It is estimated that Nigeria alone has over 500 languages spoken84 and more than 250 ethnic groups.85

The birthplace of the three largest monotheistic religions –Judaism, Christianity and Islam – has also not only shaped the MEA region but globally too. In particularly, the latter has even brought the rise of Islamic finance, which will be discussed later in this report.

As much of MEA has been colonised, as a protectorate or as trading routes to outside of MEA, much of that also has shaped the region – from legal structure, linguistic lingua francas to wider international trade and investment and consequently their wider economic development. From the British to the French to the Portuguese to the Belgians to the Ottomans to the Dutch to the Spanish – this is also something that plays a role in the way the region is to this day. Saying that, they have similar traits that can be summarised below:

1. MANY WORK IN THE INFORMAL ECONOMY

The informal economy – which of course plays much of a significant role in the developing and emerging economies but also in advanced economies (i.e., gig economies and domestic workers) – sees 60 per cent of the world’s population participating in it. According to the

THE MEA CONSUMER

International Labour Organisation (ILO), 60 per cent, or around two billion workers, participate in the informal economy at least part time.86

The gig or informal economy plays a role in much of the world and that resonates in practice with Africa, where 85.8 per cent of employment, and 95 per cent of youth employment is informal. MEA plays a large part of that with some of the world’s highest levels of informality.87 For instance, from 2004 to 2010 the informal employment as a percentage of non-agricultural employment showed South Asia at 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.88

With regards to the Middle East and North Africa, middle-income Arab nations (Lebanon, Egypt, Jordan, Morocco, Tunisia and Libya) have significant populations of workers that would be classified as informal. Lebanon has 55 per cent of their workers in this category and neighbouring Jordan has a similar landscape. In Egypt, 40 per cent of the country’s GDP is estimated to derive from the informal economy, while in Morocco in 2014 almost 2.4 million were working in the gig economy.89

Like the rest of the world, during the height of the pandemic with various lockdowns, much of MEA and its informal economy suffered heavily, as many were forced to go online and digital.

Image and source: Richie Santosdiaz and The Fintech Times

2. YOUNG AND GROWING POPULATION

Generally, as younger populations adapt and are more flexible to changes, MEA is in a unique position as it has a young population. In MENA, children and young people (0 to 24-year-olds) currently account for nearly half of the region’s population. The population looks to continue growing rapidly so that by 2050, half of the countries in MENA are projected to experience population increases of at least 50 per cent from their 2015 levels with 271 million children and young people. Except Lebanon, every country in MENA looks to grow through various degrees population wise.90

When looking at Africa, it is not only young but also growing fast. For instance, 70 per cent of Sub-Saharan Africa’s population is under 30 years old.91 The African continent is the world’s second largest population behind Asia; it is also the fastest growing population in the world and from its estimated +1.3 billion people will jump to 4.3 billion by 2100. With a median age of 19.7 in 2020, Africa is the youngest population in the world where 60 per cent of its population is younger than 25 years old and over a third are from 15-34 years old. By 2100, Africa is still expected to have the world’s youngest population worldwide with a 35-year-old median age.92

As highlighted with the first edition 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, presents a lack of opportunities for many whereby 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.93 This results in many of them to leave to the wealthy Gulf region.

3. MIGRANTS AND REMITTANCES PLAY A STRONG ROLE

The rich regions, in particularly the GCC, have attracted people from across the world – both from other MEA countries and non-MEA countries – to help develop their country over the past century. This uniqueness of having the world’s richest and poorest countries in the world means that the movement of people – both to seek and to give economic opportunities – is busy in the MEA region. As a result, the remittances corridor for both sending money and receiving money is some of the world’s busiest and there is an MEA country in each of the top five.

Data shows the top five source countries for remittance outflows in 2021 as the US with over $69billion, second-place UAE at $43billion, Saudi Arabia in third place at over $34billlion, Switzerland in fourth at over $29billion, and China in fifth at over $18billion.

For inflow of remittances, Egypt (in fourth) was the top MEA country on the list with India in first place at $83billion, Mexico in second place at $42billion, Philippines in third place at over $34billion, Egypt in fourth place at over $29billion, and Pakistan in fifth at more than $26billion.94

For remittances as a share of GDP, a MEA country led the list at 54 per cent followed by Tonga at 44 per cent, Tajikistan at 34 per cent, the Kyrgyz Republic at 33 per cent and Samoa at fifth at 32 per cent.95 The other rankers, such as the Philippines, India, Pakistan and Egypt, have significant numbers of their compatriots overseas in the MEA region notably in the GCC region.96

Remittances are not only a blue-collar worker concept as middle and upper class citizens who reside abroad will generally send money back to their home countries and/or their loved ones.

Despite being a developed economy, it doesn’t necessarily mean that a country would have its own fair share of emigrants due to various reasons.

This was highlighted in first edition of this report with Israel. The ‘Leaving the Promised Land – A Look at Israel’s Emigration Challenge’ report, 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.97, 98

4. LOW INTERNET USAGE AND RELATIVELY HIGH MOBILE USAGE (BUT MORE OPPORTUNITIES AND GAPS TO FILL)

With regards to the internet, last year save MENA surpass 300 million subscribers and by this year’s end, over half of the population will have internet. 4G is the region’s leading mobile technology, with almost 270 million connections at the end of last year; this has more than doubled in the past five years because of investments by telecommunication companies to upgrade infrastructure and pursue more network expansions. Saying that, 5G still is one per cent of the market but expected to be 17 per cent by 2025 – all according to the Global System for Mobile Communications (GSMA).99

MOBILE

IN

The dispersion of this development generally falls in favour of the developed economies of MENA, with the likes of the UAE and other GCC nations capturing much of this market than its less affluent MENA peers. In Africa, as the previous report highlighted, around 800 million Africans do not have access to the internet (which is the lowest in the world). Other sources put sub-Saharan African with 28 per cent internet penetration, which despite low is growing.100 Aligned to its economic prosperity overall, generally much of the more developed economies have the higher rates – with Egypt (at 71.9 per cent), Seychelles (in second at 79 per cent) and Morocco (in first place at 84.1 per cent). In comparison, the lowest on record is the Central African Republic at a 7.1 per cent followed in second last of Eritrea at eight per cent.101

Back to MENA, in 2019 the SIM card penetration rate exceeded 105 per cent and by 2025 it is expected that the region will have a smartphone adoption rate of over 80 per cent.102 The GCC region (Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the UAE), has the highest and most advanced mobile and smartphone usage and infrastructure. For instance, in the UAE the smartphone penetration rate has reached 99 per cent and UAE smartphone users spend 6.5 hours daily using them on average.103, 104

In Sub-Saharan Africa, almost 500 million (495) were subscribed to mobile services in 2020, a 20 per cent increase from the previous year and representing 46 per cent of the region’s population. It is estimated that 4G adoption in the region to double to 28 per cent by 2025, whereby 5G, still very infant there, will be around three per cent of total mobile connections.105

Despite this, the expansion of mobile coverage is still outnumbering mobile internet – around one in five people live in an area without

mobile broadband coverage. Also, 53 per cent of people is not using mobile internet, even though their area has mobile broadband coverage.106 Despite that, much of it is dispersed as in East Africa. Kenya has a very high rate of mobile penetration among adults at 98 per cent. Later in this report, the solutions for financial inclusion will be highlighted mainly with the popularity of M-Pesa and mobile money.107

In addition, at least one in nine transactions at the point of sale (POS) are now contactless. Mastercard for instance increased its contactless payment total by more than 66 per cent to $136million across MEA last year. Before the pandemic, in 2019 Mastercard saw a 200 per cent increase in contactless payment in MEA. Globally, contactless by 2025 is expected to grow to $18billion, which is almost double what it is now from 2020.113

Back in 2020, payment firm Checkout.com polled more than 5,000 consumers in the UAE, Saudi Arabia, Egypt, Jordan, Qatar, Kuwait, Bahrain and Pakistan and found 47 per cent of consumers expect to shop online more frequently over the next year. Only 15 per cent expect their online shopping frequency to decline while the remaining 38 per cent expect it to remain about the same as now.114

THE MEA CONSUMER – DIRECT & INDIRECT RESULT OF COVID-19 69%

Payments will be cashless in the Middle East by 2023 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

~40% Increase usage of digital channels post-pandemic In Africa

73% MEA consumers shopping more online since Covid-19 30%

In Africa will visit a bank branch less post-pandemic

Image: Richie Santosdiaz and The Fintech Times

Sources: Various including The Fintech Times, Mastercard, MENA Fintech Association. Kaspersky, Economist, McKinsey

v.Government visions through economic development strategies and international trade and economic integration

With an economy, culture, socio-economic as diverse as MEA, they all have one thing in common – economic development priorities. This is not really a MEA phenomenon 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 a MEA exclusive thing, the region as whole – from the rich lands of the GCC to the not so wealthy ones – have some of the most visible changes and clearest economic development and diversification happening in one’s lifetime that it 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 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.

This subsection will look at it from economic development strategies, economic integration and financial technologies relating to economic development:

ECONOMIC DEVELOPMENT STRATEGIES AND IMPLEMENTATION OF THEM

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 MEA have developed their own various economic development and diversification strategies and are also implementing them. Remember earlier with regards to much of the region’s economies being reliant on commodities and other natural resources (such as oil from the GCC to parts of Africa like Nigeria)? With the volatility of oil prices seen this past century so far – coupled with the fact that natural resources are finite – countries in MEA more than anywhere else need visions that will strategically give them focus with clear roadmaps that can channel them.

All six GCC countries have variants of their own wider strategies of some sort (e.g., Bahrain Economic Vision 2030, Kuwait Vision 2035, Qatar National Vision 2030, Oman Vision 2040 and Saudi Vision 2030). The UAE, for instance, not only has other national initiatives, such as UAE Centennial 2071 and UAE Vision 2021, but also variants in the respective Emirates, such as Abu Dhabi Vision 2030. The GCC countries are historically reliant on oil and gas and are using economic development strategies to diversify their sectors so in the future they can keep and grow their standard of living, but it would be newer sectors such as tech and financial services and other ones (including tourism for instance) that would drive much of the growth.

Also, many in MEA, in particular those who are low income, low-middle, middle-income and high-middle income, are using economic development strategies to raise the standard of living in their respective jurisdictions that can help them in the long-term to be more prosperous through building on what they are good at but also expanding on new sectors to fuel economic growth – such as with the tech sector and also boosting their financial services sector. Many in Africa and parts of the Middle East are using them, such as in Egypt (Egypt Vision 2030) or Mauritius (Mauritius Vision or Rwanda (Rwanda Vision 205) or Jordan (Jordan 2025) or Uganda (Uganda Vision 2040) or Kenya (Kenya Vision 2030) or Ghana (Ghana Vision 2020), where they have created their own economic development strategies for the wider future that will hopefully uplift their nation’s income and standard of living through diversifying their sectors.

Also, countries are using them to boost entrepreneurship and home-grown startups. This goes across the board generally in MEA but in places like the GCC this is most evident, as historically most of the local population often works in public-sector jobs and starting a new business and/or working in startups or even in the private sector is still a relatively new concept. The implementation of this can be felt across the region the advent of incentives that governments have launched to hire locals in the private sector, catalysts to build and promote priority sectors, such as fintech (like in Saudi Arabia with the birth of Fintech Saudi back in 2018 which was launched by the Saudi Central Bank (SAMA), the rise of accelerator and incubation programmes and VCs that are being supported by government and/or creating a business entrepreneurship ecosystem to attract them, and prioritising education through sector training and boosting incentives for those looking to start businesses. A recent headline was in the UAE, which looks to be something unique, whereby locals now can take a year off from their government jobs that would allow them to start their own businesses.115

Finally, there are even those that are digital specific and even sub-digital sector specific or even fintech specific ones. Often, they are off-shoots and of course complement the wider national strategies or their own city-wide strategies. For instance, there are MEA countries with digital strategies such as Digital Israel, Tunisia Digital 2020, and Smart Dubai 2021, whereby overall they focus on wider digital transformation as a foundation for economic prosperity and embitterment of people’s lives.

With regards to sub-digital ones, there are strategies focusing on artificial intelligence (AI), blockchain and big data – to name a few. These include Saudi Arabia with its National Strategy for Data & AI (NSDAI) or the Dubai Blockchain Strategy. There are even fintech strategies as well with Saudi Arabia launching one recently.116

For the most part, despite each being tailored to their respective nations, they all have an overall strategy for their economies to achieve some of the following aims:

■ Diverse economic sectors To have economies that are not reliant on just one sector, but various sectors which include the likes of tourism, transportation, tech and fintech.

■ Drive innovation and entrepreneurship Promote innovation in the future economy and drive much of that to be developed with local talent and ideas as well as promoting entrepreneurship to drive these ideas.

■ Digital transformation Digital not only drives sectors, such as tech and fintech, but also wider adoption of technology to prepare for a future digital world (with Covid-19 further justifying the importance of strong technology infrastructure globally.)

■ Job creation and economic growth The pillars of economic development are job creation and economic growth in general so overall economic development strategies aim to do so for the betterment of its citizens.

With regards to fintech, with a combination of market demand but importantly government support, much of the world is building fintech and wider digital ecosystems, and regulatory sandboxes have been appearing throughout the region. In MENA, it started in 2016 with Abu Dhabi Global Market (ADGM)’s RegLab. Afterwards in 2017, both Dubai Financial Services Authority (DFSA), located in Dubai International Financial Centre (DIFC) and the Central Bank of Bahrain (CBB) created their own regulatory sandboxes; the latter was MENA’s first onshore sandbox.117

Also pertaining to fintech, there has been a prioritisation for changes in legislation – as well as incoming ones – that can ensure that not only consumers are protected but that MEA has a positive business friendly environment.

In addition, as talent and human capital is vital, there have been efforts because of the economic development strategies, coupled with market demand, that have seen the region’s ecosystem develop. As much of the region is still infant compared to the likes of Silicon Valley in the US, the changes happening in MEA overall is impressive. This has seen the rise of accelerators/incubators, VC companies, university graduates in particular a push for those who can code and other highly skilled needs.

ECONOMIC INTEGRATION

Economic integration has strong opportunity in the MEA region and the likes of fintech and wider digital are playing strong roles in the implementation of those regional developments.

As anywhere in the world, from a simple free trade agreement between different nations to the other end of it, whereby there is a strong economic and political union, such as the European Union (EU) or even stronger to the point of the US or the UAE, economic integration has a place in much of the world.

Many tend to fall in between – somewhere in the realm of a customs union type arrangement or a strong trade bloc. This includes the likes of the GCC, which was founded in 1981. The economic union allows for free trade among the six nations and movement of its citizens to travel and work among member countries.

The biggest global announcement for economic integration has been in MEA and in Africa. Founded in 2018, the African Continental Free Trade Agreement (AfCFTA) commenced on 1 January last year and was made via the African Continental Free Trade Agreement among 54 of the 55 African Union (AU) nation members.

The list of the potential benefits is long. The World Bank report, ‘The African Continental Free Trade Area: Economic and Distributional Effects’, for instance, highlighted key ones unique to the continent:

■ Extreme poverty would decline across the continent because of AfCFTA, estimating approximately 30 million Africans would be lifted out of extreme poverty

■ Almost 68 million other Africans living less than $5.50 a day would see a boost in incomes

■ It can spur larger wage gains for women (at 10.5 per cent) than for men (at 9.9 per cent)

■ AfCFTA can boost wages for both skilled and unskilled workers – 10.3 per cent for unskilled workers, and 9.8 per cent for skilled workers

■ In terms of extreme poverty, West Africa potentially would see the biggest decline of 12 million Africans (over a third of the total for all of Africa), following Central Africa with 9.3 million Africans then Eastern Africa at 4.8 million and Southern Africa at 3.9 million118

Also, as with free trade agreements in general, a key aim for free trade agreements, such as AfCFTA, would be to reduce bureaucracy to help facilitate trade between member countries in the area.

For example, the estimated $450billion in income gains from AfCFTA by 2035 (this would be a gain of seven per cent), almost $300billion ($292billion) would come from stronger trade facilitation. These benefits, coupled with the wider social advantages, are forecasted for AfCFTA.119 120

Where does fintech and wider digital play a role in economic integration in MEA? There have been clear examples in Africa with the AfCFTA, the Arab World and with the GCC. These show the need of digital and innovative solutions playing the forefront in the integration of economies, in MEA.

AFCFTA AND PAPPS

Last September, the African Export-Import Bank (Afreximbank) and AfCFTA Secretariat announced the operational roll-out of the Pan-African Payment and Settlement System (PAPSS).

PAPSS was launched in July 2019 in the country of Niger during the 12th ‘Extraordinary Summit of the Assembly of the African Union’, which the AU adopted as a key tool for helping implement the AfCFTA.121 So what exactly is PAPSS?

PAPSS aims to be a revolutionary financial market infrastructure that enables instant, cross-border payments in local currencies between African AfCFTA member nations. The infrastructure will help simplify cross-border transactions, thereby reducing the dependency on hard currencies for these transactions. According to Afreximbank, PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system.

At present, over 80 per cent of African cross-border transactions originating from the continent’s banks are currently cleared and settled offshore. This creates inefficiencies and increases the cost of African cross-border payments. Once PAPSS is fully implemented, it is expected to save the African continent over $5billion in payment transaction costs annually.122

PAPSS launching follows a successful pilot phase in the countries of the West African Monetary Zone (WAMZ), with live transactions done in an instant.123 The WAMZ member countries are Gambia,

Ghana, Guinea, Liberia, Nigeria and Sierra Leone – a side note which is also another example of economic and political integration.

With the benefits of PAPSS at a government level – some benefits include promoting financial inclusion (a key challenge in Africa ), increased transparency and easing pressure on current accounts and decreased foreign exchange liquidity. From a consumer and business level, benefits include instant/near instant payments without converting to other currencies as well as improved working capital with payment certainty.124

With PAPSS and a free trade agreement such as the implementation of AfCFTA, it will overall promote synergies, trade and investment, and wider economic development and prosperity in the area among member nations.

How does PAPSS work? According to PAPSS,125 it will ensure instant or near-instant transfers of funds between originators in one African and beneficiaries in another.

First, an originator will issue a payment instruction in their local currency to their payment service provider or bank. Then, the payment instructions are sent to PAPSS. Afterwards, PAPSS will carry out the necessary validation checks on the payment instruction.

With the next step, the payment instruction is then forwarded to the beneficiary’s payment service provider or bank. And, finally, the beneficiary’s bank will clear the funds to the beneficiary in their local currency. In a nutshell, the way the network works is by collaborating with Africa’s central banks. Together, they’ve created a centralised payment and settlement infrastructure, on which African commercial banks, payment service providers and fintechs can join as fellow participants.126

As of 26 April 2022, PAPSS has expanded its footprints across Africa with eight central banks, six switches and about 25 of the largest commercial banks on the continent. PAPSS has signed very significant strategic relationships with other key institutions.127

Since the operational rollout of PAPSS, there have been some strong partnerships and headlines. First, MFS Africa, one of the continent’s most established digital payments networks, has announced that it has joined the PAPSS network. This has extended the network’s reach to over 320 million people across 35 African markets.128

In addition, on 26 April this year, it was announced that PAPPS signed a Memorandum of Understanding (MoU) with BUNA, the cross-border and multi-currency payment system owned by the Arab Monetary Fund (AMF).129

The collaboration between PAPSS and Buna will further these benefits to the Buna network and vice versa. Upon reflection, this collaboration will potentially further integrate the wider MEA region due to trade and historic ties – as well some AfCFTA members are also Arab nations.

Over 80 per cent of African cross-border transactions originating from the continent’s banks are currently cleared and settled offshore

PAPSS also plans to collaborate with other regional and continental cross-border payments systems to extend its range beyond the African borders to support the growth of trade and investments with the African continent and BUNA looks to be one of those clear partnerships.130

As the African continent further grows and much like the rest of the world recovers from not only the Covid-19 pandemic but recent inflation and supply chain woos, there have been underrated success and fintech and wider digital is that spotlight this year.131 How about the Arab World and the wider Middle East?

ARAB WORLD, THE ARAB MONETARY FUND AND BUNA

The Arab Monetary Fund (AMF) is a regional Arab organisation and is headquartered in Abu Dhabi, the UAE. Founded in 1976 and commencing operations a year later, it currently has 22 member countries across the MEA region: Algeria, Bahrain, Comoros Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, UAE and Yemen. According to its website, its mission and vision is to ‘strengthen economic, financial and monetary stability, and development process’ and ‘to lay the monetary foundations for Arab economic integration and promote economic development in Arab countries.’132

So where does fintech and wider digital come to this? There is various example but a clear one with respect to implementation with cross-border payments in the Arab world is Buna.

What is Buna? Buna is a multi-currency payment platform launched in 2020 that clears and settles cross-border payments in eligible Arab and international currencies across the Arab region and beyond, with links to major trade partners. This is the first regional cross-border and multi-currency payment system that supports Arab transactions in trade, investment and financial transfers.

Back in March this year, Dr. Abdulrahman bin Abdullah Al Hamidy, director-general, and chairman of the board of executive directors of the AMF said six currencies account for 90 per cent of Arab transactions (Emirati Dirham (AED), the Saudi Riyal (SAR), the Egyptian Pound (EGP), the Jordanian Dinar (JOD), the US Dollar and the Euro).

This is the aim of Buna – to enable financial institutions and central banks in the Arab region and beyond to send and receive payments in local currencies as well as key international currencies. By offering the various participants to take part, assuming they comply and meet the criteria and conditions for participation, Buna conforms with international standards, principles, and compliance requirements.133

As part of a wider economic development integration across the Arab world, Buna showcases an implementation of a wider vision to foster wider international trade and investment between Arab MEA countries.

First, the AMF and Standard Chartered Bank last year in June signed an agreement whereby Standard Chartered will serve as settlement bank for the Euro in Buna (the cross-border payment system owned by the AMF). At the time, according to a press release from the AMF, the inclusion of the Euro became the fifth settlement currency (prior it was the AED Emirati Dirham, Saudi Real SAR, EGP and the USD, the first non-Arab currency to be a part of Buna).134

The Euro is the world’s second most traded currency after the US Dollar, and it was projected to help further facilitate the growing trade and investment flows and wider transactions between the Arab world and the European Union (EU) and Europe .

Recently in April this year, a workshop was done to elaborate on Buna’s preparations to start the provision of cross-border payments services in euro – which was attended by representatives of the European Central Bank (ECB), Central Bank of Egypt (CBE) and the Pan-African Payment and Settlement System (PAPSS) – to name a few.135

As mentioned earlier, PAPSS and the AfCFTA have signed an MoU. As there are current active AfCFTA members as well as AMF members such as Egypt – coupled with the wider historical and current trade and investment opportunities between the Arab world and Africa, the MOU looks to further boost and foster collaboration among both regions with digital cross border payments in this case.

Across to India, in March, Buna signed an MOU with NPCI International Payments Limited (NIPL), the international arm of National Payments Corporation of India (NPCI), to support the growth of trade and investment flows between the Arab world and India. The aim of the MOU is to implement payment solutions, ultimately leading to interoperability between their instant payment services and allow their participants to exchange cross-border payments in an instant and secure and cost-effective way at any time – according to a press release.136

Finally, other partners have also joined the Buna ecosystem. For example, in January this year, First Abu Dhabi Bank (FAB) has enhanced regional cross-border payments capabilities by going live with the Buna system.

FAB completed its first Buna transaction in EGP and will participate in other currencies offered by the system as part of its adoption.137 The further economic integration of a region, in this case the Arab world with Buna, can set a foundation for further collaborations and boosting economic development through international trade and investment.138

SPOTLIGHT: GCC

According to the GCC, its basic objectives are:

■ Effect coordination, integration and inter-connection between Member States in all fields in order to achieve unity between them

■ Deepen and strengthen relations, links and areas of cooperation now prevailing between their peoples in various fields

■ Formulate similar regulations in various fields including the following: 1. Economic and financial affairs 2. Commerce, customs and communications and 3. Education and culture

■ Stimulate scientific and technological progress in the fields of industry, mining, agriculture, water and animal resources; to establish scientific research; to establish joint ventures and encourage cooperation by the private sector for the good of their peoples

How is fintech and wider digital at the forefront of future economic integration in the GCC? There are three examples.

First, there is Project Aber between the Saudi Central Bank (SAMA) and the Central Bank of the UAE (CBUAE). Created in 2019, it was named Project Aber, which literally translates to ‘one who crosses boundaries’ highlighting the cross-border focus of the project.139 The Aber Project was created by both central banks to explore domestic and cross-border settlement via a single regional currency, with IBM as its technical partner.140

The results of the pilot project in 2020 were consistent with the results of similar pilots conducted by several central banks. These results showed that the distributed ledger technology would enable central banks to develop payment systems at both local and crossborder levels.

The project aims to work as a foundation for more studies and applications conducted by central banks and relevant international organisations, focusing particularly on various potential effects on monetary policies and the stability of the financial sector as well as the impact of various technical possibilities on organisational structures and the sector in general.

According to the report, the name also captures the cross-border nature of the project as well as the hope that it would also cross boundaries in terms of the use of technology.

The results are believed to be beneficial to the central bank community and the financial system in general. Specifically, the report results are expected to contribute to developing clear perceptions of the potential of this technology and its applications in the financial sector.141 It can further see future collaborations in the GCC where fintech and wider digital is the implementor.

A vision to connect all payments in the GCC with the Gulf Payments Company

Second, in the GCC there is the Gulf Payments Company, which was founded in December 2016, and aims to build and develop a system that connects all payments systems in the GCC countries.142 It is a closed joint-stock company headquartered in Riyadh, Saudi Arabia, and owned and financed by the GCC member states.143 Gulf Payments Company, besides its headquarters in Riyadh, also has a branch in the UAE capital city of Abu Dhabi. Its objectives, according to the Gulf Payments Company, are around four points:

■ Develop a comprehensive and flexible infrastructure for Gulf payments that provide various services and payment options to fulfil the market’s demand in compliance with payment laws and regulations

■ Establish a payment system to connect GCC payment and settlement systems and execute financial transactions between GCC member states

■ Implement and operate the Gulf payment system in a safe and stable environment

■ Cooperate with international organisations and authorities, and provide studies and recommendations related to payment systems144

In December 2020, it launched phase one of its ‘AFAQ‘ platform and commenced money transfers between SAMA and the Central Bank of Bahrain (CBB). AFAQ payment system offers a common regional platform that connects Real Time Gross Settlement (RTGS)

systems of each GCC member state, whereby instant processing of financial transfers between the GCC states are executed by end of the day, including gross settlements. It also supports cross-border multilateral net settlement instructions submitted by various regional clearing systems.

AFAQ belongs to a regional infrastructure for the GCC payments that fulfil the market’s demand in compliance with payment laws and regulations. This system supports the settlement and financial transactions between member GCC nations while giving a fullfledged system for safe, efficient, and cost-effective cross-border payments, while leveraging cutting-edge technologies, in accordance with international standards and best practices.145 Ultimately, the system aims to enhance financial stability in the GCC and the Middle East region.146

This year, the Central Bank of Kuwait (CBK) in March announced the start of implementing AFAQ in Kuwait, with the aim of executing money transfers in the local currencies of the GCC countries and other currencies in a short time and at low costs for customers and dealers within a safe and stable environment.

The former governor of CBK at the time, Dr. Mohammad Al-Hashel, stated via a press release that the start of the application of the system comes within the framework of the CBK’s efforts toward developing cross-border payment systems and adopting the latest technologies in a way that improves efficiency and reduces dependence on financial systems and external transfer networks, and contributes to reducing the cost of transferring customers.147 The current governor of CBK is Basel Al-Haroon.148

In terms of the future, according to the Gulf Payments Company, the second phase aims to include other currencies such as the USD and EUR that will enable the processing of cross-border payments besides just same-day settlement for the balances of central and commercial banks’ funds and financial centres.149

Finally, the third example is Buna, which has already been highlighted by the AMF.150 Economic integration can bring further potential in the digitalisation of the region – from the African continent to the Arab World to the GCC and MEA.

ENTER FINANCIAL TECHNOLOGIES

The rise of fintech and its need in MEA is happening. Despite hosting a range of economies including some of the richest and poorest in the world, times are changing. The popularity and necessity (i.e., the pandemic) further solidified the fact that digital is here to stay and the need for technologies to provide solutions is growing; this is a common theme.

Enter financial technologies – or fintech. With a range of estimates, the global sector is at least valued at $300billion and isn’t planning to slow down.151 In fact, some estimates predict that the sector globally will grow at least 20 per cent in the next four years.152

With the overall majority lacking access to financial services, coupled with even essentials much of the West takes for granted (i.e., internet, smartphones and even financial service infrastructure like credit bureaus or data centres), and pressures to digitalise from market trends and other factors in the traditional financial service space, MEA presents a unique opportunity for fintech which will be highlighted in the following chapter.

IN SUMMARY: CHAPTER ONE

KEY TAKEAWAYS FROM THIS CHAPTER

■ MEA is too diverse to summarise

It is difficult to describe easily a region of around 70 countries as the extremities in its economic development are so strong. This region is home to some of the richest countries in the world, notably the GCC, but also the poorest. Even within a country’s own borders the diversity is significant.

■ MEA nevertheless shares similar traits The reliance of natural goods and commodities, such as oil, coupled with much of the population lacking access to financial services (both individuals and SMEs) and the reliance on cash are common trait. Plus, insurance penetration is low overall aside from a few pockets like South Africa.

■ Tech sector is diverse but overall infant Apart from a few areas, notably Israel but also the UAE, Turkey, South Africa, Kenya, Nigeria – the region has much to improve on with its wider tech ecosystem. Unicorns compared to the rest of world are light, with the exception on Israel, but promising solutions from Nigeria, Turkey, UAE, Saudi Arabia, Egypt, and Senegal are contributing with fintech also playing a growing role in that.

■ Financial services sector is diverse but overall, not as developed Except for small pockets, the financial services sector in MEA needs many improvements – from further developing its infrastructure and ecosystem to helping close the gap of financial inclusion. Nevertheless, compared to the challenges of the 2008 financial crisis, lending is more conservative historically and Islamic finance is also playing a larger role. Dubai in other rankings would be considered the biggest financial hub in the region followed by the likes of Abu Dhabi, Tel Aviv, Istanbul, Johannesburg, Cape Town, Manama and Nairobi.

■ MEA is following the trend of needing solutions in a digital transformation world The financial services sector needs digital solutions to transform itself and banks and insurers in MEA cannot escape that. The pandemic further solidified the need of this.

■ Economic integration and collaboration is seeing digital solutions play a major role MEA with AfCFTA, the GCC and wider Arab world are seeing cross-border payment solutions play a strong implementation part, validating the foster of economic and political integration. MEA countries historically had to rely from outside the region, mainly the West, for cross-border payments.

Chapter

Two:

Fintech Landscape in the Middle East and Africa

Chapter Two spotlights the wider fintech sector in the Middle East and Africa (MEA)

– first by analysing the sector as a whole and then by breaking down the subsectors of fintech that will be highlighted from payments, money transfers and remittances and then the non-payments, money transfers and remittances subsector that will include the likes of lending, open and embedded finance, digital currencies – to name a few. The chapter will conclude with an overview of the wider ecosystem that impacts fintech as well and then help transition to Chapter Three through its breakdown and ranking of key fintech hubs in MEA.

i.Overview of fintech and growth in MEA

The value of the global fintech industry is estimated to be at least $300billion. Last year, globally venture in-

vestment totalled $643billion (92 per cent higher than in 2020 at $335billion).153

Fintech, despite its relatively short reign in its current form, is making impact across MEA. In Sub- Saharan Africa, it is estimated this year that fintech is contributing $150billion to the region’s GDP.154 In Israel, fintech is estimated to contribute now around 11 per cent to the country’s GDP.155

In terms of value, in Turkey, the fintech industry there is estimated to be worth at least $15billion, growing at least around 14 per cent per year.156 In the Arab World, the fintech sector is estimated to be at least $15billion now.157

MENA and the African continent has seen their own ground-breaking records with $2.6billion last year for the former and the latter raising $1.8billion in just the first quarter this year alone. So, how many fintechs are there in MEA? The following has a breakdown of some of the countries with regards to that.

While looking like a lot overall, the estimated total number of solutions – around 3,000 – is not a true reflection of MEA as many of them are cross-border solutions. Even when looking at the estimated total number of fintechs it still pales in comparison to the UK. London is estimated to have over 2,500 alone.158 Globally, last year there were more than 26,000 fintechs.159

In regard to where many of the fintechs are, as highlighted in the previous version of this report, in terms of the Middle East region the majority are either in Israel, Turkey or the United Arab Emirates, with a sizeable and growing number in countries, such as Bahrain and Saudi Arabia. With regards to Africa, the big four – Egypt (also in the Middle East), Kenya, Nigeria and South Africa have the biggest concentrations but there are significant and growing number of countries with sizeable numbers such as Ghana, Uganda – to name a few. It is estimated that there are 1,000 fintech solutions in continent.

In the Middle East, not counting Israel and Turkey, more than half of total fintechs are based in the UAE, specifically in Dubai, according to Dubai International Financial Centre (DIFC).160

In terms of Islamic finance and fintech, there is a growing rise in fintech of those who are also Sharia compliant. For instance, according to a Global Islamic Finance Report produced by DinarStandard and Elipses, there are more than 250 Islamic fintechs operating globally in both Organisation of Islamic Cooperation (OIC)

countries and non-OIC. With the Islamic fintech market size, although estimated to be worth $49billion, it still is only less than one per cent of current global fintech market size based on transaction volumes. Islamic fintech in OIC countries, which many are MEA countries, is projected to grow at 21 per cent to 4128billion by 2025. At present, the following are the top five Islamic fintech market sizes (2020): TOP FIVE ISLAMIC FINTECH MARKET SIZES (2020)

While most of the present Islamic fintechs, many in their infancy, are active in more traditional areas such as payments, wealth management, lending, raising funds and alternative finance at present. The further adoption, growth and digitalisation of Islamic finance as a whole can present further opportunities for it to further grow globally.

Finally, in terms of the fintech sector, what exactly do these fintechs do and what subsectors do they fall in? Paytech, money transfer & remittances

KEY FINTECH SUBSECTORS

Historically and to this day, much of the activity of the MEA region has been around payments, paytech, money transfers and remittances. Nonetheless, as the sector has evolved other fintech subsectors on the rise include non- payments: gametech, wealth management and wealthtech, digital currencies (including cryptocurrencies), lending, regtech, open and embedded finance and insurtech.

Africa, based on number of investment deals last year, shows a diversity in its landscape whereby while payments and remittances dominate, lending and wealthtech for example show strong contention. With regards to the Middle East and North Africa region, specifically the Arab World, in terms of its product category it is also payments and remittances dominated at almost half from the previous image.

Based on the previous image of the overall key subsectors of fintech, this Chapter will now mainly focus and breakdown MEA and discuss both the payments, paytech, money transfers and remittances subsector and the other non-payments (gametech, wealth management, digital currencies, lending, open and embedded finance, regtech and insurtech).

It is important to not forget the fintech super app – as the region has seen quite a few fintechs as well as those in the financial services sector and even telecoms (i.e. Safaricom with M-Pesa) or even the Post Office (such as in Tunisia) that are not only involved in multiple subsectors in fintech but like the traditional financial services or telecoms for instance have gotten into the fintech space through market need and reaction.

Insurtech Regtech Lending Open & embedded finance Digital currencies (i.e. cryptocurrencies)

Source: The Fintech Times, Global Islamic Fintech Report

CASE STUDY ONE: SAFEBODA IN UGANDA Kampala, the capital and largest city of Uganda, is home to native Ugandan-born Safeboda. The company predominately is a transportation company that utilises mainly boda drivers to transport people and goods. In countries like Uganda the boda or motorcycle mode of transportation is extremely popular. The company was co-founded in 2017 by Ricky Rapa Thomson, Alastair Sussock and Maxime Dieudonne and pre-Covid in early 2020 had 25,000 boda drivers.161

Then Covid arrived. Nonetheless, the company has morphed and has even obtained a payments licence from Uganda’s central bank to officially be part of the fintech space.

The company not only transports people but, through its app and with USSD technology, users can also use mobile money among other things.162, 163

CASE STUDY TWO: M-PESA IN KENYA

Launched in 2007, M-Pesa – Africa's first mobile payments service – has been a major driver of financial inclusion, and now has 51 million customers across seven countries and 465,000 businesses. The service is provided by 600,000 agents across Kenya, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana and Egypt. M-Pesa processes more than 61 million transactions a day, making it Africa's largest fintech provider, and it has attracted 42,000 external developers to create additional services for the platform. It is often referenced as how financial inclusion is happening in the continent and the wider trend of mobile money which has made its way throughout the rest of the world, in particular in emerging and developing economies.

Starting off humbly with mobile payments the company has now become a digital financial services provider and offering a wide arrange of services that spans across various fintech subsectors beyond just payments. Last year, M-Pesa launched the M-Pesa Super App, which is designed to be a customer's lifestyle companion connecting them to services they need in a typical day including shopping, restaurants and food delivery, transport services, and government services. It also launched M-Pesa Business Super App, which enables any business on the service to run a virtual storefront providing their services through M-Pesa Mini Apps.164

The company is owned by Safaricomm, the telecommunications company headquartered in Nairobi, Kenya; Vodafone is a shareholder of the company.

Source:

Santosdiaz,

and The Fintech

ii.Fintech sector in MEA

The following subsection will be broken into two parts – first the payments, paytech, money transfer and remittances subsector and the second part by highlighting the other subsectors with respect to MEA.

a. PAYMENTS, PAYTECH, MONEY TRANSFERS AND REMITTANCES OVERVIEW

Payments and paytech generally across the MEA region dominates the wider fintech ecosystem. How does that play out today? At one point, around 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 across its various subsectors, payments continue to dominate the region.165

For example, fintech’s largest segment market was projected to be digital payments with a total transaction value of over $122billion in Africa this year.166 By looking at the past few years, such as highlighted by a report by Medici, African Fintech Report 2020 – in terms of investment deals, it was payment gateway/processor startups who raised nearly half of the total funding value in Africa. Just shy of $260million raised the maximum amount of funding, while mobile/digital wallets startups amounted to the second-highest amount of funding with a nearly 36 per cent share of the total funding amount.167

Despite the increase of other subsectors in fintech, 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 been traditionally reliant on cash and is home to some of the richest and poorest regions, offering the world a significant corridor for the likes of remittances and

wider international trade and investment to foster. Ideally, payment digitalisation can continue to help the MEA region by making 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.168

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 United Arab Emirates (UAE) grew at an annual rate of more than nine per cent between 2014 and 2019; and Saudi Arabia, which 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.169

McKinsey’s same study found that three-quarters (80 per cent) estimated that non-cash payments had risen by more than 10 per cent across the region as a result of the pandemic, and 43 per cent believed that the increase exceeded 20 per cent. Data from some countries indicate even higher rates of growth: Saudi Arabia’s digital point-ofsale (POS) transactions doubled in the year to January 2021.170

In the UAE alone, non-cash payments are expected to account for 73 per cent of transaction volume by 2023 (compared to 39 per cent in 2018) and are growing strongly across all payment types (B2B, B2C, B2G to name a few) – according to a report from the MENA Fintech Association in its first volume of the SHIFT report.171

One example of potential growth is embedded finance. Despite its infancy in MEA compared to the rest of the world, there appears to be potential in its acceptance and adoption. From various sources, such as ResearchandMarkets.com, MEA’s embedded payment industry is

expected to grow and reach to over $5.8billion in 2022. It is expected that its compound annual growth rate (CAGR) will be 26.7 per cent from 2022-2029, whereby in 2029 the revenues will reach over $21billion (21,248.6).172

Various studies during the pandemic have highlighted the wider MEA region, as per the rest of the world, in adopting digital payments.

For instance, the previous McKinsey study discussed showed in its survey that 90 per cent predicted that at least half of new users will stick with digital payments rather than revert to cash. The same study also highlighted that over half of the survey’s respondents believed that strong growth in non-cash payments will continue over the next five years; resulting in a cumulative increase in digital transactions of over 50 per cent above 2020 levels across the Middle East.

Also, according to the Mastercard New Payments Index, 95 per cent of consumers in MENA are considering emerging payments, including the likes of wearables, biometrics, digital wallets and currencies, and QR code, in addition to contactless payment solutions. The study showed that 88 per cent of consumers in MENA have more ways and access to pay than back in 2020, and that three- fourths of consumers acknowledged that digital payment methods helped them save money.173

Like much of the rest of the world, digital wallets including mobile wallets, have become popular in the region. According to a study of close to 800 merchants in Australia, Brazil, Mexico, the UAE, UK and USD, 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.174

impact of covid-19: 64 per cent of those surveyed in the UAE reported an increase in their online spending – 87 per cent of those surveyed also stated they would continue to shop online in the post-pandemic world. To note, digital payments have remained the preferred method for transactions, with continued strong use of contactless solutions, including cards, digital wallets and mobile payments.177

A different Visa study highlighted that over half of UAE customers by 2024 plan to go cashless, which is much higher than the global average of 41 per cent.178 Payments continue to be a challenge to the MEA region due to it being largely fragmented. One way this is being worked on is via economic integration with fintechs and wider digital organisations enabling solutions like cross-border payments.

For example, as mentioned in Chapter One, the examples of the Aber Project, Buna by the Arab Monetary Fund (AMF), and PAPSS in Africa are great ways to show the effectiveness and importance of payments. Despite the challenges of the pandemic and the late adoption of digital transformation, when compared to other parts of the world, the MEA payments and paytech landscape presents exciting and unique challenges that fintech and wider digital solutions are helping to combat.179

To further understand more on the payments, money transfers and remittances sector in MEA, this subsection will elaborate more on key aspects that not only are making headlines globally and also are playing its increasing role in MEA – remittances, mobile money (with a spotlight specifically on East Africa) and buy now, pay later (BNPL). They and the subsector as a whole will showcase why this subsector dominates the region as a whole. To note, BNPL for this context will

During the previous first edition version of the The Fintech Times‘ Fintech: Middle East and Africa 2021 Report, there were other highlights back that confirm more recent studies’ findings as well. First, this included a Checkout.com study in September 2020 across eight countries (UAE, Saudi Arabia, Egypt, Jordan, Qatar, Kuwait, Bahrain, and Pakistan) that highlighted nearly 2,500 consumers would expect to shop more frequently in 2021. Mastercard also highlighted that at least one in nine transactions at the POS were now contactless – in 2020 Mastercard increased its contactless payment total by two-thirds to $136million across MEA.175

Last year, Visa also published a study in regards to consumer attitudes towards digital vs physical payments (as well as cryptocurrencies) following the pandemic: Visa COVID-19 Central Europe, Middle East and Africa (CEMEA) Tracker.176 Visa’s findings highlight significant changes in attitudes to e-commerce following the

be in this section although it can be argued it is also a lender (most likely in the future with stricter regulations globally around it).

REMITTANCES

While remittances encompass all socio-economic backgrounds, much of the attention focuses on the blue-collar workers, due to them predominately lacking access to traditional financial services. As what Chapter One highlighted, 57 of Africans remain to be unbanked and in the Arab World that is 69 per cent. Also, as the region, in particularly the GCC and Israel, are home to nationals from across the world –predominately from South Asia such as India, Pakistan and Bangladesh as well as South-East Asia (in particular from the Philippines), many of them work blue collars jobs and not only are unbanked in their temporary home countries but also in their home countries. For instance, over 36 million Filipino adults remain to be unbanked.180

It was highlighted in Chapter One as well that many MEA people often work and move to more affluent areas in the region, in particular the Gulf, and their countries they come from (for instance in Egypt) have a high rate of unbanked – which there it is at 67 per cent.

The ‘traditional’ mindset – one can argue – has been in many parts due to the lack of access to financial services – aka the unbanked and financially excluded – that the region has faced. This has resulted in many of them resorting to traditional money houses and exchanges that will charge high fees to wire money overseas; on average, globally, currency conversions and fees amount to seven per cent of the total amounts sent according to the World Bank on average.181, 182

To note though, despite this, it often resorts to the sole option as the overseas worker might not only have access to a bank account in the adopted country but also in his/her home country as well.

And, if they can which unfortunately many blue collars will not, banks generally globally will large the most in fees for foreign transactions. Therefore, whether it be banks or money exchanges or other means, the fees are negative. After all, for all socio-economic backgrounds and in particular, a blue-collar worker where seven per cent, for instance, is taken just in fees, how can that be alleviated so then their hard-earned wages go to their home countries and loved ones? Here comes fintech and wider digital solutions.

The rise of fintech globally has made its impact on the global remittances industry and can see its impact in the MEA region as a whole. For instance:

■ Access via mobile phones – for a region like MEA with an overall high rate of mobile penetration globally, the ability to bypass a traditional exchange house and go direct to the ‘action’ via a smartphone or even a basic mobile phone, as what has been seen notably in East Africa with basic USSD technology, that remittances can thrive.

■ Lower exchange rates – for various reasons but mainly due to its lower operating costs and less physical footprint – fintechs can pass on their savings to consumers which can help ease the traditional average seven per cent fees. Although fintechs are like any business, their less physical footprint can allow for lower operating costs that can be passed down. Also, their cost-saving and digital footprint can help bring lower fees (in some cases none at all) to the consumer.

■ Options overall – fintechs have offered options for people that don’t necessarily correspond with a simple, for example, “I’ll exchange my Qatari Dinar for Filipino Pesos.” Fintech- powered remittance apps have given customers a different variety of payment modes. This includes various credit and debit cards (with those to do may often levy card payments). In addition, besides bank transfers, other potential options can be Google Pay, Venmo, Apple Pay – to name a few.183 Also, there has even been, coupled with its own general rise, the growth of other currencies aka cryptocurrencies that have been other remittance options.

This has included non-MEA solutions that have brought solutions to the region as well as MEA-born ones as well. Also, whether it be traditional exchange houses and/or purely fintechs and other digital solutions, the ecosystem has adapted

to embrace its digitalisation of it, going in parallel with the wider popularity of digital transformation.

For example, London-headquartered TransferWise, now known as Wise, in 2020 expanded to the MENA region with the launch of its low-cost cross-border online money transfer service in the UAE, by opening an office in the Abu Dhabi Global Market (ADGM).

There are also those in the traditional remittance space adapting and embracing the trend. For example, in October last year, Western Union announced that clients of KCB Bank Kenya, Diamond Trust Bank and the Kenya Post Office Savings Bank would be able to send and receive money via their mobile banking apps. Competitor MoneyGram last December (with no relation but coincidence) partnered with urpay (a digital wallet powered by Saudi Arabia-based Neo Leap) on cross-border money transfers.184 In terms of fintechs, examples abound but to spotlight on say, the UAE for example, they include the likes of Denarii, EMQ, NOW, REMITR, Wise and Xare;185 others in the GCC region include the likes of Qatar-based CWallet.

With the overall restrictions and coupled with the instant rapid decline in sectors that traditionally require face-to-face and generally a blue-collar workforce like hospitality and tourism,it’s interesting to see that the global remittances flow of money, even in 2020, wasn’t as badly hit

Due to the complications of the pandemic, in particular, with its early days when it was difficult due to lockdowns to leave ones at home, have further solidified the importance of digital solutions that were happening already in the pre-pandemic world. In particular with remittances, for those with limited or no access to financial institutions, the dependence on the likes of fintech and/or fintech and/or digitally-powered solutions helped loved ones who were abroad to send money back home.

With the overall restrictions and coupled with the instant rapid decline in sectors that traditionally require face-to-face and generally a blue-collar workforce like hospitality and tourism, it’s interesting to see that the global remittances flow of money, even in 2020, wasn’t as badly hit.

To spotlight, despite the pandemic, according to KNOMAD, the latest Migration and Development Brief, remittance flows in low and middle-income economies remained resilient in 2020 by registering a smaller decline than previously projected.

This was $540billion in 2020, only 1.6 per cent below the 2019 figure of $548billion. To note, this decline in 2020 was much lower than the one during the 2009 Global Financial Crisis, which was at nearly five per cent (4.8). It was also far lower than the fall in FDI flows to low- and middle-income countries, which, excluding flows to China, fell by over 30 per cent in 2020.186

In other words, despite the challenges that the pandemic brought, right before March 2020 the world was generally in a great state where despite the challenges mid-year that there was much resilience

in the overall global population across various aspects of behaviour – remittances being one of them.

MOBILE MONEY: SPOTLIGHT EAST AFRICA

In terms of the African continent, from when the first edition of when the report was written in 2021, it was stated then that 800 million in Africa still do not have access to the internet. And this is where mobiles really have accelerated Africa and have positioned it to be a world leader in the space. This gap in services has led to innovative solutions in response.

A report from the International Monetary Fund (IMF) called ‘FinTech in Sub-Saharan African Countries’ highlights that SubSaharan Africa has become the global leader in mobile money transfer services, which has brought widespread access to financial services. It says, “East Africa is leading in mobile money adoption and usage. Built on an appropriate pricing strategy to attract customers, suitable regulation, and a reliable and trustful network, Kenya represents today one of the most successful cases regarding the use of mobile money.”187

For instance, just to see how impactful this has been in Senegal for example, over 70 per cent of adults 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.188 Also, in Somalia, mobile money usage is around 85 per cent of the population, which is much higher than say the UK (25 per cent in 2020) or the USA (29 per cent from last year).189

Unique to MEA is due to a combination of factors, such as in Africa where, as a whole, mobile phones have helped close gaps that those in developed economies take for granted like internet or financial services. And this is where fintech really has made an impact via those mobile devices. This has started with the likes of M-Pesa from Kenya, which helped address a need and has given many Africans access to financial services such as being able to access payments and receive/send money – even with just a basic mobile phone that uses unstructured supplementary service data (USSD) technology. The company has become the largest mobile wallets, and arguably fintech, in the continent.190

It is quite amazing that solutions like M-Pesa made a strong impact on the average African with just basic USSD technology. It is remarkable to note that it was launched in 2007,191 before the word fintech really became a thing in its current definition and even before the 2008 Global Financial Crisis that helped accelerate fintech in its current state. Besides M-Pesa, other players in the African continent include the likes of Airtel, MTN – to name a few.

According to the State of the Industry Report on Mobile Money 2022 by GSMA, in 2012, mobile money was largely an East African phenomenon, with Sub-Saharan Africa accounting for 84 per cent of all active (30-day) accounts. However, today that has spread globally and that innovation is now being enjoyed by the rest of the world. Nevertheless, Sub-Saharan Africa still accounts for half (53 per cent) of all total global 30-day active mobile accounts.

The global annual value of transactions last year surpassed $1trillion (with Africa accounting for 70 per cent of that value). Cash-in cash-out and person-to-person (P2P) were the bulk of the value but there has been more noticeable growth with regards to our digital lives (also thanks to the pandemic) like paying school fees or online and offline merchants and also remittances.

With P2P, it topped $386billion for the first time last year, with transaction values growing the fastest in MENA at 49 per cent and followed by Sub-Saharan Africa at 40 per cent.192

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.193

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.194 In particular with its large population, Ethiopia in my opinion is a country to watch for future fintech growth. Beyond just Sub-Saharan Africa, 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.195

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 but hopefully with government aspirations as mentioned in Chapter One, 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.

On a final note, time will tell but with the African Continental Free Trade Area (AfCFTA), in particular, Africa as a whole can further benefit as cross-border payments, in particular fees and other hurdles and inefficiencies, remains a challenge.196 Therefore, mobile payments could only benefit from further economic integration with its fellow African nations.197

BUY NOW, PAY LATER (BNPL)

Buy now, pay later (BNPL) has bagged the headlines and received its fair share of the fintech spotlight. But how does it relate with regards to the MEA region? Globally the concept of buy now, pay later isn’t anything new. There have been previous versions of it – it’s just that the current BNPL is a digitalised experience and almost in a way like a ‘layaway’ plan in reverse. Typically with a layaway, one pays in instalments and then once paid in full they can get the item. Whereas with BNPL, one tends to get the item upon the first instalment.

Prior to the BNPL craze there were (and still are) aspects of a BNPL in terms of shopping. Retailers in the United Arab Emirates (UAE), such as electronics retailer Sharaf DG, offered a Flexipay198 option, while in South Africa, furniture and appliance retailer Bradlows (owned by JD Group) offers lay-by.199

The idea of paying in instalments is also quite common in Latin America – think Brazil and the ‘parcela’ concept. Meanwhile, in Turkey, instalments have been a common practice with banks as well as cards that are accepted both online and in store.200 As with fintech generally in other parts of the world, it is still relatively infant in the MEA region and BNPL is no exception. However, MEA has been playing catchup with the global fintech ecosystem and the pandemic further solidified the urgency for a wider digital experience.

The majority historically in much of MEA have been financially excluded and also the ecosystem generally hasn’t provided the proper mechanisms (i.e. credit bureaus, for example) to give the data to provide the mechanism for a more advanced financial services ecosystem.201 In the GCC region, home to some of the world’s richest nations, traditional layaway type plans may not have been as popular as they were in say the US Canada or Europe.

Enter BNPL – the global craze that has seen much success in particular in Europe, North America and parts of Asia Pacific (APAC) – including Australia and New Zealand. The likes of Klarna from Sweden and Afterpay and Zip from Australia and Affirm and Sezzle from the USA have boosted the BNPL craze globally to the point that the BNPL’s overall rise in popularity could lead the industry to rack up almost $700billion ($680billion) in transaction volume worldwide by 2025. This means that it would have a hat compound annual growth rate (CAGR) of 13.23 per cent from the $285billion the industry was estimated to record back in 2018.202 Also, facilitators (aka those companies that are enabling their merchant network to offer direct providers’ BNPL solution) is also a long list that includes the likes of Visa, Mastercard, Stripe and Shopify – to name a few.203

While one could use BNPL in store, its nature really thrives via e-commerce, which the pandemic back in March 2020 helped really accelerate the popularity at home. Remember those purchases we made via retailers like Amazon or others? Well, BNPL helped many buy their both necessary and not so necessary items while many across the world were confined to their homes due to various lockdowns to stop the spread of the coronavirus. Has BNPL caught on in the MEA region? Well yes to an extent.

BNPL IN THE MIDDLE EAST

The GCC region has included local players such as Saudi Arabia’s Tamara and in the UAE includes Postpay, Tabby, Payby, Cashew and Spotii as well as Sharia-compliant Taly from Bahrain. As highlighted

earlier, the GCC and Israel are some of the world’s richest nations in the world (especially in the GCC with Qatar and the UAE boosting very high GDPs per capita) – so can BNPL work there?

From an interview with Tamara’s COO Turki bin Zarah, it was highlighted that the medium household income in the GCC is similar to that in the US or Western Europe. Also, Tamara in this case offers a better experience and doesn’t necessarily target one income group per say.204, 205 Not everyone is driving Ferraris and drinking coffee with gold flakes. The region is home to a wide variety of incomes and nationalities where in particular Qatar and the UAE, the local population for each of them is only around 10 to 15 per cent and the vast majority are expats from across the world – both the professional class and mostly also blue-collar workers.

Israel – the Startup Nation – has also seen BNPL grow in the country. Some Israeli-born BNPLs include US-Israeli Sunbit, which last year hit unicorn status, as well as Splitit, which already has a market cap of $150million as of last year. There is also Jifiti, which provides a technological solution that enables banks to enter the BNPL sector.206, 207

BNPL IN AFRICA

The African continent, which generally is overall has had a significant proportion of its population be financially excluded, presents a unique opportunity for BNPL. South Africa, in comparison to other African countries, offers a more advanced financial ecosystem and has had the traditional lay-by as they call it there.

The popularity of BNPL really grew in the continent during the start of the pandemic. It is expected that in Africa, the BNPL market size will be at least $7billion (7.18 to be exact) by the end of this year.208 Much of the popularity, as with fintech, is shared within the four major fintech hubs in the continent – Nigeria, South Africa, Kenya and Egypt – as highlighted in last year’s edition of this report.

To spotlight, for instance, in South Africa alone this year BNPL is expected to grow almost 100 per cent (97.5) to reach over $450million ($457.3) by the end of the year.209 In the African continent, some of the biggest players include the likes of Payflex from South Africa (which last year Australian BNPL Zip took a 25 per cent stake), Lipa Later from Kenya, Credpal from Nigeria and Sympl from Egypt.

THE CHALLENGES AND OPPORTUNITIES OF BNPL GLOBALLY AND IN MEA

In terms of the wider BNPL ecosystem, a major challenge has been around the regulatory aspect of it. Given its relatively new concept in its modern digital form, many governments are grasping on how to overall protect the consumer from it. The question remains – although it isn’t a loan there are still implications where consumers could miss their payments and buy more outside of their budget nor ability to pay back their items. After all, as they offer consumers essential free access to credit and unlike traditional credit there is little to no prior credit checks – meaning its accessibility is wide.210 In particular, the digitally savvy Gen Z and Millennials have embraced BNPL.

On 20 June, the UK announced a series of initiatives that seek to offer more protection to consumers, and raise awareness around the full implications of using BNPL services. Expected to come

MEA2022: THE FINTECH

into action from 2024, any lenders providing the service will need to be approved by the UK’s Financial Conduct Authority (FCA). They will also be required to perform regular affordability checks to ensure that the loans they’re offering are affordable for the customers who receive them.

Advertisement for BNPL should be equally clarified, with the announcement stating that they should be ‘fair, clear and not misleading’. The announcement also provides more options to borrowers who feel like they’ve been abused, with the Financial Ombudsman Service (FOS) now directly accepting BNPL complaints from consumers. It will be interesting to see if other jurisdictions across the world will follow the UK’s lead in this.211

Nevertheless, despite its recent challenges, BNPL presents an opportunity and the MEA region could benefit from it. This can see the growth and its further adoption of course. It will be interesting to see the likes of the bigger players globally if they would enter and penetrate the MEA region through their own or through acquisition and or/ investment, as in the case of Zip with Payflex. Zip also did something similar in the Middle East when it acquired Spotti last year for $20million.212

In addition, even UK-headquartered unicorn Checkout.com led a major investment round last year with Tamara valued at $110million.213 Even IKEA has gotten in on the action as Ingka Group, an IKEA operator which owns 389 IKEA stores and e-commerce operations acquired a minority stake in Israeli fintech and BNPL

solution Jifiti last year with a $22.5million investment.

There definitely is interest from the non-MEA world in the MEA region. More of these types of investments will most likely happen. In particular, as the largest players like the Klarnas further saturate their home markets and MEA – which compared to North America, Europe and parts of APAC – is still generally more an infant market yet is home to nearly one-fourth of the world’s population. Also, the MEA population is generally young and tech savvy with some of the world’s largest mobile penetration percentages – like with mobile in East Africa for instance or smartphones in the GCC region, such as in Saudi Arabia.

Also with the UK, a further integration like PAPSS and Buna that were highlighted in Chapter One can present further opportunities. In addition, BNPL has also been playing a role in embedded finance, which will be highlighted later in this same chapter. Buy now, pay later will continue its grow despite its current challenges and MEA and other parts of the world will offer that predicted acceleration the subsector of fintech has already enjoyed thus far.214

b. 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. DIGITAL, CHALLENGER AND NEOBANKS

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

While still in their infancy compared to much of the world, neobanks are playing a growing role in the region. As highlighted earlier in this report, it remains a challenge for not only individuals but also SMEs with respect to accessing traditional financial services; this even includes something what appears to be simple as opening a bank account. The growing market of neobanks and challenger banks can be best summarised according to two ways:

First, which could be more unique in MEA than say the UK for example, is that neobanks have been taken on by the banks themselves where they have launched their own neobanks and/or have acquired one. Examples include in the Middle East with the likes of Liv by Emirates NBD or Mashreq Neo by Mashreq Bank and ADCB Hayyak by ADCB or Israel’s Pepper by Leumi Bank or ila Bank by ABC Bank and meem by Gulf International Bank of Bahrain or Turkey’s Tosla through its AkOde subsidiary of Akbank. Also, there is STC Pay, which although isn’t a bank is part of the major telcom operator of Saudi Arabia, STC Group.

instance, in Israel, in January earlier this year, the country had its first bank in over 40 years. This one though is a digital bank called One Zero. This launch follows Israel's open-banking reforms that have been adopted last October, also enabling customers to move from one bank to another more easily. Much of the new bank is being powered through AI, as with other neobanks and challenger banks, in terms of evaluating a customer’s financial situation.217

Heading to Africa, it is 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. In terms of users, the following lists the top 10 in Africa in 2021:

THE TOP 10 USERS IN AFRICA IN 2021

Rank Neobank Country of origin Number of customers

1st Bettr South Africa 6.5 million

2nd (tie) TymeBank South Africa 4 million (part of Tyme Group of companies based in Singapore)

Chipper Cash US HQed and 4 million Pan- African such as Nigeria, Uganda to name a few

4th Alat Nigeria 1.5 million

5th Zazu Zambia 1.1 million

6th Kuda Bank Nigeria and UK 500,000

7th Carbon Nigeria 660,000

8th (tie) Bank Zero South Africa 500,000

Mama Money South Africa 500,000

10th Rubies Nigeria 90,000

Other players include the likes of Orange Bank, which is a subsidiary of telcom Orange from France, which in particular has geographical coverage in West Africa, as well as Egypt’s 7aweshly.

In November last year, the Central Bank of Nigeria (CBN) gave provisional approval to MTN of South Africa and Airtel of India (both large telcoms with a large presence across much of Africa) to operate payment service banks in Nigeria. This decision opens up Nigerians, particularly the unbanked, to the telecoms payment platforms of MoMo and Smartcash. They could join the ranks of local telecom operators like Glo and 9mobile which already have licences.218 In other words, go at it alone rather than partnerships.

Second, there are those who are independent such as Now Money and Rise or Dopay from Egypt. To note, they partner with a bank to operate via the bank’s licence – therefore NOW Money with Commercial Bank of Dubai (CDB), Rise with United Arab Bank and Dopay with Barclays and Visa.215 There is also Papara from Turkey, which in 2016 received approval 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 today is a member of the Mastercard, Visa and Interbank Card Centre – all according to its website, which highlights it current has over 12 million users.216

The interest and headlines are being made in this subsector. For

Compared to much of the world, in Africa, it appears that with respect to digital banks that telecoms play a larger role in terms of at least inspiring the current state of accessibility of fintech to the masses, which one can argue directly has brought today’s independents with digital banks with regards to offering a disruption in particular to those that are unbanked; as seen telecoms are also playing a part in that as well with their own offerings. Given that telecoms in much of Africa with mobile money have helped revolutionise it, gives them a strong advantage to do so.

This also means that independents, such as those mentioned earlier, have a larger role to play especially as much of the market remains to be unserved or underserved. Saying that, banks in Africa have had to react and the very least launch their own mobile money product – such as Standard Bank from Africa with Unayo last year.219

Source: BCP Digital Banking in Africa

While still in their infancy compared to much of the world, neobanks are playing a growing role in the region. It remains a challenge for not only individuals but also SMEs with respect to accessing traditional financial services

Source: Richie Santosdiaz and The Fintech Times

2. GAMETECH

As a whole, Gametech might be an unusual pairing with fintech but it really isn’t. After all, a good summary of this relationship comes from M2P from India who says: “While most online games offer in-app purchases that enhance a player’s gaming experience, like upgrade their avatar or unlocking bonus features that help them advance in the game. This means that thousands of gamers are now opening their digital wallets to take advantage of the slashed prices and limited offers that are often irresistible to pass up. This is why online gaming is now a part of the fintech ecosystem.”220

Gametech in MEA has strong potential – home to a young population and, in parts of the region, a digitally savvy one.

The retail industry is worth over $3.5trillion worldwide (preCovid-19 figures) and the video game market hopes to carve out a small slice, expected to be worth around $300billion by 2025.221 The region, such as the GCC with a high mobile penetration and wealthy populace, presents opportunity for gametech.

The various economic development policies and strategies in MEA heavily promote tech and wider digital transformation. With regards to Africa and parts of the Middle East, the large youth population and the potential for digital transformation across all spectrums presents strong opportunities – both 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.

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

MEA also offers a strong opportunity for the gaming and gametech industry because it is home to one of the most spoken languages in the world – Arabic. Across the Middle East, including Israel (which Hebrew and Arabic are the two official languages) and much of Africa (not counting the language’s importance for the world’s Muslim population), Arabic is the world’s fifth most spoken native language in the world (behind Hindi, English, Spanish and Mandarin). 70 per cent of the Arab world use Arabic as their default language on their smartphones.223

In 2016, it was estimated that the Middle East and North Africa (MENA) region spent $3.2billion broadly on games. Specifically with mobile gaming, by end of this year it is predicted that this alone in MENA will stand at $2.3billion.222 With regards to the Middle East, according to Statista, the shared revenue of the video gaming industry in the Middle East was evaluated to be at around $3 billion in 2017, with the biggest markets including Turkey, Saudi Arabia, and the UAE.

ARPPU is the average revenue a paying user generates during a specified timeframe. It is actually Saudi Arabia that has the world’s highest ARPPU – $270 compared to China (which, as the world’s biggest gaming market, is at $32 according to the same source). Saudi Arabia’s large youth population, where 70 per cent is under 30 years old, combined with a large population of 35 million people showcases an opportunity for gametech. In particular, prior to Saudi Vision 2030 and the opening of the Kingdom economically (the country’s national economic development and diversification strategy), there were little opportunities for leisure and entertainment. Therefore, an industry

In terms of Africa as a whole, the industry is still at its infancy but has recently seen an explosion of opportunity. There’s the launch of Africa Game Developers Association, which is a community that boasts members from over 18 African countries. Commenting at an interview with The Fintech Times, Douglas Ogeto, co-founder and CEO of Nairobi, Kenya-based Ludiqueworks says: “Leading to the growth of the industry is access to smartphones as well as fair pricing on data and access to infrastructure (servers) for the esports space. Several global publishers are investing their infrastructure on the continent giving fair play to local players who not only play competitively against fellow players in the region but the world over.”224

Several global publishers are investing their infrastructure on the continent giving fair play to local players who not only play competitively against fellow players in the region but the world over

Other challenges include the conversion of opportunity to commercialisation. The region possesses strong talent but the true exploitation of gametech remains to be one that MEA as a whole can foster. With regards to Africa, another challenge is lacking a central storefront that prioritises and appreciates the perspective of both African creators and players. In addition, the volatility in local currency valuation can also make it difficult for players when trying to find value for money with regards to the global gametech market. Nevertheless, the success of Africa’s early-stage gametech ecosystem is noted, with growing local digital retail outlets such as Bonako

American Zynga in June 2020.227 Turkey’s gaming sector overall has been a shining beacon, where not only for the two unicorns mentioned but also in terms of its revenues and contributions to the community. For the former, in 2020, the gaming industry in Turkey save revenues reach almost $900million ($880million). Also, last year, Turkish-developed mobile games accounted for 20 per cent of the top 100 downloaded titles in America.228

The global growth of esports globally can also be seen in the MEA region. For example, with regards to prize money, twelve countries from MENA were in the top 100 earning countries. Jordan was the highest MENA country (ranked number 23 with total earnings of over $6million). The others in the top 100 are Lebanon (27th), Saudi Arabia (46), the United Arab Emirates (66), Morocco (79), Iraq (82), Bahrain (83), Tunisia (84), Kuwait (85), Algeria (86), Egypt (87) and Palestine (98). The list overall had the United States, China and South Korea ranking as the top three.229

Despite Covid-19, esports globally accelerated its importance, as many global sports events either were cancelled, postponed and/or modified to keep players safe and promote social distancing. For example, esports did carry on in the MEA region with Saudi Arabia setting up a new charity esports event to raise money to fight the coronavirus pandemic with a $10million prize fund. Gamers during the seven-week long mega-series had a chance to compete for their chance to decide where the prize money goes in the tournament. The Gamers Without Borders by Saudi took place between 24 April and 7 June in 2020.230

It was also publicised last year that Saudi Arabia will launch a new business training programme to help further grow and boost the e-gaming sector. Called ‘The Game Changers initiative’ and led by the Saudi Arabian Ministry of Communications and Information Technology, the programme will offer apprenticeship training to participants as well as aiding them in finding jobs in the sector and establishing startups.

This year, Shorooq Partners, a UAE-based early-stage venture capital firm that invests in innovative startups in the Middle East, North Africa and Pakistan (MENAP) region, launched SHFT Build, a programme focused on supporting sectors that are driving the future economy; its 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. They opened applications for MENAP-based game studios, game developers, distribution platforms, developers of game engines, and streaming platforms.231

In Israel, the Startup Nation, despite its success as a tech hub, is still catching up in the sector. However, in its short time in the sector from the early 2000s, according to a report from Deloitte, has seen global successes in the industry such as with Playtica and Plarium.225, 226

Turkey has made headlines recently and contributed massively to the MEA gametech sector, specifically by producing unicorns as mentioned earlier in Chapter One. They were Dream Games and also Peak, which was the country’s first unicorn after being acquired by

To add, the hot topic of the metaverse can present opportunities not just for gametech, which many who follow the space seem to agree it can see large uptake in adopters, but in particular for a region like MEA, which has in parts like Saudi Arabia a large number of users and in Turkey which has been not only using but contributing to its development.232

Despite the overall infancy of gametech in comparison to other more advanced gametech economies of the USA and in parts of Asia, MEA presents an opportunity that can see a thriving ecosystem in gametech. Fintech and gametech will continue, particularly now in our digital world (both prior and further accelerated by Covid-19), to play an important role even in our leisure time.233

Games Arena and Masseka Game Studio. Companies such as Ludiqueworks highlighted earlier are showing the aspirations of the African continent in this space.

3. WEALTHTECH AND INVESTING

Traditionally, wealth managers provide a range of professional financial services, from investment advice to general financial planning, for its mostly wealthy but also middle/upper middle class clientele, thereby guiding clients seeking to manage their finances and portfolios. Here comes fintech, which has made this process digital such as with being empowered by the likes of robo-advisory and wider AI and machine learning. Its disruption has made it more accessible and not exclusively mainly one for a few.234

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 in this fintech sub sector has been noticeable, with global wealthtech funding setting a new record last year after $13.6billion was raised during the first half of the year.235

Enter the Middle East and Africa – with the former, which is home to some of the world’s wealthy people, as well as in Africa in the upper tier – coupled with MEA’s wider middle and upper middle class, wealth management has been historically traditional via face to face.

Just by zooming in on the ultra wealthy, in the Middle East, it is expected to be home to at least 18,000 multimillionaires whom each are worth at least $10million.236 The UAE, home to flashy Dubai and Abu Dhabi, is home to at least 92,000 millionaires whom each are worth at least $1million, where private wealth is estimated at shy of $1trillion (966billion).237

Rank City/Country Total Wealth Held

1st Dubai, UAE $530billion

2nd Tel Aviv, Israel $312billion

3rd Johannesburg, South Africa $235billion

4th Istanbul, Turkey $180billion

5th Cape Town, South Africa $130billion

Sources: The Fintech Times, The National and Knight Frank

Despite much of the world’s attention focuses on the poor of Africa, the continent has a lot of rich people as well. The research firm New World Wealth, in collaboration with Henley & Partners, published a report on wealth in Africa for this year, highlighting those 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 dollars followed by the Egyptians with $307billion and the Nigerians with $228billion. Therefore, these Africans with money would be needing wealth management.238

By also adding in the masses, starting with the upper middle class and filtering down, MEA, home to a lot of ultra-wealthy and more most upper and middle classes, presents a unique opportunity for wealth management. Therefore, its disruption via technology presents a new interface that is still relatively new for many to adapt to.

Financial institutions have had to embrace it. For instance, last April, Commercial Bank of Dubai (CBD) launched CBD Investr, which is a mobile application that uses smart algorithms that actively manage investment portfolios. This was possible through a partnership with InvestSuite, a Belgium-based wealthtech provider to launch this.239 In addition, the Middle East have seen wealthtechs prop up like Finamaze, Sarwa and StashAway, which have all brought

the idea of wealth management to be more accessible to the masses, in particularly the more tech-savvy people.

In Africa, a similar trend can be felt as with its Middle Eastern counterparts – that wealth management was mainly for the wealthy, and it was more traditional in its interaction aka 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.240 There is also Kenya’s Ndovu, which aims to have over 220,00 users in three years’ time via expansion. With its current base of 170 users from last year, its assets under their management stands at over $3million.241 In Kenya, the aggregate value of wealth under management by different collective investment schemes stood at nearly $1billion (KSh 117 billion) in June last year, having grown from $493million (KSh56 billion) in September 2017, according to Kenya’s Capital Markets Authority (CMA).242

Another example is in Egypt with Thndr, which was established in 2019. The trading and investment platform, which highlighted that in Egypt less than one per cent of the population invested in stocks and wasn’t common practice among the population, tried to break barriers to that. In addition, in Egypt the average age of an investor is older (from 45 to 52 years old). Therefore, Thndr tried to make a use-friendly solution for anyone to use, which has seen over 100,000 registered accounts and 15,000 active users per week through their app.

Finally, there is Chaka from Nigeria. Founded in 2019, it aimed to get more Africans to gain access to global markets. This saw the company go live with a direct-to-consumer mode that resulted in it seeing more than 150,000 downloads of their app from last year.243

To note, other famous African fintechs like TymeBank and Access from South Africa and Kuda Bank from Nigeria are also classified from sources as wealthtech, thereby showing the growing popularity of the subsector in the continent. From last year, in terms of deals, wealthtech was actually the third largest sector in the African continent with 41 deals. Despite it declining from 2020 from 49 deals, this saw a decline across many parts of the world.244

Africa and the Middle East, nonetheless, with its historic ways of traditional wealth management services, presents another opportunity for development via wealthtech.

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 and the growth in this fintech sub sector has been noticeable

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

4. DIGITAL CURRENCIES AND CRYPTOCURRENCIES

What does the digital currency landscape and, in particular, cryptocurrencies, look like in MEA?

One of the biggest headlines in the MEA region was Nigeria and a central bank digital currency (CBDC), which in October last year became the first country in Africa to introduce a digital currency.245 It was Bahamas in the Caribbean that became the world’s first CBDC with the launch of its Sand Dollar in October 2020 while China become the world’s first major economy to pilot one in April 2020 with the digital yuan.246

Also, the Central African Republic in July launched the Sango Coin crypto asset project, which has set up a dispute with the regional central bank and further raising queries over how this will be used.247

Heading to the Middle East, according to Chainalysis, the top three largest digital currency markets are Turkey, Lebanon and the United Arab Emirates (UAE) – home to commercial hubs of Dubai and Abu Dhabi.248 Other noteworthy news item was in terms of digital currencies, there was Project Aber with its findings published in 2020. The project was between the Saudi Central Bank (SAMA) and the Central Bank of the UAE (CBUAE) to see the viability of a single dual-issued digital currency.249

In terms of wider economic development and foreign direct investment (FDI), Dubai, which has become an undisputed regional hub in MEA (and in some sectors such as transportation and logistics a global hub), expects to have 1,000 cryptocurrency businesses operational by this year and centres in Dubai notably the Dubai Multi Commodities Centre (DMCC) Crypto Centre is a thriving cryptocurrency ecosystem and a gateway to global trade in blockchain technologies, according to its website.250 The most spotlighted digital

currency though, as where the previous point is gravitating towards, by far has been ryptocurrencies in the global stage, including in MEA, which are digital currencies based on the blockchain.

IN FOCUS: CRYPTOCURRENCIES

MEA made headlines, in particular the African continent, with respect to cryptocurrencies. Following global headlines when El Salvador in Central America became the first country in the world to adopt Bitcoin as an official currency, the Central African Republic this past April announced it will adopt Bitcoin. It is the first in MEA and second now only to El Salvador.251 In terms of adoption, the Chainalysis 2021 Geography of Cryptocurrency Report 252 had a top 10 Global Crypto Adoption Index, whereby three MEA countries made that 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).

Comparing to the 2020 top 10 list, which had three MEA countries (Kenya at fifth place, South Africa in seventh place and Nigeria in eighth place were Ukraine at first place, Russia at second place, Venezuela at third, China at fourth place, the USA at sixth, Colombia at ninth place and Vietnam at 10th place (note China since has banned cryptocurrencies and others who ranked higher had different changes in their political and economy environment that has reflected in the current top 10 list).253

In terms of the Middle East, Afghanistan took the rank for the highest Middle Eastern country on the Index in 20th place, which was followed by Turkey at 26th. Turkey also had the highest transaction volume in the Middle East at over $130billion.254

Even in more established and developed parts of MEA this has grown. For instance, New York-based cryptocurrency exchange Gemini released a report and included the UAE and Israel, whereby, 28 per cent of people in Israel and 35 per cent of people in the UAE own cryptocurrencies. With the ladder, Bybit and Crypto.com announced they will open offices soon in Dubai. In the former, Israel’s Bank Leumi became the first traditional bank in the county that will permit customers to trade cryptocurrencies. Other headlines in Israel included Canada’ Wellfield Technologies bought out Israeli Coinmama.255

■ Financially excluded – For many, especially in Africa where over half the population is still financially excluded,257 cryptocurrencies has helped people access services they would have not had the chance to – like 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 to purchase supplies without any cash.258 Also, this year unicorn insurtech Lemonade announced it is working on a project to offer African farmers crop insurance via cryptocurrencies.259 According to Lemonade CEO Daniel Schreiber, “Ninety- seven per cent of farmers in sub-Saharan Africa don’t have access to insurance… The people who need it the most have access to it the least.”260

■ Necessity vs. Leisure – Unlike generally those in the West who have been using cryptocurrencies mainly as an added value or for leisure trading, many in MEA have been using it out of pure necessity. Think of the business owner in Lebanon who is having to use cryptocurrencies to purchase supplies from abroad because the Lebanese Lira has devalued significantly to the Afghani in Kabul having to receive remittances in crypto because of the collapse of the banking sector – similar stories can be felt across the rest of the developing world and/or regions with current political and/or economic difficulty.

Like much of the rest of the world – where various countries have been considering how to regulate the industry or in other cases outright ban them – the MEA region is also facing this question. Should it be the likes of say India who this year announced it would tax cryptocurrencies? Should it be the likes of Nigeria where it is restricted? Or should it be those that outright ban them? At present from when this was written, nine countries currently ban them (seven are in MEA – Egypt, Qatar, Iraq, Oman, Algeria, Tunisia and Morocco – the other two countries are China and Bangladesh).261

In terms of value, in the 2021 Chainalysis report Africa, despite only having received $105.6billion worth of cryptocurrency between July 2020 and June 2021 and having the world’s smallest share, it did grow over 1,200 per cent from the previous year by value. The Middle East has the second- smallest cryptocurrency market (6.6 per cent of global activity), received $271.7billion worth of cryptocurrency between July 2020 and June 2021. Despite the Middle East being low it was a 1,500 per cent increase from the previous year.256 Why are cryptocurrencies popular in MEA as a whole?

■ Devaluation of currency hedging in times of uncertainty

– Like much of the rest of the developing world such as Latin America, home to one of the saddest downtowns in economic and political stability aka Venezuela, it isn’t a surprise to see countries that have undergone difficult or in the Middle East with Afghanistan, where the likes of cryptocurrency (Bitcoin, Ethereum – to name a few) can provide savings protection and those are able to protect their assets from a declining, or in the cases of the two countries mentioned a financial collapse, some home of stability – even though cryptocurrencies is also volatile.

Time will tell but, similar to what many across the world are going to do most likely, is an in-between approach. Instead of going completely laissez faire in one spectrum and the other end ban it, there will most likely be some in-between, where governments potentially (such as in the case of India) announce that they will plan to tax crypto. There potentially could be ways where they could be regulations that ultimately would protect the consumer. However, this could and is proving challenging with the blockchain, decentralisation nature and anonymity as a result of crypto generally.

An example was this year with news that The South African Reserve Bank is set to introduce regulations next year that will see cryptocurrencies classed and treated as financial assets to balance investor protection and innovation.262

Despite its challenges in recent memory, cryptocurrencies and wider digital currencies have made its impact in the world and this can be felt in MEA. From farmers in Kenya who are able to pay for goods in cryptocurrencies to a wider digital transformation of a country’s currency – it has brought plenty of attention in its own right that digital currencies and cryptocurrencies in particular has been the talk of the town in the wider fintech and digital ecosystem in recent memory. Despite, when looking at percentages, cryptocurrencies when looking at numbers in detail show how it has impacted and offered hope for many in MEA, in particular with those who use it out of necessity.263

Despite its challenges in recent memory, cryptocurrencies and wider digital currencies have made its impact in the world and this can be felt in MEA. From farmers in Kenya who are able to pay for goods in cryptocurrencies to a wider digital transformation of a country’s currency

5. OPEN AND EMBEDDED FINANCE

Headliners globally with open banking, which the UK arguably led, provoked this topic realistically but also need and realisation of its importance. Open finance merely is the next step of open banking as it encompasses all the offerings of the financial services sector rather than just simply banking; nonetheless both will be used interchangeably when appropriate.

MEA, like much of the world, is in an early stage in terms of at least adopting, entertaining with the idea or even grasping the principles and benefits of open banking let alone open finance. To recap, open banking works when financial institutions such as banks allow for customer data to be shared through trusted third-party providers via open banking APIs. Fintechs have been playing a large part in the growth of open banking and their partnerships with financial institutions – or via direct. With open finance, as mentioned, it goes beyond banks and doing the same principle but across the entire financial services offerings.

Key areas in the world where open banking and open finance as a whole have been growing, to note, have been the European Union (EU), and specifically in the UK – which at the time of the growth of open banking was part of the EU prior to Brexit. Australia is also noted as another example of open banking seeing growth. The UK, the EU and Australia in large part have seen their open banking ecosystems grow as much of it was legislation driven.

Saying that, the world, at least with open APIs, even back in 2019 at least 87 per cent of countries had some form of open APIs. Via LearnBonds, it was estimated that over 10,000 financial institutions globally had open banking implementations.264 And this can be felt across the MEA region – or at least the idea of entertaining open banking and wider open finance. The idea of open finance will be led accordingly by the following:

Legislation–led: This can be with what essentially what happened in Europe, such as in the UK with open banking. In fact, much of the foundations of what the world knows about open banking can be stemmed from 2013, which was part of the European Commission’s revised Payment Services Directive 2 (PSD2) proposal, in which it recommended banks to permit third parties to access account data and initiate payments.265

An example of how open banking has grown has been in the United Kingdom. Home to the global financial hub of London, the UK, as part of the EU at the time, is part of the PSD2. It essentially forced banks to adopt open banking they are approved by the Financial Conduct Authority (FCA) of the UK. This of course, by 2018, the UK had the nine largest banks (which included HSBC, Santander, Barclays) comply with open banking via creating open APIs for third- parties. Coupled with the Open Banking Implementation Entity (OBIE) expanding and publishing the Open Banking Standard, it helps those in the UK help account providers meet API requirements.266 As shown in the UK, legislation-led open banking will involve some type of study/research that will ultimately conclude with a strategy. In the advanced stage of the UK, this has led to its implementation and the various mechanisms needed to achieve open banking.

Nonetheless, open banking has also begun to take root in the MEA region – such as with Saudi Arabia and Bahrain with respect to

legislation-led. With the ladder, Bahrain has been an early adopter of open banking compared to the rest of the region – the first in the region to pass open banking regulations and National Bank of Bahrain led the way in launching open banking services and open banking platform company, Tarabut Gateway.

The Saudi Central Bank (SAMA) has also announced its open banking policy to articulate the main objectives of implementing open banking in the Kingdom and its positive effects on the financial sector. The issuance of this policy builds on the efforts of SAMA in diligently pursuing the strategic objectives of the financial sector development programme, underscoring its commitment to promoting innovation, and trust within the sector, re-enforcing competition and raising efficiency.267 They aim to launch sometime this year.268

In Kenya, the Central Bank of Kenya (CBK), prioritised open infrastructure as highlighted in its 2021-2025 strategy. It states, “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. These standards will include API specifications for identification, verification, and authentication; customer account information/data access; transaction initiation; and formats and coding languages for APIs. Due to the risk associated with opening up data from financial institutions to third-parties, CBK will define clear risk management frameworks and standards, including providing clarity on liability and consumer protection.”269 As highlighted in the article by DLA Piper, Kenya is also acknowledging via its findings the need to develop open and secure APIs at least. Israel last year has also adopted open banking regulations last year.270

Industry-led or hybrid: In other parts of the world, such as in the United States and Singapore (which generally have been more laissez-faire and had the industry lead in this) or in India which has been more of a hybrid approach, areas such as in MEA with open banking can either have it industry-led or a hybrid of both legislation and industry.

It is clear in MEA that the industry has been paying attention to the topic – more so than ever and that the pandemic further accelerated it. This is demonstrated, for instance, in the number of events in the region – whether it be purely on open banking – or in wider financial services and/or fintech events where open banking often is becoming an integrated part in various conference agendas.

With regards to mobile and Africa, Mastercard highlighted a story on its website with Mono, whereby in 2020 it launched an open banking platform in which consumers can securely share access to their financial data – their account balance, transaction history and account owner identity – with third parties to access more personalised financial services. This allows someone to do the same with their telecom data. This can help lenders better understand the user’s financial history and whether to extend credit to them. Mono is building the APIs that aggregate that data and help people benefit from it.271

To mention, the number of South African banks offering open banking services has since grown to six. Meanwhile, South African and Nigerian start-ups TrueID and Okra, respectively, mentioned their recent funding rounds to develop open banking infrastructure.272

Whether it be legislation, industry or a hybrid, there still needs much more to be done with open banking globally, which also includes more advanced ecosystems like the UK. For instance, with the benefits to customers, they need to be aware of open banking in simplified terms and its benefits. For instance, even in the UK, according to ING research, only 23 per cent of British consumers are happy for their financial information to be shared via an open banking model. After all, digital transformation as a whole presents its own issues and doubts – in particular with big data and personal information and challenges such as cybersecurity.

Saying that, since Q1 2020, Yapily has seen the number of open banking payments increase by 365 per cent, on average, every quarter. This exponential growth in payments made through open banking APIs is tangible proof from the market that does support research and predicts over two-thirds (64 per cent) of UK adults will be adopters by next year.273 The UK’s consumer adoption has been higher and has also played a success so far with open banking.

With regards to the benefits for financial institutions, looking at the UK again, they appear to have a more positive attitude towards open banking. There, nearly 70 per cent agree that open banking is viewed as an opportunity in their organisation, where 70 per cent have a clear strategy to realise the potential of open banking.274 Regions such as MEA will need to have these types of support from the industry such as in the UK for it to work. To add, it will be as well up to partnerships – which increasingly globally as a whole have been with the likes of fintechs and financial institutions, or even the ladder creating their own solutions – that can help boost and further justify the benefits.

Therefore, for solutions such as with fintechs the benefits of their solutions needs to be clearer as well for financial institutions to promote collaboration and partnerships.

Open banking may appear to be complicated but it can at least be developed – whether in the Middle East and Africa or beyond – through at least partnerships and collaboration between the ecosystem of governments, the private sector (financial services institutions and innovation companies such as fintechs) and the consumer. It therefore can be accelerated – but will require a unique version of its strategy and implementation that can work across the region.275 Nevertheless, it has been a good step to then address the other topic in this subsection of embedded finance.

With regards to embedded finance, which of course is the integration of financial services or tool within the non-financial ecosystem, this has potentially both globally and in MEA. The popularity globally of 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 consequently is proving to show potential as well in MEA.

Estimates abound but in MEA the market has grown by 45.3 per cent and this year looks to be worth over $10billion ($10.359billion).276 Globally, according to Finastra’s report called Banking as a Service: Outlook 2022 | Paving the way for Embedded Finance, BaaS was estimated to represent a $7trillion opportunity. In addition, 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.277

According to Finastra, 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, whereby 60 to 70 per cent of distributors also are looking to increase their spending on financial partnerships such as BaaS. In addition, in the Europe, Middle East and Africa (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.278

In practice, globally this looks for instance with examples from Tesla, which has embedded insurance to all its customers when buying their Teslas by helping them drive away with their car without any added hassles or paperwork. Similarly, Uber offers embed payments, as we know where we have our user’s bank details so we don’t need to input it every time we book an Uber.279 In addition, Apply Pay Later was announced with its rollout this year, with the tech giant entering the BNPL scene.280

In the MEA region, examples include the likes of Emirates Airlines offering a ‘fly now, pay down the line’ which in partnership with Emirates NBD gives people three month of interest-free instalments or in Saudi Arabia with Arab National Bank providing BaaS services to its customers in partnership with Red Hat, an American-based open-source solutions provider.281 In Africa, it has seen unicorn Flutterwave from Nigeria launching a fintech-as-a- service (FaaS) solution, which allows individual businesses to open accounts, do KYC verification, receive payment from, and manage their customers’ accounts.282

Open banking may appear to be complicated but it can at least be developed – whether in the Middle East and Africa or beyond – through at least partnerships and collaboration between the ecosystem of governments, the private sector companies and the consumer

Globally, this probably is one, if not the biggest impacts fintech is having on people where many just take the convenience of insurance from Tesla or Uber payments for granted. And similarly, as in much of the world, and fintech in general, many are approach embedded finance strongly via partnerships as highlighted earlier. On a final note, globally the value of the embedded finance market is expected to exceed $7trillion in the next 10 years according to Oracle.283

6. LENDING

Lending presents a opportunity for MEA as well, as highlighted previously that most do not have access to traditional financial services and the majority, besides even having that, don’t even have access to the likes of credit cards and let alone mortgages. For SMEs similar rules apply in particular with loans on setting up or expanding a business.

In addition, as highlighted earlier, much of the region is still building its wider fintech ecosystem, which include the likes of

regulations and even basic things we take for granted like credit bureaus. Also, to give an example of the UAE, data provided by Khalifa Fund shows that approximately 50-70 per cent of the SME for funding are rejected by conventional banks, despite them contributing 60 per cent of the UAE’s GDP. Loans to SMEs account for just four per cent of the outstanding bank credit in the UAE, which is below the MENA average of 9.3 per cent.284

As shown earlier and more in detail in chapter three with the breakdown of key fintech hubs across MEA, one will see that lending plays a strong component at present in MEA fintech hubs. In many countries it ranks at least top three (alongside payments) where much of the fintechs in MEA are or its adoption.

For instance, peer to peer (P2P) lending, globally took off during the 2008 Global Financial Crisis, as traditional institutions clamped down in lending. While China and the USA made up 95 per cent of the market in 2020, much of the region including MENA also brought P2P in the spotlight.285

The IFC estimates that the SME lending gap in MENA is estimated at $210 to $240billion (of which formal micro small and medium enterprises (MSME) finance gap is estimated at $160-180billion).286

It is credited that the MENA P2P lending craze started in Jordan in 2013 with a company called Iiwwa and Beehive in the UAE. Despite the overall lack of unified regulation of this across MEA as a whole, innovative approaches via partnerships have been done by these examples. For instance, the ladder started partnering with banks where an SME lending white-label solution was implemented and grew its institutional lenders base. The former did something similar with institutional investors like local banks in Jordan and global debt institutions, in addition to offering a credit analysis engine, credit-as-a-service to banks.287

Saudi Arabia appears to be a growing hub with P2P, as its regulatory and environment allows for P2P to thrive better than most in MEA; the country as highlighted in chapter three shows there are at least a dozen P2P lenders – including Raqamyah, Lendo – to name a few.288

With Africa, at one point it was Kenya and South Africa that dominated the market with both combined controlling 90 per cent of the P2P market in the continent. Interestingly, at one point also 90 per cent of online alternative lending had originated from platforms that were headquartered outside of the continent.289

In terms of crowdfunding, in 2020 it was estimated that $26.9million in transactions were done in crowdfunding in Africa. Furthermore, crowdfunding in Africa is projected to reach 11,800 campaigns by 2024.290 In the Middle East, similar with a lack of regulations, there have been players like Eureeca.com for equity investor or Aflamnah.com and Zoomaal.com for creative projects.291

For instance, in the UAE government website as of July 2022, with respect to crowdfunding, “In the UAE, fundraising activities for charities and social causes are regulated and done through statebased registered channels. However, fundraising for loans and investments, or debt-based funding is a new concept which is currently applied on a narrow basis and yet to be regulated and introduced at a wider level.”292

Saying that, in Israel, according to the OECD, the country regulates P2P as of 2017, and, with respect to crowdfunding, the Israel Securities Authority in March 2017 completed the enactment of mass

financing regulations for research and development companies and SMEs. Later that year, the Finance Committee of the Knesset approved the Securities Authority to mass financing regulations.293

In Turkey, its first legislation on crowdfunding came into force on 28 November 2017, with an additional article in the Capital Markets Law requiring the approval of the Capital Markets Board of Turkey (CMB) for crowdfunding platforms.294

Back to Africa, as much of fintech has been around mobile phones, many solutions have been coming from that with respect to lending. They even reference it as mobile lending. And as highlighted, much of this penetration in lending with mobiles is coming from East Africa, in particular Kenya.

Quite a few of the solutions in the African continent, as mentioned earlier, have become superapps or megasolutions, which has expanded their offering besides the likes of paytech. For instance, M-Pesa as mentioned earlier, also has lending via their KCB M-Pesa Loan. This was launched in 2015 with Safaricom and KCB, a commercial bank in Kenya, joining forces via this partnership.295

Others like MTN also offer something similar. This year, MTN, which is the major player in neighbouring Uganda in terms of its market share dominance there by having over half of mobile users in the country, MTN Mobile Money Uganda Limited and Jumo, a technology company building next-generation financial services for emerging markets, have launched MoSente, a new service that allows MTN customers to access credit facilities. The company

has been operating something similar since 2016 called MoKash. The company last year partnered with Absa Bank and Tigo in neighbouring Tanzania to help boost its availability of existing short-term credit product Tigo Nivushe.296

Beyond just mobile lending, there are of course other fintechs providing lending, such as in South Africa with companies like Cape Town-based Lulalend, an online lending company that says it provides fast and easy working capital for small businesses.297

Nonetheless, it is worth mentioning microlending and wider microfinance and its potential in the MEA region, in particular in much of Africa and the poorer parts in the Middle East. There remains the challenges of not only the technical and integration challenges of course but also the financial literacy needed to educate the millions across MEA on debt and borrowing in general.

7. REGTECH

Not just the current state of fintech but in particular regtech saw its emergence following the 2008 Global Financial Crisis, as the financial services industry became stricter with its lending and push away from its careless past with the US subprime mortgage crisis that fuelled that disaster. As there was a dramatic increase in regulation in the financial services industry, this resulted in a rise in spending on compliance. By using technology to stay compliant came the birth of regulatory technology – or regtech.

Globally, coming from its recent birth, the industry alone is expected to be worth $12.3billion by next year in 2023 and $19.5billion by 2026.298 As any other financial hub – from London to Singapore – MEA financial hubs such as Dubai and Mauritius have also faced its share in recent memory of compliance and anti-money laundering (AML) challenges in the past and present.299, 300

Nonetheless, regtech comes to the rescue. Though new to the scene and still very much infant in the MEA region (for instance in 2019 only four per cent of fintech VC funding in MENA went to regtech startups301) there have been potential for it and its need.

For example, in 2018, there was a 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 block-based e-KYC to help financial institutions with a single location where customer identification and verification could be performed once for a customer.302

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.303

In Israel, which is a leader in cybersecurity as highlighted in the previous edition of this report, coupled with its tech and, as what chapter three will show in fintech, has a strong position to be a leader in regtech. It already is, when for instance at looking at investment deals. In 2020, six out of the top 10 regtech deals outside of North America and Europe were to Israeli regtechs – aqua, Namogoo, anyvision, Cheq, Ironscales, and Cymulate.304

In Africa, similar to the Middle East and the world, regtech is still an infant concept but has its potential as well. Many countries in Africa are/have in the process of adopting laws on data protection, such as in South Africa with its Protech of Personal Information Act.

It has been highlighted in the case of Nigeria for instance, as it has taken a collaborative and consultive approach between the public and private sector that has given the country progressive banking policies and a growing open banking regime, allowing for banks, fintechs and third parties like telecoms to use standard API to share data.305

Across much of Africa and the Middle East though, as technology is rapidly changing the regulations aspect, and regtech consequently, has potential but much more is needed. One thing to point – as highlighted earlier – economic and political integration such as with the AfCFTA can present a unique opportunity that potentially can standardise legislation but this will depend on the future with the level of economic integration that will happen in Africa as well as in the Middle with the GCC.

8. INSURTECH

As highlighted in Chapter One, the MEA region overall is uninsured and the reach to insure those who needed it, coupled with the overall digital transformation of insurance, has presented a unique opportunities for insurance technology – or insurtech to grow. The global insurtech market is expected to reach at least $10billion by 2025306 and MEA can play a strong part of that.

As what Chapter Three will show across key fintech hubs in MEA, many of them in terms of their subsectors have insurance play a key part in their ecosystem. A big player has been Israel, which alone has at least 100 insurtechs as highlighted in the previous edition of this report – including the likes of Next Insurance or Lemonade or Hippo. Israel as a whole has the largest insurance market in the Middle East, where in 2020 both life and non-life premiums amounted to over $9.2billion (32.01 ILS).307

In Africa, as only three per cent are insured (the lowest in the world), much of the innovation is accessing and distributing insurance to the masses.308 After all, even with that small figure, as highlighted in Chapter One, 80 per cent of premiums are in South Africa alone.

A sizeable proportion of insurtech startups in Africa are in the microinsurance & digital brokerage sector. Many that are also growing include in the 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.309

In MENA including Turkey minus Israel, like Africa (excluding South Africa), insurance penetration as highlighted earlier is low too. From a report by insurance firm Zurich, MENA doesn’t follow the trend of developed and developing economies – whereby generally the richer they are the higher the uptake in insurance. The study separated the rich MENA countries and the poor ones and their uptake was almost the same, where their insurance penetration or premium volume back in 2011 was below two per cent for both non-life and life insurance –compare that with the global average of around seven per cent.310 There is potential. For instance, in Dubai since 2014, health or medical insurance has been mandatory by law.311 Also, this year in Sub-Saharan Africa, Nigeria passed a health insurance law called the National Health Insurance Authority Bill 2022, which aims to ensure it covers the 83 million poor Nigerians who cannot afford to pay for premiums. This is a massive development, as eight in 10 Nigerians do not have access to health insurance.312

Like the banks, insurance companies generally look positive with respect to the rise of insurtech. For instance, in the UAE, two-thirds of UAE-based insurers are keen to collaborate with insurtechs –according to a report by Capgemini. The same report highlighted that 85 per cent of them want to partner with technology providers.313 Some of those examples last year included the following:

Examples of partnerships are slowly abounding but include the following. In the Middle East they are:

■ Insurance, banks and payments in the UAE: Dubai National Insurance & Reinsurance has partnered with Magnati, which is a subsidiary of First Abu Dhabi Bank to support customers with a payment gateway. The product is offered in collaboration with UAE digital wallet NIR customers now have payment channels including payit, QR code payment, Samsung Pay, Apple Pay and Google Pay.

■ Amazon meets insurance in MENA – Amazon Payment Services (APS), the MENA-based payment processing services provider, developed a partnership with Swiss Zurich International Life Limited to offer digital payments for its customers in the Middle East through the utilisation of Zurich’s digital customer onboarding platform ZurichPro.

Meantime, insurance and wider fintech partnerships in Africa include:

■ Telecommunications and fintech – The largest mobile phone network provider in South Africa, MTN, forged a partnership with UK-based fintech Sanlam to offer the telco’s subscribers low-cost insurance products. To note, MTN was formerly branded as M-Cell, and operates across Africa and Asia with its headquarters in Johannesburg.

■ More telco and fintech – AAR Insurance partnered with telco Safaricom to roll out new technology infrastructure based on AWS as part of its goal to be a full digital insurance company.314

Insurtech could also bring a strong role in bringing financial literacy to much of MEA, whereby much across the region are not aware of the benefits, procedures, coverages and terms and conditions of insurance – from car to health to life insurance.

c. ENABLERS OF FINTECH

Not different from the rest of the world, the enablers of fintech in MEA are also not only necessary but being used to empower and run the sector – the likes of artificial intelligence (AI) & machine learning to blockchain to application programming interface (API) to mobile devices to big data & cloud to cybersecurity.

A key difference, as what this report has been highlighting, is generally much of MEA is still infant with regards to much of these enablers but is playing catchup.

five per cent towards the country’s GDP by 2025 and also having 50,000 people working in the sector.315

By evaluating the region, much of this gap analysis can be seen with the implementation of their national strategies as well as catering to a growing demand market of consumers looking for more digital experiences. For instance, an example of implementation has been the growth and increase of data centres being build in the region such as in the GCC, notably in Saudi Arabia for example.

In 2020, the UAE saw a large growth in the data centre market, with the large tech giants such as Huawei, Amazon, Google, Microsoft, telecoms, banks and other players growing their demand for this and data centre developers like Batelco, Equinix, Amazon Web Service (AWS) and Khazna catering to them.316

As highlighted earlier, much of the data from MEA such as in the African continent is being stored in non-MEA regions; therefore this building of the infrastructure makes the region more reliable for itself (in the spirit similarly of the AfCFTA). This has seen countries like Uganda have their own in its capital and largest city of Kampala.317

In the continent, the African data centre market looks to reach $3billion by 2025 and estimated to have a CAGR of over 12 per cent. In terms of market, at present, it is South Africa holding the largest share of data centres, whereby its digital economy is contributing six per cent to the total GDP. The country also is ranked 25th globally based on data centre density. Nigeria also, compared to much of MEA, has a relatively established market for data centres, with its top service providers including Netcom, MainONe and Console Connect.318

GAP ANALYSIS

As highlighted in chapter one, many economies in MEA have addressed its gaps via their national economic development strategies. Through digital transformation, which plays a big part in many of the MEA economies for its future growth, the region has understood not only what gaps it has but how they are going to implement this.

For instance, as highlighted in the previous version of this report, in Saudi Arabia, linking down from Saudi Vision 2030, they have a national strategy just for AI called the National Strategy for Data & AI (NSDAI), whereby in 2030 they aim to be a global leader in the big data and AI space and hopes that it will contribute at least 12 per cent to its GDP by then. Also, the UAE has its Artificial Intelligence Strategy 2031 – a commitment to ‘smart’, advocating 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 is aiming to have 7.7 per cent of its GDP, or almost $43billion, derived through AI by 2030.

Similarly, last year saw Turkey launch its own AI strategy roadmap, whereby the country is aiming to have the AI ecosystem contribute

In 2020, the UAE saw a large growth in the data centre market, with the large tech giants such as Huawei, Amazon, Google, Microsoft, telecoms, banks and other players

demand for this and data centre developers catering to them

As a whole, a report by Google and the International Finance Corporation (IFC) estimated that Africa’s digital economy has the potential to contribute $180 billion to the broader economy by 2025.319 And this doesn’t factor some of the latest headlines globally that potentially can have its impact in MEA – which includes the likes of the metaverse and web 3.0. Speaking of the metaverse, Dubai made headlines this July where it announced its metaverse strategy, which was launched by HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crowne Prince of Dubai. The city aims to be the world’s top 10 metaverse economies and a global hub of it as well, also attracting more than 1,000 companies in the fields of blockchain and metaverse, as well as supporting more than 40,000 virtual jobs by 2030.320

FOCUS ON STRENGTHS

In terms of blockchain, there have been various efforts in the region due to its growing demand and market influences (i.e. as highlighted

growing their

earlier with MEA holding some of the highest activities in the world with respect to cryptocurrencies) and also government support to boost its digitalisation efforts.

In particular the efforts of blockchain can be felt in Dubai, whereby the Emirate launched its Dubai Blockchain Strategy in 2016, with the vision of HH Shikh Mohammed bin Rashid al Maktoum, the ruler of Dubai, envisioning “Dubai will be the first city powered by Blockchain by 2020.”321 It was a joint effort between the Digital Dubai Office and the Dubai Future Foundation. In 2018 Dubai also launched the UAE’s first government-endorsed blockchain platform.322

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 similarly has been investing a lot in its future digital infrastructure, was the second highest MEA country at 18th place globally.323, 324

As highlighted in the previous edition of this report, in terms of cybersecurity Israel has led the way globally. The country amassed $8.84 billion in funding during 2021 which tripled what it raised in 2020 with $2.75 billion. Impressive enough, out of the global cyber funding, 40 per cent went to Israeli startups and companies.325 It is estimated that are at least 450 cybersecurity companies operating in Israel.

The country has had an industry since the 1980s, where companies began developing anti-virus software and information security. They have been at the forefront for much of wider tech innovations and particularly in cyber, such as the Israeli Ministry of Finance’s Fintech-Cyber Innovation Lab Programme, the first initiative in the world that leverages governmental assets and data to promote fintech and cyber startups in an open innovation platform. It is said that there are three major clusters of cybersecurity – San Francisco, Washington DC and Israel.326

Finally, in terms of robo advisory, it is predicted that by next year will be worth shy of $4billion (3.80) with a CAGR of 55.94 per cent. The UAE and Saudi Arabia are the region’s leading robo- advisory drivers.327 Globally, the robo advisory market last year was estimated

to be worth at least $5.6billion with projection that by 2027 it can be worth over $27billion.328 As highlighted earlier in the wealth management subsection, robo-advisory has been playing its part there as it does globally but also in MEA.

In terms of fintech directly, there have been quite a few noticeable initiatives throughout MEA. For instance, the Dubai International Financial Centre (DIFC), being a major financial hub as highlighted earlier, this year launched a AI and coding licence, in cooperation

with the UAE Artificial Intelligence Office, whereby companies with that licence can work at DIFC Innovation Hub.329

In terms of Israel and its leading position in cybersecurity, last year, Israel launched an innovation laboratory that will deal with cyber defence for fintech technologies such as digital banking. The new FinSec lab was established in the southern city of Beer Sheva by the Israel National Cyber Directorate (INCD, the Israel Innovation Authority and the Israeli Finance Ministry, in collaboration with Mastercard and the Italian energy transformation company Enel-X.330

Paytech, money transfer & remittances

Wealthtech & investing Gametech Digital & neobanks

Insurtech Regtech Lending Open & embedded finance Digital currencies (i.e. cryptocurrencies)

KEY FINTECH ENABLERS

Mobile devices Big data & cloud Cybersecurity Blockchain Application programming interface (API)

Artificial intelligence (AI) & machine learning

Source: Richie Santosdiaz and The Fintech Times

iii.Wider fintech ecosystem

The graphic below shows key players in the wider fintech ecosystem generally. Pertaining to MEA this of course applies. To present a unique opportunity, this subsection will now spotlight a few from the region and their own direct or indirect roles in fintech.

Note, in Chapter Three of this report key public sector entities, catalysts and associations will also be mentioned in their respective countries.

SUMMARY

Fintech’s landscape in the Middle East and Africa is very vast and diverse. It is similar across the rest of the world in the subsectors but much of it is still mainly payments, money transfer or remittances and lending such as in Africa. The sector, which has been growing in terms of its VC funding, still has much to go with regards to the rest of the world. However, strong promises in the likes of growing unicorns the last few years remains promising. The following summarises Chapter Two.

■ Infant compared to the rest of the world in many ways – the combined fintech solutions or VC funding and other measurements still show MEA has a smaller chunk relative to its population compared with much of the rest of the world.

■ Leader in mobile money – East Africa in particular has been a leader with mobile money and has helped bring its popularity outside of the continent

■ Fintech concentration isn’t spread equally – In terms of number of fintechs, Israel, Turkey and the UAE have the bulk of fintechs. In addition, the big four in Africa have most of them as well. As highlighted in chapter one, much of this correlates with their advanced financial services ecosystems and tech ecoystems where a new disrupter, fintech, has been able to thrive and make base there.

■ It’s not all about payments anymore – payments play a strong role and will continue to grow but there are other contenders in other fintech subsectors such as lending, digital currencies and insurtech.

■ Super apps and traditional companies are fintechs – quite a few solutions in MEA have come from traditional companies not in the space and have ended up being fintechs and also fintechs that have gone beyond their main vertical and have offered other aspects of fintech subsectors and beyond.

The question now is – what are the key fintech hubs in MEA? Chapter Three will go deeper and highlight those key ones.

Source:: Richie Santosdiaz

AFRICA FINTECH NETWORK (AFN)

“Africa Fintech Network (AFN) is a platform that unites Africa fintech leaders, organisations and stakeholders to exchange information and ideas, promote and support creation of innovative technologies and deployment across and beyond Africa. The network also serves as a platform for advocacy and coordinated regulatory interactions.

As the umbrella body for fintechs in Africa, AFN has been set up to contribute to making Africa a leading global Innovation Hub. The Network continues to promote Africa as a preferred

investment destination thereby creating employment opportunities, contributes to fast-tracking access to basic financial services for all, and generating wealth among others. Some of the achievements of the network within the period of its establishment includes;

■ Membership growth from 11 countries upon establishment to currently 34 countries in Africa

■ Contributed to the draft Digital Transformation Strategy for Africa (2020 – 2030) document of the African Union Commission (AUC) and United Nations Economic Commission for Africa (UNECA) which is currently being used for the implementation of the Africa Continental Free Trade Area (AfCFTA)

■ Capacity building for fintechs and

BAHRAIN FINTECH BAY

Bahrain FinTech Bay is one of the leading fintech hubs in the MENA region. We incubate impactful and scalable fintech initiatives through innovation labs, acceleration programmes, curated activities, and educational opportunities. Bahrain is home to over 120 fintechs with over 80 incubated in Bahrain FinTech Bay since its inception. We've hosted over 300 events and workshops, launched five acceleration programmes with our founding partners, and three educational programmes focused on fintech and entrepreneurship in collaboration with leading global universities and educational institutions. Our platform is dedicated to furthering the development, interaction, and acceleration of the fintech ecosystem. We partner with governmental bodies, financial institutions, corporates, consultancy firms, universities, associations, venture capital, and fintech startups to bring the full spectrum of market participants together.

MAURITIUS

FINTECH HUB

The Mauritius Africa FinTech Hub is a fast-growing ecosystem where entrepreneurs, corporations, governments, tech experts, investors, financial service providers, universities and research institutions can collaborate to build cutting-edge solutions for the emerging African market. MAFH exists to pave the way for international fintech companies and financial service providers to access the African market. Similarly MAFH facilitates African fintech ventures to do business across borders.

regulators across 15 countries in Africa through the Cambridge fintech and regulatory online program for Africa (CFTRIA) done in partnership with Cambridge Centre for Alternative Finance (CCAF)

■ Building of a digital map for fintech innovations across Africa with specific attention on female-led initiatives to drive visibility and awareness of fintechs regardless of location and provide equal opportunities for all in partnership with CENFRI and findexable.

The AFN is a NPO backed by public and private sector stakeholders who believe in the vision of a digital Africa and are committed to achieve that vision.”

Dr Segun Aina, president, Africa Fintech Network

GHANA FINTECH AND PAYMENTS ASSOCIATION

The Association is the foremost fintech hub in the Ghanaian ecosystem serving as the sole umbrella body seeking to promote the advancement of financial technologies and payment systems in Ghana.

Operating as a not-for-profit organisation with the vision of becoming the leading fintech governing body, trusted advisor and facilitator of collaboration and growth of the fintech ecosystem in Ghana and beyond, with innovation and research being our hallmark. The Association is well-positioned to serve financial technology professionals, companies and startups, as well as other entities.

The Association has seen rapid engagements and traction in terms of memberships and is continuously growing each day as it aims to utilise credible partnerships to catalyse and drive adoption of fintech and payments across the region while protecting consumers in line with global standards.

"Day in and out, we continue to see advancing technologies being developed and which seeks to align with challenges that plague our continent with underbanked communities. However, I believe we can begin to look towards more customer centric and innovative products that works to address the language barriers of uneducated or illiterate clientele." Martin Kwame Awagah, president of the Ghana Fintech & Payments Association

THE ISRAELI FINTECH ASSOCIATION – FINTECH-AVIV

One of the world's largest fintech communities, operating since 2014, the Association consists of more than 40,000 entrepreneurs, fintech ventures, financial institutions, leading professionals and investors. It focuses on ways to support and facilitate the exporting of financial technologies to different regions in order to bridge the technology gap of financial institutions on different levels.

Nir Netzer, chairman of FinTech-Aviv, says: "In this unprecedented time of new economic and political order in the Middle East, we’re honoured to extend our relationship and partners network to different regions to initiate new collaborations in order to facilitate the export of Israeli technologies to new markets. The FinTech-Aviv community and its members proudly hold the torch of this exciting initiative and are humbled to be leading Israeli fintech companies towards the exploration of new horizons with new business partners.”

FINTECH ASSOCIATION TURKEY (FINTR)

The main goal of FINTR is to contribute to the development of financial innovation and financial technology industry locally and globally. FINTR works on the spread of innovation and advanced technology solutions in banking, insurance, capital markets, payment services and other financial sectors. In doing so, it embarks on increasing the number of innovative solutions and startups, developing partnerships and fostering the ecosystem.

Our mission as a non-profit entity is to curate the fintech ecosystem by increasing the number of innovative solutions and startups, enabling their expansion towards global markets, facilitating the emergence of global brands in the fintech industry, and supporting open innovation programs by traditional financial institutions. Along the same lines, we aim to strengthen Istanbul's role towards financial services and technologies.

We envision positioning Istanbul and Turkey in EMEA (Europe-Middle East-Africa) as a global centre of attraction and meeting point towards fintech services. Our vision pertains to creating a global innovation ecosystem for entrepreneurs from around the world. Demet Zubeyiroglu, chairperson - FINTR

FINTECH ASSOCIATION OF SOUTH AFRICA (FINASA)

FINASA was established in 2022 with the mission to nurture and empower the thriving fintech ecosystem that acts as a catalyst in the development of South Africa’s financial services industry to accelerate socio-economic growth.

This will be achieved via fairness, inclusion, diversity and equality across the ecosystem. FINASA aim is to create a conducive environment to stimulate innovation in the sector by increasing access, transparency and have a voice with regulators.

As a cross-industry, non-profit initiative, we intend to be a platform designed to facilitate collaboration between all market participants and stakeholders in the fintech ecosystem. FINASA is designed to be an effective platform for members to engage with multiple stakeholders to find solutions to issues. Andres Perez, director at Fintech Association of South Africa (FINASA)

MENA FINTECH ASSOCIATION –

Home to everything fintech in MENA, The MENA Fintech Association (MFTA) is an inclusive, non profit association that fosters an open dialogue for the region's fintech community. Bringing to ether all the 'movers & shakers' under one roof, the MFTA is the voice and nexus of the fintech industry in MENA. MFTA has been the sounding board for regional central banks and closely working with the regulators to establish policies that are conducive for fintech growth.

MFTA recently launched the Sustainable Fintech Alliance with Abu Dhabi Global Markets and Dubai International Financial Centre among the founding members. MFTA as a part of its talent development programme just completed the first cohort of Sustainable Fintech Leadership Programme by giving scholarships to 35 students across the globe in collaboration with ADGM Academy and London Institute of Banking and Finance.

"We are extremely proud of the way the entire regional fintech community at MFTA comes together to enable an environment that enables us all to contribute towards the future of finance." Nameer Khan, chairman of MENA Fintech Association

TALA AL JABRI

Tala Al Jabri is a venture capital and angel investor in fintech across emerging markets and a founding and IC member of Saudi Angel Investors.

"Fintech continues to be the most funded sector in venture capital across MENA and Sub-Saharan Africa.

According to Magnitt, startups in Africa raised over $2billion for the first half of 2022, with fintech garnering the largest amount of funding. Whereas facilitating access to credit to businesses and consumers seems to be a prominent theme in SSA, payments continue to be the most attractive and funded segment in the Middle East. For example, Saudi Arabia has been hard at work bringing new regulation that can facilitate payments such as open banking and issuing licences to 19 payment companies as of this writing. Of course, it is not the only theme that is in vogue. Tabby, the leading BNPL in MENA, has once again set a breakthrough by securing a record $150million in venture debt funding, demonstrating the under-tapped opportunity in consumer credit.

The regions are also attracting funding in crypto startups, bucking global trends that have been on a downward trajectory.

Compared to the previous quarter, Africa saw $280million fundraised in Q2, a 189 per cent jump from the previous quarter, that has been driven by demand to mitigate depreciating local currencies. In the Middle East, countries such as the UAE and Bahrain have developed some of the most advanced frameworks for a wide variety of VASPs (virtual asset service providers)."

ANDRA PUBLIC RELATIONS

Andra Public Relations is a Bahrain-based boutique firm with a niche focus on finance, technology, and other specialised sectors. Since launch in 2019, the company has spearheaded public relations efforts and campaigns for over fintech startups, corporates and financial institutions in the Kingdom of Bahrain and the MENA region

The firm also runs the FinTech Series which hosts renowned corporations, startups, and financial institutions from Bahrain and the MENA fintech space, such as including HSBC Middle East, Central Bank of Bahrain, BENEFIT, Aion Digital, Tarabut Gateway, Al Baraka Banking Group, The Bahrain FinTech Bay, just to name a few. The event has launched 12 editions so far bringing 50 local and international speakers on board with 500+ attendees

In partnership with Boxobia; Andra PR launched the FinEcho podcast earlier this year. It is a Bahrain-based financial podcast for the MENA region that features experts in the field to shed light on financial trends and themes.

VISA

“At Visa, we know the future of money is digital, meaning that we must adopt a digital-first and technology-driven approach to commerce experiences and new ways to pay. We collaborate with fintechs, digital banks and fintech enablers across the MEA region to pioneer new commerce and payments experiences for consumers and businesses, using our global reach and network scale for rapid expansion.

“Our belief in building strong and enduring partnerships with fintechs has resulted in a number of initiatives and programs to enable next generation technologies with Visa’s global network of more than 15,000 financial institutions and 80 million merchant locations.

“We have and will continue to support payment innovators. From the Visa Everywhere Initiative (VEI), which has brought visibility to startups in more than 100 countries since 2015, to our FinTech Fast Track and FinTech Partner Connect programs, which are designed to rapidly integrate and onboard fintechs, while expertly matching their products and solutions to Visa partners. These innovators are transforming the ecosystem, making it easier for people to access money and make payments.”

Otto Williams, SVP, head of product, partnerships, and digital solutions, CEMEA, Visa

LEBOGANG MOKGABUDI

“My mission is to leverage technology to enable the unbanked/underbanked to access affordable, accessible and relevant financial services products and leverage my network and expertise to enable African entrepreneurs to access capital and markets that expand their businesses. I have observed a shift in the African fintech industry from building digital rails and offering digital payment solutions to offering financial services on these rails such as microcredit, microinsurance and democratising investments.

“SME lending solutions that enable SMES to access funding, credit and alternative credit scoring mechanisms have been on the rise with companies such as Akiba Digital offering alternative credit scoring receiving venture capital from global players, TymeBank acquiring Retail Capital that lends to SMES and development funding institutions such as SEFA partnering with Peoples Fund to increase access to capital to small businesses in South Africa. Buy Now and Pay Later is projected by Worldpay to be the world’s fastest-growing payment method between 2021 and 2025 which is evident in the growth and acquisitions of BNPL startups such as PayFlex, offering interest free payment solutions, acquired by the Australian company Zip and HomeChoice International's acquisition of PayJustNow. BNPL apps cater to customers that do not have a credit card, and offer targeted sales offers, wish lists and budgeting tools and digital banks such as Tyme Bank have also launched a BNPL solution in MoreTyme. Companies such as MFS Africa have partnered with insurtechs to offer microinsurance on remittance products and companies such as Livestock Wealth have democratised investments, enabling Africans to invest in commodities that they understand, cows.”

Lebogang Mokgabudi a digital financial services expert with the IFC, Financial Services Advisory team, an independent non-executive director at Old Mutual Alternative Risk Transfer Limited and a member of the investment committee at Savant Venture Fund.

OLAYINKA DAVID-WEST –LAGOS BUSINESS SCHOOL

The Sustainable and Inclusive Digital Financial Services (SIDFS) initiative is a research, advocacy and capacity building initiative at the Lagos Business School (LBS). Out of Lagos, Nigeria, the initiative supports the financial services industry to create inclusive products for the bottom of the pyramid customers. In 2020, the initiative launched a Product Innovation Lab and has worked with 13 institutions to develop new financial products for low-income citizens. The initiative also tackles regulatory bottlenecks that are impeding financial inclusion progress through several interventions like training programs for regulatory agencies, and hosting industry-wide fora where ecosystem regulators and operators identify industry problems and co-create solutions.

Prof. Olayinka David-West, program lead (left), says, “The digital transformation of the financial services industry over the last 10 years has been remarkable with outsized gains in service delivery and distribution, speed, convenience, customisation and personalisation, and much more. At that same time, we have also witnessed an unprecedented surge of foreign investment in African fintechs that are tackling enormous problems like cross-border payments, financial exclusion, e-commerce logistics and fulfilment, etc. The next phase of this digital evolution requires providers to ideate new business models that can serve different customer segments (especially the low-income and informal markets) in sustainable ways. Our goal is to equip financial service providers with design thinking skills and tools and support them to localise the principles of human centred design as they design products for these different customers. This will catalyse financial inclusion and ensure that nobody is left behind.”

KONSENTUS

Open banking is accelerating in the Middle East and Africa (MEA). Nine countries have active open banking strategies, including regulatory-led markets such as Azerbaijan, Saudi Arabia, Nigeria, and the United Arab Emirates.

BIG CABAL MEDIA

According to Tomiwa Aladekomo, CEO of Big Cabal Media: "Despite the global economic downturn, the African fintech space continues to dominate across all considerable growth metrics. From the number of new startups to the amount of venture capital funding invested in it, the number of funding deals it closed, to other business activities like mergers and acquisitions. For instance, out of the $2.25billion investment raised in the first 4 months of 2022, 32 per cent of the amount went into fintech. And this is a trend we’ve noticed down the line.

"Mobile money (MoMo) would continue to reign supreme across the continent. While M-Pesa holds down the east Africa market, Orange and Wave rivalry continues in the francophone west African countries like Senegal and Cote d’Ivoire. Nigeria is trying to pick a spot. But, besides the fact that it came late to the party, the recent fraud cases between MTN and the banks will most likely slow down its mass adoption. Mobile Banking will continue to reign in that market in the interim.

"As the digital lending pulse becomes faster, thanks to the continental-wide inflation and increasing mobile phone proliferation and internet accessibility, we see a spike in the number of startups building credit facilities for businesses. On the other hand, the regulators continue to clamp down on the unethical practices of the instant consumer loan companies.

"There’s also a payment and remittance revolution, especially the cross-border remittance in and out of Africa. From Sudan to Egypt, Nigeria to Kenya and South Africa, we have seen a rise in this effort. For instance, Lemonade Finance, Kyshi, Bloom, etc. have all raised millions of dollars to ensure remittance into Africa is quick and affordable.

"Conclusively, with the recent activities of regulators in Nigeria, Kenya, South Africa, and the US, it’s evident that African fintech compliance (KYC and AML) efforts must be more stringent.”

Specifically,

With this in place, MEA has the potential to become a leader in open banking globally, promoting financial inclusion and enabling communities to benefit from new products and services. Clare Haskins, senior vice president, Commercial, Konsentus

ZURICH INTERNATIONAL LIFE

“

We have seen significant growth in the insurtech space owing to the adoption of new technologies such as AI and Big Data coupled with heightened customer expectations. In the current climate, insurers have a real opportunity to map out new methods to provide services, engage customers and reach underserved market segments, through digitalisation and streamlining back-office processes.

“Zurich Online is our one-stop digital portal and point of interaction for customers in the Middle East to manage their policies. Listening to customer feedback, we've developed and launched 14 of the most frequently demanded services, including the ability to manage beneficiaries, choosing how and when to pay premiums, viewing their policy valuation, switching investment funds and much more – providing a simple, secure and sustainable customer experience.”

Mufazzal Kajiji, chief executive officer, Zurich International Life

EVP CARDS & PAYMENTS –BLUE REWARDS (AN AL-FUTTAIM GROUP COMPANY

“ Fintech offers significant benefits to Al-Futtaim, a conglomerate managing some of the world’s best loved brands such as IKEA, Marks & Spencer, Toys R Us, Toyota and Volvo to name a few across MENA and SEA. We are constantly engaging with the fintech community to identify ways to engage with our customers more deeply and ultimately make their shopping experiences more seamless and rewarding.

“Our approach is to work closely with fintech as partners, not vendors, as we seek to optimise their product for our customer journeys be they in-store, web or app-based. A very successful example of this was to co-create the in-store customer journey for BNPL, leading to a faster rollout and customer take up of the services across our brands.

“With our new lifestyle app, Blue Rewards, we have worked with fintechs to develop the successful wallet and cashback proposition and will expand this into other financial services through our partnership model across the Middle East and South East Asia.” Paul Carey - EVP Cards & Payments – Blue Rewards (an Al-Futtaim Group company)

FIRST ABU DHABI (FAB) BANK

“ While the focus of open banking is financial services, it is important to note that fundamentally, open banking is not about banks. It is not even about APIs or fintechs. Open banking is about creating new value for consumers. The world is waking up to a simple and powerful fact: Data has power. And consumers should be able to get better value from their data.

“ Today, what we refer to as open banking is increasingly forcing banks to allow customers to leverage their data in new ways. Open banking is happening to banks.. it’s not something we are choosing to do. And there is a very mature, and well funded fintech ecosystem in the UAE just waiting for open banking to come to town. So the industry is watching the space closely. It’s an exciting time.” Gavin Payne, Former head of FABRIC (FAB Research & Innovation Centre)

STANDARD CHARTERED AFRICA AND MIDDLE EAST (AME)

“ The financial services industry is undergoing an unprecedented transformation powered by digital technologies and innovation. In this post pandemic economy, we are increasingly seeing more and more people turn to digital solutions. In response, the AME region has seen an influx of fintech startups, funding and increased support for existing and new ventures. Countries such as Nigeria, Egypt, Kenya and South Africa are powering the fintech industry in Africa; which is already an established global leader in mobile money. The UAE, Qatar, KSA and Bahrain for example are leading the way in terms of collaborating with fintechs to capture this segment of digital-first services to customers.

“At Standard Chartered, we believe collaboration between the entire ecosystem is an imperative. The fintech landscape comprising of startups, banks and governments will benefit from this cooperation as it combines their individual strengths for overall benefit, helping support new business models and better ways of doing business, with far-reaching advantages for both clients and markets. As a result, we aim to continue to partner with leading global and regional companies, invest in more digital capabilities, with a focus on fintech platforms and enhanced value by leveraging data and analytics, artificial intelligence, and machine learning.”

– Mohamed Abdel Razek, CTO of Standard Chartered Africa and Middle East (AME)

Digital revampingBanksbanking landscape in Qatar

Traditional banks, undoubtedly, form the backbone of the banking system; with their numerous branches spread across the world, banks have catered to the financial services’ requirements of their customers – from current or savings accounts to credit cards, various types of loans, insurance, and investment plans. However, technological advancements, growing digital adoption and penetration, together with an increasing number of smartphone users and internet access as well as mounting competition from fintech startups, have made repositioning of existing banking players necessary.

This has given rise to new-age digital banks. These entities are the online-only arm of incumbent banking players that function autonomously, catering their services online and adding another channel of conducting business with customers. They primarily focus on various niche customer segments that are mostly unbanked or underbanked, particularly tech-savvy millennials. Marcus (Goldman Sachs), 811 (Kotak Mahindra Bank), and Yono (State Bank of India) are some of the prominent global digital arms of incumbent banks enhancing customer engagements and reach

Globally, digital banks have expanded rapidly in the last few years demonstrating strong growth in terms of investment and the number of customer engagements. Undoubtedly, the foremost catalyst of this acceleration was the Covid-19 pandemic, which caused the closure of many brick-and-mortar branches and the enforcement of social-distancing measures over an extended time-period. This pushed banks to re-direct their customers towards digital banking windows and develop a clear preference for digital banking services such as remote and mobile payment solutions. The second main driver is the rise in fintech innovations with entities exploring new ways of delivering banking services to the tech savvy and underbanked customers.

The digital banks landscape in the MENA region lagged significantly behind other matured regions such as Europe, Asia-Pacific, and America due to slower adoption rate of modern banking standards. However, the scenario is rapidly transforming. Several traditional financial institutions in the MENA region have launched their digital-forward operations. ‘Liv’ by Emirates NBD, ‘Meem’ by Gulf International Bank, and ‘MashreqNeo’ by Mashreq Bank are few examples of front-end digital banks.

The banking landscape in Qatar, with eight listed commercial banks (four conventional banks and four Islamic banks) and a huge network of large financial institutions, is creating an impact across the region. Leading banks such as the Qatar Islamic Bank, Qatar National Bank, and Doha Bank, among others, are embracing the power of digital transformation for building resilience, offering contactless payments, self-service solutions, and a pragmatic experience for customers. Last year, Doha Bank was recognised as the ‘Best Digital Bank’ by the World Economic Magazine. Dukhan Bank, another leading bank in the region, was awarded the ‘Best Islamic Digital Bank’ in Qatar (2021)’ and the ‘Most Innovative Digital Bank’ in Qatar (2021) by New York-based Global Finance magazine

The Qatar Central Bank (QCB) has been continuously making proactive efforts through several policy initiatives to make Qatar a hub for digital banking innovation. Qatar FinTech Hub (QFTH) hosted its 4th Acceleration and Incubation Program, focusing on innovative ideas in 'Next Generational Banking'. The aim was to find solutions to four main challenges – helping financial institutions increase revenue and reduce cost, helping financial institutions use data-driven insights to create better products, enhancing customer experience and providing innovative market-first payment solutions for a seamless sports fan experience in collaboration with Visa.

Given the Government’s commitment toward National FinTech Strategy, coupled with the Qatar National Vision 2030, the Qatari economy will continue to evolve and perform well in the years ahead. With constant support and conducive regulatory environment, budding fintech ecosystem, and ever-increasing focus on customer experience, the digital banks are the ones that are positioned to reform the banking sector. Aysha Al Romaihi – Manager of Special Programs, Qatar Development Bank

READY FOR A WORLD OF WEB3

While worldwide firms tackle the complexities of engaging with this technology revolution, financial ecosystems such as Reltime continue to carve out a path to make adoption as easy as possible

Touted as the ‘next evolution of the internet’, Web3 promotes the incorporation of the industry’s most exciting innovations; most notably those of decentralisation, blockchain technologies and token-based economics.

The sector is moving at breakneck speed, which is why firms will need to move even faster if they’re to stand any chance of leading the way. For this reason, Oslo-headquartered Reltime unveiled its FastTrack to Web3 initiative. The service acts as a white-labelled B2B2C Web3 banking-as-a-service (W3BaaS) solution for anyone wishing to enter the Web3 embedded finance space efficiently.

Armed with Reltime’s W3BaaS, companies can build their own Web3 financial ecosystem within the short scope of three weeks. The solution is fully customisable and engaging companies can integrate various currencies (digital and fiat), settings, web domains and user experiences into the W3BaaS. Additionally, the solution can also be customised to support various languages, user experiences, backend processes and brand identities; in line with Reltime’s clients’ specific needs.

The game-changing Web3 pioneer and rising fintech star from the Nordics, which believes in putting ‘financial power in the

hands of people and businesses,’ is also expected to incorporate white-labelled virtual and physical cards into its solution early next year. Reltime has built its own Layer 1, Proof of Authority blockchain, with built-in identity, from the ground up. Running in tandem with its FastTrack to Web3 initiative, the company also recently introduced its FastTrack to Embedded Finance solution. Designed for telecom operators, financial service providers focusing on specific target groups, neobanks, gaming and virtual sports Metaverse enterprises, supermarket chains, shopping malls and e-commerce firms, the solution enables companies to

offer real-time Web3 financial services. The solution is fully compliant, including consideration of PEP, AML, low-cost eKYC and regulatory radar.

“Through Reltime’s best-in-class FastTrack to Embedded Finance, gamechanging financial services can be provided to your customer base under your own brand, providing attractive new revenue streams while reducing your customer churn,” says Peter Michel Heilmann, CEO of Reltime (opposite).

Companies can make the provision of seamless and safe Web3 financial services a reality for their customers, utilising Reltime’s decentralised, real-time, plug-and-play, low-cost solutions.

Merchants can expect to find the company’s W3BaaS particularly useful in a range of instances, including the ability to offer QR code payments to customers locally or globally, getting paid instantly, as a viable, cost-effective alternative to accepting traditional cards.

“Our new B2B2C solution gives companies the opportunity to enjoy the same benefits as Reltime’s current global, trusted, high-performance, Web3 platform is offering,” adds Heilmann.

Fundamentally, the white-labelled embedded finance solution will enable non-financial companies to launch neobank-type of services to their customers locally, regionally and globally, a process that traditionally would take several months to complete.

Following the announcement of its W3BaaS solution, Reltime has continued to focus on various elements of Web3 and the company’s role in its eventual widespread adoption.

It also recently confirmed speculation that it was working on creating its own decentralised exchange (DEX); being the foremost component of Web3 technology.

With an initial roll-out expected in January 2023, the company’s DEX will support P2P trading, swapping, pooling, winning and the farming of digital assets, commodities, precious metals, and foreign exchange for businesses, traders and producers worldwide; without the need for an intermediary.

“Our DEX could be used as a platform for local fair trade and premium cocoa

producers to trade their quality beans directly with buyers on the other side of the planet, without the interference of any intermediaries,” Heilmann cites as a real-world example of the DEX’s capabilities. The DEX’s internal smart contract capabilities are to support every stage of the transaction automatically, from the seller to transporter to buyer; championing transparency in the process.

“The Reltime DEX is securing the buyer and seller until the goods have been delivered,” affirms Heilmann.

When it comes to trading, Reltime will be able to secure the best delivery solutions by performing artificial intelligence (AI) and machine learning (ML)-backed electronic know-yourcustomer (eKYC) checks; mitigating money laundering cases in the process.

The company’s partners will benefit from the ability to mint or create and list their own tokens on the DEX, via an initial DEX offering (IDO). Furthermore, the company’s adjoining token sale platform can be used in conjunction with a pre-IDO to raise off-market capital.

Companies can make the provision of seamless and safe Web3 financial services a reality for their customers, utilising Reltime’s decentralised, real-time, plug-and-play, low-cost solutions

Unsurprisingly, Reltime has experienced immense demand for its newfound DEX, confirming heightened interest from potential partners worldwide, including in Europe, the Middle East, Africa and Asia; with particularly strong interest reportedly coming from trusted partners in Latin America.

On this note, Reltime has demonstrated its ability to respond to market demand with its recently announced expansion into Southern Africa; achieved through its partnership with the pan-African financial services firm Khumalo and

Mabuya Chartered Accountants (KnM).

Despite McKinsey forecasting 10 per cent per annum growth in the continent’s financial services market, reaching approximately $230billion in revenues by 2025, just three countries have real-time payments and the necessary payment rail infrastructure in place.

Reltime is seizing the white spaces emerging across the African market at astonishing speed, with a particular focus on distribution, acquisition, lending, borrowing and the provision of advanced infrastructures relating to Web3.

South Africa is of specific importance to the company’s expansion. The country is among the top 10 countries in the world to adopt digital assets and McKinsey predicts that South Africa will account for $80billion of the continent’s financial services revenues by 2025.

Reltime will also be looking to roll out its services to the Southern African countries of Angola, Botswana, the Comoros, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, Zambia and Zimbabwe.

“The timing of our strategic collaboration could not have been better,” comments Heilmann. “We are building a new movement in Africa and globally to change the way people and businesses financially interact and transact. The burgeoning region is very close to my heart, since, as a child, I lived and went to school in Ndola, Zambia. We warmly welcome Reltime Africa and its leadership team to our rapidly-growing family and congratulate KnM on its 10th anniversary.”

With its partners by its side and a strong reputation for Nordic accountability, Reltime is swiftly scaling up around the world, offering its unique global Web3 financial platform alongside the newlycreated DEX and its Web3 and Metaverse payment, identity and cold storage biometric card.

It is also committed to becoming the leading, preferred and trusted financial Web3 and Metaverse partner for people and businesses anywhere in the world. The only question that remains is, with the Web3 industry evolving just as fast as Reltime is reacting, what innovations could be next on the company’s agenda?

Chapter Three: Fintech hubs of MEA

The following section delves deeper into the Middle East and Africa (MEA) region through an analysis of key fintech markets and confirmation of information, reports and other research. This section builds upon last year’s first-ever research by The Fintech Times. It will identify key fintech markets in the region from 2022, though alignment with research and reports that are currently available. They will later be ranked as early-stage, emerging and premier player according to their overall fintech potential in a wider economic development lens, as per last year’s report.

This assessment is unique because it will take into account the current landscape of MEA in an economic development context, which is very important to factor in due to the nature of any sector to thrive and grow. Particularly unique for MEA is that economic development diversification and transformations are happening here. As highlighted in the previous chapter, regions such as the GCC have written and begun implementing their strategies to prepare for a future without oil and for a future that embraces digital and tools such as fintech. Across in Africa, where countries have also implemented their own strategies, many have done them for various reasons – to help reduce poverty via collaborations with global institutions such as the UN and World Bank as well to diversify their economies.

i. SELECTION OF COUNTRIES IN MEA – THE METHODOLOGY OF THE “23”

The MEA region is home to over 70 countries. This report takes a sample of key countries and analyses their fintech ecosystems. What is a key country in the context of fintech? Based on an initial pre-filtration through the coverage of The Fintech Times' Middle East and Africa section, coupled with current available primary and secondary data, we assessed the MEA region and that narrowed the list of countries to 22 for the first report in 2021. For this second edition in 2022, the same countries were retained, while a new country, Ethiopia, was added; bringing the total to 23. This 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 through reports that are currently out and various consultancies that have covered either the Middle East, MENA, or Africa – also 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

Once the countries were chosen based on the initial pre-filtration the following criteria and data gathering was done to confirm and rank the countries accordingly.

DETERMINING INDICATORS

Two wider themes were determined to evaluate the fintech ecosystems of the initially narrowed list of MEA.

■ Economic development as a whole – this determines the overall health, prosperity and advancement of the economy in question as a whole

■ Economic development pertaining to the advancement of digital and fintech as a whole – this looks specifically at the digital and tech ecosystem in the country with a focus on understanding the fintech landscape in the territory.

Each of the following were applied that factored either one of the two above themes (in some cases such as the tech indicators it applies to both)

ECONOMIC DEVELOPMENT: ECONOMIC & SOCIAL

Based on available data, a sample of economic and social indicators were used to understand the chosen MEA countries. The total of the scoring was weighted at 50 per cent overall:

Gross Domestic Product (GDP) per capita – what is the GDP per capita in each country? This will help determine overall standard of living from its economic output. The higher the GDP per capita the higher the score.

Higher education enrolment – The number of collegeeducated people in the country to assess human capital. For a sector as highly-skilled as fintech understanding the college- educated population is a strong indicator. The higher the number based on population ratio the higher the score.

Entrepreneurship – A thriving economy requires ambitious people to start businesses. Available public data from the Global Entrepreneurship and Development Institute 2018 report helped grasp this in MEA – their score of 0 to 100 was used with 100 being the highest

Ease of doing business – Overall ease of business in the country? This helps understand the mechanisms for conducting business as a whole – as the easier to do business the better and more appealing it is for investors for instance. The higher the ranking the higher the score. 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 – A quantitative metric is needed and population is good to determine the size of the country. The larger the population the larger the score.

Human Development Index (HDI) – For any economy looking merely at economic figures isn’t enough to grasp the true development of any country. Therefore, a human development index was factored in via public data from the United Nations Development Programme (UNDP) 2020 Human Development statistics. Their score is 1 being the highest possible human development and 0 being the least.

ECONOMIC DEVELOPMENT: TECH, DIGITAL & FINTECH

Based on available data the following sample data of tech and digital ecosystem 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.

ECONOMIC DEVELOPMENT: TECH & DIGITAL ECOSYSTEM

Number of startups – how many startups are based in the country? This can determine an overall ecosystem of tech and its strength in the respective country and overall entrepreneurship. The higher the number the higher the score.

■ Number of tech/startups (factoring in population)

– A holistic approach is needed so the number of tech/startups also has its own indicator that takes into account the number of startup/tech company per person. The lower the number per person the higher the score

■ VC deals – How many VC deals were done in the ecosystem? The higher the number the higher the score as it showcases investment activity, which helps play a key role in fintech

ECONOMIC DEVELOPMENT: FINTECH

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

■ Unicorns – this indicator shows whether there are unicorns in the country to help their fintechs and wider tech companies reach unicorn status. It’s an indicator to show growth of fintech companies beyond just startups and small & medium (SME). In addition, 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, the number of fintech companies where its country also has a strong fintech ecosystem with respect to companies. The higher the number the higher the score.

■ Number of fintech companies (factoring in population)

– A holistic approach is needed so the number of fintech also has its own indicator that takes into account the number of fintechs per person. The lower the number per person the higher the score

BONUS SCORE: (KNOWN) ECONOMIC DEVELOPMENT STRATEGY

A new addition to this version’s report, a bonus score has been incorporated in the mix. Based on known public knowledge, if a country has a wider national economic strategic in place, which includes aspects to promoting its wider digital transformation, the overall score gets an additional 0.25 points on the final score. This is important as it shows the country has a clear framework, effort and clear vision that can promote sectors like fintech.

SCORING MECHANISM AND SUMMARISATION OF THE FINTECH TIER CATEGORIES

A 10-point scoring across all the indicators was done, where 1 was low and 10 being the highest. More details can be found in the appendix.

SUMMARISATION OF THE FINTECH TIER CATEGORIES

Each of the countries sectored were then ranked in the following three-tier categories in terms of their fintech ecosystem activity.

■ Premier Global Hub – (Tier-One) – the top countries in the study that received an overall high score were chosen. It was due to their high scores which has been shown via the various indicators under the three themes. They would have had to score from 8-10.

■ Emerging Hub– (Tier-Two) – beyond the top three in the premier ranking, the top 10 countries that scored high were placed in the emerging category. Their overall initiatives and future aspirations were noted coupled with their high scores in the study. They would have had to score from 4-7.99. Within this rank, there will be subranks, therefore scores from 7-7.99 would be a highly-rank emerging hub, 5-6.99 a middle emerging hub and a score from 4-4.99 a lower-end emerging hub.

■ Early Stage - Developing – (Tier-Three) – the remaining countries that were not premier or emerging were then ranked in the early stage-developing category. Their fintech sector overall is in its infancy compared to some of their more established global peers but through time, if investment and dedication continues, their fintech ecosystem can increase their ranking status. These were ones that scored under 3.99. Countries with a score from 3-3.99 would be a higher-end 'market to watch' list.

Note, the other countries in MEA that were not featured would also fall in the Tier-Three status but most likely at the lower spectrum overall. Due to lack of data and limitations of research this is why not every MEA country was analysed. This is coupled with data available and knowledge of the MEA fintech space. In addition, the previous chapter showcased a concentration of fintech in MEA. However, this exercise is important to put aside any bias and have a quantifiable categorisation that factored in various economic development indicators (both as a whole and tech and fintech-specific), in this case a Tier-Three ranking, of various fintech hubs in MEA.

The ranking is not meant to be a competition of each country but rather an understanding, based on the current state of a country in the 22 chosen (economic development as a whole and economic development in the context of both tech and fintech-specific) how they fare based on the explained methodology. The research emphasis the placement of the countries in the tier categories rather than their individual scores. Details of the scoring results can be found in the appendix.

Finally, as stated, data used was information that was publicly available when this report was written from 2022. In some instances, the most accurate data was used when possible. Limitations stem from some data available publicly or unbalanced data as a consequence from the effects of Covid-19.

Data sources are: 331-397

ii. FINDINGS – RESULTS OF THE 23 FINTECH HUBS

Based on the study in this report, which was done in a similar way to the first edition last year, this year showcases the following results:

■ 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, Egypt, Nigeria, Mauritius, South Africa, Kenya, 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, like last year, scored the highest following this exercise, whereby they are the Tier-One fintech hubs. It is no surprise due to similarities they both share:

■ Entrepreneurial hub and business-friendly – this can be seen from the number of fintechs and tech companies they have, with the UAE having over half of fintechs from MENA (minus Israel and Turkey) and Israel alone outnumbering the rest of the MENA region; it also has produced quite a few of the world’s unicorns just in fintech alone.

■ Home to major commercial, financial and tech hubs – the two countries host respective hubs in other sectors, in particular those related to fintech such as financial and tech, with Tel Aviv in Israel being a hotbed for innovation (in addition to other parts of the country) and UAE home to both Dubai and Abu Dhabi. In particular, Israel and Dubai have very diversified economies whereby the services industry commands a significant proportion of GDP.

■ Strong developed economies – both are developed economies with a high-standard of living that has attracted talent from across the world.

■ Innovation-friendly policies – both governments have prioritised innovation, with Israel being a major investor in R&D and the UAE envisaging a world of blockchain and the metaverse.

For both to maintain their status, they will need to continue to develop and be innovating. Israel, which has noticeably been happening, is slowly keeping its talent whereby it can be doable to keep an HQ in Israel or at least its R&D and not necessarily move to other parts mainly the USA or UK. For the UAE, much stems from further entrepreneurs to come from within, create an environment to scale and create the first fintech unicorn, and also fierce competition from the region who are also vying to be fintech hubs.

TIER TWO 'EMERGING FINTECH HUBS'

The Tier-Two emerging fintech hubs range from the lower-end score to the higher-end score ones. The ones appearing on this list overall are generally no surprise, which encompass the rest of the GCC, in particular with Saudi Arabia, Turkey, Africa’s Big Four fintech players and also Mauritius, Ghana, Tunisia, Jordan and Lebanon, which historically despite its current challenges has been a major producer of innovation and contributor to the ecosystem. The following summarises each of their levels within this category:

■ Tier-Two (Higher-level)– Saudi Arabia and Turkey

■ Tier-Two (Middle-range) – Bahrain, Qatar, Kuwait, Egypt, Oman, Nigeria, Mauritius, South Africa, Kenya, Jordan and Tunisia

■ Tier-Two (Lower-level) – Lebanon and Ghana

The Tier-Two category shares similar characteristics:

■ Adopting pro-business policies – Many in this list have been or are in the process of converting their economies to be more business-friendly, whereby they are trying to attract not only more FDI but also increasing the level of entrepreneurship in their jurisdiction – mainly guided through their various economic development strategies.

■ Government aspirations with fintech in mind

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

– Many on this list have seen fintech play a strong part in the current and future economic development prosperity that it and wider digital can bring to their GDPs and overall quality of life

EMERGING

FINTECH HUBS (TIER TWO)

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

MIDDLE LEVEL: BAHRAIN, QATAR, SOUTH AFRICA, NIGERIA, KUWAIT, MAURITIUS, EGYPT, JORDAN, KENYA, 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)

■ Large populations or small ones with outward vision – Many on this list, such as the Big 4 in Africa, Turkey, Saudi Arabia – have large populations with their respective regional presence. This has provided the growth and demand and potential for fintech. In addition, those here that are not as big population wise, such as Lebanon and Mauritius, have been outward looking with respect to their manpower and economic growth

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 about 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

RESULTS OF THE INDICATORS CALCULATIONS (OUT OF A SCORE OF 10 AND IN ORDER FROM HIGHEST TO LOWEST): COUNTRY TOTAL WEIGHT SCORE

Israel 8.9

UAE 8.4

Saudi Arabia 7.7 Turkey 7.6 Bahrain 6.5

Qatar 6.3

Kuwait 6.2 Nigeria 6.1 Egypt 6.1 Mauritius 6.0 South Africa 5.9 Jordan 5.5 Kenya 5.4 Oman 5.2 Tunisia 5.0 Lebanon 4.9 Ghana 4.7 Morocco 3.9 Rwanda 3.9 Senegal 3.3 Uganda 3.2 Ethiopia 2.7 Tanzania 2.3 Source: Richie Santosdiaz and The Fintech Times

■ Advanced or middle or high-income economies – The countries here generally are either developed economies (in particular the Gulf countries here), in the high-income economy status like Turkey, or in the middle-income level like the rest of them (note – an exception to this is Lebanon, which even though in its glory days of once being an upper-middle income economy is now a lower-middle income economy).398

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

■ Entrepreneurial – Some of the countries here, notably Lebanon, despite its challenges still has a very entrepreneurial spirit that is still contributing to the wider tech ecosystem. In addition, Nairobi with its Silicon Savannah or Cape Town or Lagos or Istanbul are also creating and contributing to the tech ecosystem.

Minus Lebanon in the foreseeable, the future of those on this list looks to be bright with respect to fintech. To note, not as bad as Lebanon, Turkey’s Lira devaluation could see future issues that could impact its fintech industry as well.

With Saudi Arabia in particular, as the government has invested heavily overall in its wider Saudi Vision 2030, it can see the Kingdom soon achieve a Tier-One status with the metrics of this particular report in its current form. Also, others, notably the African countries

like the big four (Egypt, Kenya, Nigeria and South Africa) will continue to drive much of the fintech growth in the continent. However, emerging players like Mauritius and Ghana and Tunisia will further contribute and take a share of the pie.

TIER-THREE 'EARLY-STAGE FINTECH HUBS'

The remaining countries on the 23 are Tier-Three. This is divided into two subcategories:

■ Higher-level 'Markets to Watch' – Morocco, Rwanda, Senegal, Uganda

■ The rest – Ethiopia, Tanzania

THE TIER-THREE COUNTRIES SHARE SIMILAR TRAITS:

■ Middle or lower middle income or low income countries – the countries here are generally middle-income, lower middle income or low income economies. Their economic development of course has an impact on their infrastructure and current situation that shows a lack of technology nor accessibility that either limits innovations in fintech or makes it completely inaccessible to begin with.

■ Lack of fintech-specific and financial services derivatives or infant – Some of those on the list do have fintech-specific derivatives or aspirations and/or financial services whereby the aim of those sectors would be supported via the government to create the ecosystem but it still remains to be infant compared to much of the world. In financial services these includes the likes of Casablanca Financial Centre or Kigali Financial Centre, which will help transform and diversify their respective countries of Morocco and Rwanda. However, many here still lack some specific vision and implementation of it to take the sectors in overdrive, in particular Ethiopia and Tanzania which ranked the lowest compared to the others.

■ Aspirational with future economy – Despite their challenges, there are aspirations that are seeing the countries in the long-term to convert their income status, whereby they can alleviate poverty but use tech and digital to help do so.

On a final note, the 'Markets to Watch', in particular Rwanda, will, should their growth trajectory continue, to see them as Tier-Two fintech hubs in the foreseeable future.

iii. COUNTRY ECONOMIC AND FINTECH BREAKDOWN LANDSCAPES

The following will now highlight each of the 23 countries in alphabetical order 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)

BAHRAIN 1

CAPITAL AND FINANCIAL HUB: Manama (KNOWN) KEY ECONOMIC DEVELOPMENT STRATEGY: Bahrain Economic Vision 2030

OVERVIEW Bahrain has over 120 fintechs but the majority are within payments and crypto, according to Bahrain Fintech Bay’s Fintech Ecosystem 2022 Report.399 The Central Bank of Bahrain (CBB) has introduced several new regulatory reforms and policies including crypto-assets, digital financial advice, crowdfunding, open banking and the e- KYC framework. The ecosystem also boasts over 19 incubators and accelerators. There are almost eight investing entities in the Island nation that are actively investing in fintechs.

Despite the Kingdom’s small size (it is a mere 765.3 square km), its business and expat-friendly approach, coupled with its proregulatory approach, has resulted in an attractive fintech friendly regulatory framework that appeals to investors.

It was one of the first in the MENA region to introduce a regulatory sandbox following economic free zones Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC); Bahrain’s was introduced by the CBB and was the first on-shore.400

Examples of those companies include crypto platform Rain, trading platform CoinMENA, digital banking platform provider Aion Digital and open banking platform Tarabut Gateway. It has aslo championed open banking in arguably not just the Gulf region but MEA as a whole. In 2018, it issued open banking rules and the framework on its governance and sharing of data followed in 2020.401

The Kingdom is a historical financial services hub. It is home to almost 400 licenced financial institutions, representing a mix of international, regional and local names. Representing one of its most important non-oil sectors, it accounts for over 17 per cent of its GDP. The financial sector is also one of Bahrain’s largest employing sectors; Bahrainis represent over 66 per cent of the sector’s workforce. Interestingly, since 2002, the CBB has been the single regulator and source for governance in the financial sector; it also is ranked first in the MENA region for financial freedom.402

In terms of fintech adoption and/or disruption, 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.403

IN

FOCUS

EGYPT 2

OVERVIEW While around two-thirds is still unbanked, Egypt has a population of over 100 million making it one of the region’s largest countries. It is also a low-middle income nation according to the World Bank. Cairo is the largest city in MEA and accommodates one of the world’s largest populations.

Fintech Egypt‘s Egypt Fintech Landscape 2021 report highlighted the tremendous growth in venture capital investments over the last five years from around $1million raised in three fintech deals in 2017, to reaching what exceeds $159million, only last year with 32 fintech deals. Investments have soared by more than 300 per cent during only the last 12 months.

Fintech and fintech-enabled startups have steadily increased, from only two in 2014 to 112 by the end of 2021, in more than 14 innovative sub-sectors such as payments and remittance, B2B marketplaces, lending and alternative finance.409 Noteworthy is that the majority of fintech startups were started by the youth

Despite the challenges of Covid-19, Bahrain’s vision and the 2020-present pandemic further solidified the need and growth for fintech and wider digital. According to figures from the CBB last year, there were more than 11.3 million digital transactions in Bahrain during the month of August, valued at $743.7million. The value of e-commerce and point-of- sale (PoS) payments rose by 50 per cent in (25 to 35 years old), which further helps implement the vision behind Egypt’s national economic diversification strategy of Egypt Vision 2030.410 Fintech Egypt was also created that aims to be the catalyst in promoting fintech in the country.

Besides government support, various organisations – both native and from overseas – have helped further mature the Egyptian market. These include the Egyptian Fintech Association, accelerators such as Flat6Labs, Plug and Play and 500 Startups and Falak, or VC firms such as Sawari Ventures, MEVP, Algebra Ventures and Lotus.

According to Fintech Egypt, the first half of 2022 saw a 12-times increase in fintech and fintech-enabled investments compared to 2017, reaching an all-time high of almost $167million in a total of 31 deals (as of H1 2022). Five of those deals had investments amounting to $10million or more.411 It was Egypt who produced the first fintech unicorn in the Arab world with Fawry.

Payments and remittances dominated those H1 2022 investments with a 58 per cent total share, which was followed in second place by lending and alternative finance which had a 26 per cent share. In third place was wealth management and savings at 12 per cent and the remaining went to other fintech subsectors (B2B marketplace, data analytics, insurtech, payroll and benefits etc.).412

Unique to mainly Northern African countries but especially to Egypt is its geographical location where it acts as a bridge between the Middle East and the wider Arab World as well as the African

KEY ORGANISATIONS Bahrain Fintech Bay, Bahrain Economic Development Board, Central Bank of Bahrain (CBB), Women in Fintech Bahrain (WIFBH), Al Waha Fund of Funds, Tamkeen

KEY ORGANISATIONS Central Bank of Egypt (CBE), Fintech Egypt, Egyptian Fintech Association, Insurance Federation of Egypt, Financial Regulatory Authority (FRA), Ministry of International Cooperation

CAPITAL AND FINANCIAL HUB: Cairo KEY ECONOMIC DEVELOPMENT STRATEGY: Egypt Vision 2030

August when compared to the same month last year.404 The data also shows how there were more than 53 million digital payments in the first half of last year. Bahrain’s national electronic wallet, BenefitPay, announced a 785 per cent increase in the number of remittances through its Fawri+ service (an online payment service introduced under the Electronic Funds Transfer System) in 2020 – exceeding $5million.405

Innovations include FinHub 973, launched by the CBB, which is the region’s first cross-border, digital innovation platform that connects and facilitates collaboration between financial institutions and fintechs under the supervision of the central bank. Batelco also became the first teleco in the GCC to receive a licence for open banking last year.406 407

FINTECH SUBSECTORS Out of a sample of 71 fintechs, they were:

continent. Initiatives with regards to wider cross-border payments and other further economic integration – notably being part with most of its other fellow African nations in the African Continental Free Trade Area (AfCFTA) with its Pan-African Payment and Settlement System (PAPPS) to its other hat in the Arab World with the Arab Monetary Fund’s owned Buna Payment

Egypt looks to further benefit in the future with more seamless cross-border payments and wider international trade and investment with its fellow African and Arab neighbours. Visa also launched its global She’s Next initiative in Egypt to economically empower local women entrepreneurs and SMB owners. FINTECH

systems, (iii) digital interactions (iv) digital ecosystem. These recommendations have been selected to catalyse the realisation of Ethiopia’s broader development vision, including job creation, forex generation, and achieving middle income status by 2025.” Similar to other national economic development strategies, Ethiopia’s digital adoption will help boost job creation and future economic growth. 417

Ethiopia is a new entrant to this year’s report. While constructing the country’s wider digital financial services ecosystem, a major challenge that persists is its comparatively low penetration levels compared to its other neighbours in East and Southern Africa. According to the United Nations Capital Development Fund (UNCDF), this is mainly due to the low performance of the mobile money environment, which is the primary driver of accessing and using digital financial services in the region. 415

OVERVIEW

The government has seen its potential and has started making strives to improve its fintech inclusion. First, in 2016, Ethiopia’s Council of Ministers ratified the National Financial Inclusion Strategy (NFIS) as a firm indication that it recognises financial inclusion for all as a strategic priority. In addition to this, in 2020 the National Bank of Ethiopia (NBE) amended a payment system law, whereby foreign investors were permitted to set up businesses in Ethiopia as digital financial services providers for the first time.

Africa has seen huge adoption of mobile money, and while this is a trend across most of the continent, not every country has seen the full potential of the technology. Ethiopia is not one of these though, as it is slowly being converted: local non-bank actors are now allowed to offer mobile money services, showing the country recognises the tech’s potential. 416

The government, as part of its wider economic development strategy, launched the Digital Ethiopia 2025 national strategy in 2020. According to the government’s website, it admits that despite its own growth, it hasn’t adopted digital transformation nor fully embraced it, however, the strategy will help transform the nation to a digitally friendly one. According to 2025’s strategy summary, “Through a robust gap assessment, the strategy provides recommendations across the four foundational cross-sector areas of (i) infrastructure, (ii) enabling

There is huge potential for fintech in Ethiopia. First of all, it is big. According to the UN, it has a population of at least 120 million people, making it the second most populated country in Africa.

Banks especially have also been adapting and embracing technology in the last few years, reflected in their customers’ usage of said technology. The use of mobile and internet banking increased from 2017/8 to 2019/20: in 2019/20 transactions worth ETB 15billion ($290million) have been conducted using internet banking, an increase from ETB 1.8 billion ($25million) from the previous time period. Despite this, from last year 98 per cent of transactions are still in cash and over 80 per cent still go to a bank to withdraw money.418 As a whole, it is estimated that 65 per cent of the population remains to be unbanked.419

This year it is expected that the market’s largest segment will be digital payments, with an estimated total transaction value of almost $1.5billion ($1.485). Additionally, it is expected that by 2026 the number of users is expected to reach over 48 million users, with the digital investment segment also expected to have revenue growth of over 40 per cent in 2023. 420

Before any predicted growth, in particular by foreign players (for example, it is expected that Safaricom and Vodacom’s M-Pesa will enter the market when they can –which got approved just this October), the state-owned telecom operator, Ethiotelecom launched Telebirr in May last year – Ethiopia’s first telecom mobile money service. There are now 19 million customers within a year –

Partnerships continue to make ways in fintech and Ethiopia is no exception. For instance, this has seen the likes of payment giants Visa and Mastercard both partner with leading Ethiopian banks (Zemen

422

almost a third of its telecom customers.421

with Mastercard and Visa with Bank of Abyssinia (BoA).

KEY ORGANISATIONS National Bank of Ethiopia (NBE), Association of Ethiopian Insurers, Ethiopian Health Insurance Agency, Ministry of Innovation and Technology, Ethiopian Digital Transformation Program Association, Ethiopian Entrepreneurs Association, Ethiopian Investment Commission

CAPITAL AND FINANCIAL HUB: Addis Ababa

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

Sultan Hassan Mosque and the cityscape of Cairo

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

KEY ORGANISATIONS Bank of Ghana, Ghana Fintech and Payments Association, Ghana Investment Promotion Centre, Security and Exchange Commission, the Pension Authority, National Insurance Commission, Ministry of Communications and the National Communications Authority (NCA), Ghana Investment Fund for Electronic Communications (GIFEC)

CAPITAL AND FINANCIAL HUB: Accra

KEY ECONOMIC DEVELOPMENT STRATEGY: Ghana Vision 2020, Ghana Digital Agenda

OVERVIEW It is estimated that Ghana’s unbanked population remains to be under 60 per cent, presenting an opportunity for the generally low-middle income economy of Ghana.

The Bank of Ghana last year published the circular A Summary of Economic and Financial Data, highlighting that the number of active mobile money accounts grew to 17.5 million last February (compared to a year prior in 2020 at 14.7 million. The circular highlighted the growth of active mobile money agents in the same period to 465,000 (compared to 235,000 the previous year).423

Ghana’s fintech can be most visible to the public with respect to the popularity of mobile devices and mobile money specifically. The Bank of Ghana also reports that in 2021, there were 40.9 million registered mobile money accounts and 17.5 million active accounts (note in 2021 Ghana’s population according to the UN was just over 31 million people).424] Ghana has been one of the world’s fastest growing and significant markets for mobile money.425

In 2020, mobile money in Ghana further grew in popularity. The Bank of Ghana introduced regulations to facilitate onboarding of MSME merchants that may not meet the threshold for KYC requirements set out in the Payment Systems and Settlement Act.

Much of the recent digital transformation stems from the government’s own economic development diversification and push towards a digital economy. It first had its own national strategy titled Ghana Vision 2020 426 and much of the development to promote the ecosystem stems from the Ghana Digital Agenda.427 Exciting announcements this year include the National Insurance Commission implementing the Innolab Insurtech Accelerator Programme to innovate insurance products and services. The programme seeks to stimulate innovative solutions to drive inclusive insurance for MSMEs and the public.428

In April, the World Bank approved $200million to help Ghana’s

government increase access to broadband, enhance the efficiency and quality of digital public services, and strengthen the digital innovation ecosystem to help create better jobs and economic opportunities.

Digital is one of Ghana’s best-performing sectors. During 2014 to 2020 the sector grew on average shy of 20 per cent. The funding aims to remove key bottlenecks to further accelerate Ghana’s digital transformation - a key digital leader in Sub-Saharan Africa.429

Earlier this year, controversially, Ghana’s parliament passed a ‘fintech tax’ which placed a 1.5 per cent tax on digital financial services, known as e-levy. This led Ghana, alongside the likes of Zimbabwe, to have one of the steepest taxes on fintech compared to its other African neighbours.430

Finally, in June, Ghana Interbank Payment and Settlement Systems (GhIPSS) launched the GhanaPay mobile wallet to encourage the rise of the country’s cashless and financiallyinclusive ecosystem. The mobile money service is an open application and offered universally across all the country’s incumbent and rural banks, including savings and loan companies.

Bank of Ghana governor Dr. Ernest Addison said: “In less than a decade, GhIPSS Instant Pay transactions valued at GH¢420,000 ($52,755). Ghana’s use of cash also is diminishing. Another key development was that Ghana’s cash usage measured by currency in circulation as a ratio of GDP declined from 6.8 per cent in 2016 to 4.7 per cent last year. In addition, Ghana’s cheque usage per capita, which was 25.67 in 2016, declined to 18.9 last year.” 431

Investments in the wider ecosystem can be seen in the private sector, such as Africa Data Centres, part of the Cassava Technologies Group, which is building a 30MW data centre facility in Accra, Ghana. The Bank of Ghana also announced a fintech office.

Finally, the Bank of Ghana also launched an innovation and regulatory sandbox to help evaluate solutions in pursuit of its financial inclusivity goals.432 It is understood that it also might be in the final stages of its E-cedi (Ghana’s digital currency project).433

FINTECH SUBSECTORS 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.434 435

formulated following a discussion of the comments of the Advisory Council on Banking Matters as well as comments from the public.441

FINANCIAL HUB: Tel Aviv

KEY ECONOMIC DEVELOPMENT STRATEGY: Digital Israel

OVERVIEW

January to November 2021 saw startups raising $25billion, bringing 33 companies into the esteemed unicorn club. 436 This marks a year-on-year increase of 136 per cent in equity funding, while funding in Israeli startups is over 70 per cent more than the global average.

Israeli fintechs raised $4.5billion last year, which trumps 2020’s $1.9billion and 2019’s $1.5billion. In fact, 2021 was more than the three previous years combined, says Viola Group.437 The scaling ability of Israeli startups is significant. The country is home to some of the world’s famous unicorns – one in every five is estimated to be fintech-related; including eToro, Payoneer, Lemonade, Rapyd, Pagaya, Earnix, Tipalti, Hippo, Fundbox and Melio.438

Israel’s small market size and outgoing approach have spurred many of its startups into scaling and expanding quickly, with many bringing new solutions to Europe and the US. A Viola report highlights that last year Israeli companies were also being acquired to keep their lead in the global market – with 10 noticeable mergers and acquisitions last year including Lemonade’s $500million acquisition of Metromile and Rapyd’s $100million deal with Valitor and $2million deal with Hong Kong cross-border trade enabling platform Neat.439

Special purpose acquisition companies (SPACs) have made their way into the Israeli unicorn and fintech circle – where companies such as Payoneer, eToro, Hippo and Fundbox have and/or attempted to use this route.

When looking at funding last year, cryptocurrencies were among the two of the biggest segments in the Israeli fintech scene. Crypto startups saw a nine-fold increase from last year when it jumped to over $1billion (compared to $116million). 440

Earlier this year, due to the popularity of virtual currencies, the Bank of Israel’s Banking Supervision Department announced the publication of a draft regulation in the area of AML/CFT risk management. It was distributed to the Advisory Council on Banking Matters for public comments. A final guideline will be

It was announced that non-fungible tokens (NFTs) will be subject to tax by the Israel Tax Authority, similar to cryptocurrencies.442 Other headlines in cryptocurrencies included Israel’s Bank Leumi becoming the first traditional bank in the country to allow customers to trade cryptocurrencies such as Bitcoin and Ethereum. Coinmama was bought out for assets totalling more than $35million by Wellfield Technologies from Canada. It is estimated that 28 per cent of Israelis own cryptocurrencies.443

In terms of digital currencies as a whole, the Bank of Israel published released the results of a lab experiment that examined user privacy and the use of smart contracts in payments. This was the Bank of Israel’s first technological experiment with a central bank digital currency (CBDC). 444 As a whole, the idea of a ‘digital shekel’ – an Israeli digital currency – could potentially be one step closer to happening. 445 As Israel has been more market-led rather than legislative-led, compared to other parts of the world much of its fintech regulation is still behind. However, that looks to change.

With regards to open banking, as reported by the Times of Israel, “Starting this month this year, thanks to a new law, fintech companies will be able to get licenses allowing them to access and work with consumer data held by Israel’s big banks.

The law in question, the Financial Information Services Law of 2021, clarifies the obligations of the big banks to share consumer data with third-party applications and establishes the Israel Securities Authority (ISA) as the regulator for financial information services.”446

FINTECH SUBSECTORS

KEY ORGANISATIONS Central Bank of Jordan, Ministry of Digital Economy and Entrepreneurship, Insurance Commission of Jordan, Jordan Insurance Federation, ICT Association of Jordan, Jordan Investment Commission

CAPITAL AND FINANCIAL HUB: Amman

KEY ECONOMIC DEVELOPMENT STRATEGY: Jordan 2025

OVERVIEW Jordan has a very young population, with around 60 per cent under 30. Jordanians are often highly educated and well connected with the world. Nevertheless, many have had to immigrate to seek better opportunities, as estimations suggest 10 per cent of its citizens are abroad.449 To improve its wider economic development, the Kingdom came up with Jordan 2025: A national vision and strategy.450

The Central Bank of Jordan (CBJ)’s National Financial Inclusion Strategy 2018-2020 also aimed to “build on a set of priority policy areas, three of which form the core sectoral pillars: microfinance; digital financial services; and small and medium-sized enterprise finance.”451

Only 33 per cent of adults in Jordan, and 27 per cent of women, were financially included in terms of account ownership. Even though it had a very high rate when compared to its MENA, it was and still is considered low in comparison to other nations with

INFOCUS KENYA 7

CAPITAL AND FINANCIAL HUB: Nairobi

KEY ECONOMIC

similar income levels.452 Therefore, having an educated population, coupled with relatively strong entrepreneurship and startup scene, presents an opportunity for the Kingdom of Jodan.

Earlier this year, Cairo Amman Bank built the neobank LINC. This new digital ‘bank for you’ offers a full suite of financial services like debit, credit, prepaid cards, international money transfers – to name a few of its perks.453 Partnerships are also happening between banks and fintechs. For example, Arab Bank has two initiatives that are focused on fintech collaboration, AB iHub and AB Accelerator.454

Another initiative highlighted by KPMG is the ISSF (Innovative Startup and SMEs Fund), which launched with a $100million fund, is focused in part on the fintech industry. Initiatives such as this help build the startup ecosystem and spur investment from the private sector. Success has been seen in the last year as the ISSF had a $400,000 joint fundraising between the company itself, Jordan Ahli Bank and startup, Whyise.455 The country’s central bank, CBJ, like many highlighted in the Middle East and Africa (MEA), has established a regulatory sandbox.456

The market’s largest segment will be digital payments with a total transaction value of $6.3billion this year.457 To note, a big part of Jordan’s fintech ecosystem development was the CBJ creating the Jordan Payments and Clearing Company (JoPaCC), which helps develop digital payment systems and invest in innovative technologies.

Jordan hosts 760,000 refugees and asylum seekers registered with

months of this year at $482million than it did last year in total at $412million.465 Nairobi also launched its new Nairobi International Financial Centre (NIFC), offering investors across the financial services sector support and offers – like tax and immigration incentives, as well as office space in the new building.

OVERVIEW

Kenya has become not only a regional powerhouse in East Africa but in MEA region as a whole. In particular, its capital and largest city, Nairobi, is even dubbed 'Silicon Savannah' due to its strong tech ecosystem. Both multinational companies and those specifically in the tech and fintech sphere, have made strong investments in the country, boosting foreign direct investment.

Microsoft and Visa have made commitments to the country, with the former announcing a new office for its African Development Centre (ADC). Nairobi will also host a first for Africa – the Microsoft Africa Research Institute (MARI). While Visa launched its first innovation hub in Africa – the Visa Innovation Studio.461, 462, 463

Alongside Egypt, South Africa and Nigeria; Kenya is now one of the major 'four fintech hubs' in Africa.464 With regards to VC funding, Kenya attracted more venture funding in the first three

Remittance inflows to Kenya have increased tenfold in recent years - in 2021 reaching a record $3.718billion. This surpassed the previous record of $3.094billion set in 2020; according to the Diaspora Remittances Survey published by the Central Bank of Kenya (CBK).466 As many Kenyans live abroad and many non-Kenyans reside in Kenya, Kenya plays a strong role in the wider global remittances industry.

NEAR Foundation this year announced the launch of Kenya Regional Hub in partnership with Sankore, a Kenya-based NEAR Guild to accelerate blockchain innovation, education, and talent development across the African continent.467

The CBK has outlined a new path for the country’s payment capabilities with the launch of its National Payments Strategy 2022 to 2025. The Strategy aims to realise the vision of a secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations.468 This complements the wider economic development strategy of the country – Kenya Vision 2030.

Slightly negative news saw CBK order banks to stop working with Flutterwave and Chipper Cash due to the pair not having the licence to operate remittance services in Kenya.469

KEY ORGANISATIONS Central Bank of Kenya, Kenya Fintech Association, Digital Lenders Association of Kenya, Capital Markets Authority, Insurance Regulatory Authority, Association of Kenya Insurers, Nairobi International Financial Centre, Kenya Investment Authority

DEVELOPMENT STRATEGY: Kenya Vision 2030, National Payments Strategy 2022-25

UNHCR. Of those, some 670,000 are from Syria, making Jordan the number two host of Syrian refugees per capita globally behind Lebanon. Many are financially excluded due to their circumstances.

In Jordan, as highlighted by Tufts University, the government has promoted the use of electronic financial accounts through mobile wallets. These ‘m-wallets’ are digital reservoirs on mobile phones where users can store money that they can later release as payments, remittances, or cash withdrawals. Despite its priority in the inclusion strategy, m-wallets weren’t really mainstream until the 2020 pandemic made digital vital for everyone, including Jordanians.

The CBJ took prompt measures to allow online registration and electronic KYC verification for m-wallets. This included CBJ partnering with the National Aid Fund (NAF) and Social Security Corporation to distribute aid to vulnerable Jordanians through m-wallets. From March to July 2020 Jordan saw a 40 per cent increase in the number of

registered wallets, while by May last year saw one million wallets registered.458

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’ programme 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.459 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.460

Nevertheless, Kenya would be served an injustice if we failed to mention ita global recognition for driving and popularising mobile money. This began with the launch of M-Pesa in 2007 by Safaricom and Vodafone. Its popularity has helped bring financial inclusion to the masses in Kenya with anyone with a basic phone able to use USSD technology to access mobile money. Safaricom is now estimated to contribute to five per cent of Kenya’s GDP.470

During the first 11 months of last year, Kenyans made 1.9 trillion mobile money transactions worth more than $55billion, while transactions in the first 11 months of 2021 were up 20 per cent on the whole of 2020. Kenyans made over 37.6 million transactions every day at 176 billion Kenyan Schillings KES ($1.49billion).471

A report from the International Monetary Fund highlights that "Kenya represents today one of the most successful cases regarding the use of mobile money."472 While financial inclusion in Kenya was at

Amman, the capital of Jordan

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

CAPITAL AND FINANCIAL HUB: Kuwait City

KEY ECONOMIC DEVELOPMENT STRATEGY: Kuwait Vision

through a designated electronic platform. Also, the new system enables all local payment and transfer transactions among banks operating in Kuwait and to customers’ accounts to go through within seconds, and instantaneous settlement of banks’ daily balances. 483 Partnerships between banks and fintechs are also emerging. The Oxford Business Review highlighted:

Over 50 per cent of Kuwait’s population fall in the 15 to 39 years age group. In addition, 70 per cent of those who fall under the age group of 15 to 24 years old have a banking relationship, which is much higher than the 33 per cent average for the Middle East and 54 per cent globally. 476 Nearly 80 per cent of those G aged above 15 has an account with a financial institution, almost a quarter has a credit card, and over a third makes online pues and/or pays online bills. 477 During the 2020 pandemic, Kuwaitis also went digital. Online banking usage was at 84 per cent during the pandemic. Eighty per cent in Kuwait felt the government and telecommunications providers were ready to shift to online services. 478

OVERVIEW

Kuwait has been a historical regional hub for the financial services industry. 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.479 Also, Kuwait has produced some of the region's most iconic tech companies, such as delivery app Talabat and e-commerce platform Boutiqaat. Fintech has potential to grow in Kuwait. The Central Bank of Kuwait (CBK) launched its regulatory sandbox back in November 2018. The following year saw the government launch a $200million fund for investment in technology. 480 A fintech unit in the CBK went live as well. 481 It has also focused on the continued development of its regulatory frameworks, mainly concerning cybersecurity and electronic payments.482

Last August, the CBK launched the new Kuwait Automated Settlement System for Interparticipant Payments (KASSIP). The system offers several advantages related to ensuring the security and smoothness of payment and settlement transactions and to liquidity management as well as allowing banks to issue reports on and monitor payment settlements

■ Kuwait Finance House and National Bank of Kuwait (NBK) partnering with blockchain specialist Ripple and Gulf Bank using biometric facial recognition on its mobile app

■ Kuwaiti fintech companies, such as secure payments brands Tap Payments and MyFatoorah, as well as real-estate-focused Ajar Online demonstrate the significant potential of the local landscape

■ NBK launched its personalised investment app called NBK Capital SmartWealth service

■ Boubyan Bank announced a new smartwatch payment system484

NBK also launched its first digital bank Wayay, Kuwait’s first fully digital bank for youth.485 NBK’s Group Digital Office, which acts as an Innovation Lab for NBK, comprising Digital Office and Digital Factory, acts as an accelerator. Boubyan Bank, the leading Islamic bank based in Kuwait, signed a landmark agreement with Dubai International Financial Centre’s DIFC FinTech Hive to launch the ‘Boubyan Bank Accelerator Programme.’ Despite successes so far, more can be done to help fintech grow. Despite a lower adoption of fintech compared to its other GCC neighbours, 83 per cent of Kuwaitis are willing to adopt fintech solutions.486

CAPITAL AND FINANCIAL HUB: Beirut

KEY ECONOMIC DEVELOPMENT STRATEGY: N/A

OVERVIEW Even before the coronavirus pandemic and the Beirut explosion, Lebanon’s economy hit a few economic and political bumps. Nevertheless, the Lebanese were and are a very resilient people – having gone through various cycles of downturns in their economy such, as the Lebanese Civil War from 1975-1990.

Before cities like Dubai and Manama, Beirut was considered to be the main financial hub of the Middle East. It had its own home-grown banks which included Bank Audi, BLOM Bank, Fransabank, Societe Generale de Banque au Liban (SGBL), Byblos Bank, and Bank of Beirut, as well as the Union of Arab Banks. It was even known as the 'Paris of the Middle East'. Despite the current challenges, which this June has seen its inflation reach 210 per cent488, the ecosystem has a relatively sizeable number of catalysts to support the wider entrepreneurial community. For instance, there is Berytech, an ecosystem for entrepreneurs and StartechEUS, a next-generation fintech studio. Other various accelerators and incubators in the country include speed@BDD, Smart-ESA and the UK Lebanon Tech Hub. And there is Beirut Digital District – a cluster of innovation designed for the digital and creative community.

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.489 Due to the need from past challenges, the Lebanese have also been open-minded about adopting new technologies. For example, as a result of the destruction from the Civil War, Lebanon was the first country in the 1990s in the region to have a mobile network.490 So can new technologies in fintech also bring value to the daily lives of Lebanese?

In 2017, 54 per cent of people with a bank account had adopted digital banking in Lebanon. In addition, in 2016, Lebanon ranked second in the region for the percentage of people who exclusively used mobile banking. The country as a whole offers opportunities not just in fintech, but in its sub-sectors too such as insurtech, e-payment and paytech.491

Due to the capital controls on accounts, coupled with the weak Lebanese Lira, remittances have become vital in the country’s GDP

and worth over 20 per cent of it now492, especially as many Lebanese have/or want to immigrate; fintech has opportunities to further penetrate in that space.

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, that 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.493 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.494 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.495

In terms of the regulation that encompasses fintech, not much appears to have changed in today’s terms.496, 497 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, the likes of a regulatory sandbox and other initiatives could help the economy recover.

Saying that, organically, companies are having success in Lebanon and helping to build the future of fintech there. For example, Codebase Technologies, a Dubai-headquartered technology solutions company, after joining the Visa Fintech Partner Connect programme, this year announced a partnership with Credit Libanais to launch Lebanon’s first digital onboarding offering and eKYC for prepaid cards.498

Lebanon is home to a large population of refugees (1.5 million). Fintech could also present potential opportunities that could help many of them as most are financially excluded and lack legal status.499

The Lebanese boasts one of the highest levels of both total early-stage entrepreneurial activity and established business ownership, where nearly one in four adults in Lebanon were starting or running a new business. However, due to various reasons, many Lebanese have to immigrate as mentioned earlier, taking away their skills and businesses with them. Unless of the economy rebounds quickly, this ongoing brain drain will unfortunately take away some of the country’s best and brightest, some of which could have the latest innovation in fintech. 500

KEY ORGANISATIONS Banque du Liban, Capital Market Authority, Insurance Control Commission, Investment Development Authority of Lebanon

Port Louis town, Capital of Mauritius

Beautiful aerial view of Beirut Kuwait Tower City Skyline glowing at night

KEY ORGANISATIONS Bank of Mauritius, Financial Services Commission (FSC), Mauritius Fintech Hub, Mauritius Economic Development Board, Insurers’Association of Mauritius

CAPITAL AND FINANCIAL HUB: Port Louis

KEY ECONOMIC DEVELOPMENT STRATEGY: Mauritius Vision 2030.

OVERVIEW Mauritius has transformed itself to be an upper-middle income country, boasting one of the highest GDP per capitas 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 is with other strategies, a focus on highly-skilled employment, infrastructure and digital are key components to help take the country to 2030.

Mauritians have a 155.25 per cent mobile penetration, as well as a 133.9 per cent internet penetration rate. Compared

to much of the rest of Africa, this internet penetration rate is quite high. 501

To note, Mauritius is also unique as many of its citizens are both French and English speaking, which helps it cater to much of the world. Generally in 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 investor friendly but also to comply with global standards.

The year started off on a positive note when the EU removed the country from its list of 'high-risk third countries' following measures by the government to improve its anti-money laundering (AML) and combatting the financing of terrorism (CFT). 502

The 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. 503

Its drive explains why much of its initiatives have been very much legislative based. For instance, Mauritius is among the first countries in East and Southern Africa to adopt rules on virtual assets and initial

INFOCUS MOROCCO 11

OVERVIEW Morocco has one of the highest rates of unbanked in the world at 71 per cent. 511. Moroccans tend to choose to pay with cash from an ATM that use a credit card, while Moroccans also trust traditional establishments like banks.

These figures present a challenge for fintech but also opportunities. 512 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. Mobile wallets for digital remittances are available, yet only one per cent of Moroccans utilised these services last year. 513

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 in order to keep up with the services offered by fintechs and

startups, as well as the 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 telecos 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).514

The pandemic helped accelerate digital transformation. E-commerce saw solid growth, as online transactions grew by 43 per cent. Infrastructure upgrades, such as the Electronic National Identity Card (CNIE), and government initiatives including regulatory changes in banking laws, have helped fintechs to grow, according to an August 2020 report by CGAP and EY. 515

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 COD declined significantly by 86 per cent. Cash usage decreased with 43 per cent of consumers that were 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

KEY ORGANISATIONS Bank Al-Magrib (The Central Bank of Morocco), Morocco Fintech Association, Supervisory Authority of Insurance and Social Welfare (ACAPS), Moroccan Capital Market Authority (MCMA), Maroclear, Moroccan Investment and Export Development Agency, Casablanca Finance City Authority

FINANCIAL HUB: Casablanca KEY ECONOMIC DEVELOPMENT STRATEGY: Maroc Digital 2020

token offerings – with the Virtual Asset and Initial Token Offerings Services Act 2021 coming into force in February. 504

From the Mauritius National Budget 2021-2022, there were a series of measures that were highlighted that would ultimately boost economic development and key ones pertaining to fintech and wider digital. This included setting up of an Open Lab by the Bank of Mauritius (BoM) for banking and payment solutions, in addition to the establishment of 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). 505

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. Further, various acts including the Declaration of Assets Act will be amended to cover virtual assets.'506 In September 2021, the FSC released 'the Financial Services (Crowdfunding) Rules' to improve access to finance for individuals in addition to entrepreneurs and SMEs operating in or from Mauritius. 507

The Mauritius fintech ecosystem got much attention in 2018 with

the establishment of the ‘Fintech and InnovationDriven Financial Services Regulatory Committee ’ for the expansion of Fintech in Mauritius. In the same year, the Mauritius African Fintech Hub (MAFH) was set up. 508 In 2016 it was an early adopter of MEA with regards to a regulatory sandbox by issuing the regulatory sandbox licence. 509

Accelerators, incubators and co-working hubs active in Mauritius include Mauritius African Fintech Hub, Co-Working Port Louis, The Group, Anglo African, and Verde. The 19 banks in the ecosystem include the likes of ABC Banking Corporation, AFRASIA, Century, Bank One, HSBC and Barclays. 510

FINTECH SUBSECTORS Subsectors in Mauritius in fintech

remittances, blockchain and cryptocurrencies, security and fintech tools.

surveyed have high levels of confidence in contactless cards. 516

According to the University of Cambridge Fintech Regulation in MENA, there is an ‘omnibus regulatory framework’ that governs the provision of international money transfer by mobile money providers. This permits them to undertake international remittances activity as part of their core mobile money business without a separate licence. Morocco is aslo planning an open banking framework. In terms of frameworks in place, it has a financial service industry data protection framework and a financial service industry cybersecurity framework in place. The country also has general consumer protection laws with a set of explicit provisions for financial services. 517

According to a International Fund for Agricultural Development report, Morocco currently has a perfect score of 100 in its

KEY ORGANISATIONS Central Bank of Nigeria, Securities and Exchange Commission of Nigeria, National Insurance Commission (NAICOM), Fintech Association of Nigeria, Nigerian Insurers Association, Nigerian Investment Promotion Commission

FINANCIAL HUB: Lagos

KEY ECONOMIC

DEVELOPMENT STRATEGY:

Nigeria Agenda 2050

OVERVIEW Lagos 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.

Nigeria is home to at least 200 fintechs, key stakeholders (banks, telecom companies and the government), enablers and funding partners. According to Frost and Sullivan, Nigeria’s fintech revenue is expected to reach $543.3million this year, a growth from $153.1million in 2017. 522

Nigeria’s sheer size, coupled with its relatively strong financial and tech ecosystem, presents opportunities for the West African nation. Such as insurance, where it has a very low penetration rate of just 0.4 per cent. Less than 30 per cent of adult Nigerians have or used financial services from non-banking institutions. In addition, 97 of Nigerians do not have health insurance, investments/wealth management and cross border payments. 523 Half of Nigeria’s population is under 19 years of age, and over 65 per cent are under 35 years old. 524

There are over 187 million mobile connections (90 per cent of its population); 10 to 20 per cent to the population have smartphones while the rest are using traditional mobile phones. Half the population has access to internet as well. 525, 526

The National Financial Inclusion Strategy of Nigeria missed its target of 70 per cent financial inclusion by 2020 but efforts continue. 527 In the first quarter this year, Nigeria raised the most VC funding in Africa at $600million. 528 Also, Nigeria’s first fintech unicorns were Interswitch and Jumia, with Flutterwave, OPay and Andela joining the club more recently. 529

Nigeria has introduced a digital central digital bank currency called the e-Naira. 530 While, the Central Bank of Nigeria (CBN) ordered all banks from stopping transacting in and with entities dealing in cryptocurrency. The CBN also directed banks to close

accounts of persons or entities that involved in cryptocurrency transactions. Reports highlighted that this was done for security and money-laundering clampdowns. 531

Despite this, cryptocurrencies are really popular in Nigeria. Many point out the 2016 economic recession in the country could have caused Nigerians to flock to digital currencies to protect their savings and assets. This change in behaviour propelled Nigeria to have the largest crypto market in Africa by 2019 and one of the largest userbases in the world. 532

Cryptocurrencies have remained popular despite the ban. A report by KuCoin in April showed that at least 33.4 milion Nigerians between aged 18 to 60 had invested in digital assets in the past six months. 533

According to GSMA 2018 findings, the CBN introduced a new type of banking licence: payment service banks (PSBs). This aimed to leverage the strengths of businesses, such as that of mobile network operators, while maintaining a bank-led rather than a telecoms-led banking model. 534 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. 535

Another potential solution which could play a strong role in the future of Nigeria’s financial ecosystem is BNPL, as only three per cent of Nigerians own a credit card (ranking 124th out of 137th globally). 536 Usage of BNPL last year was estimated at $325million in Nigeria; it is projected to hit $1.195billion by 2028.

Last year, the Nigeria Startup Bill project kicked off to “harmonise all pieces of legislation governing startups and contributing to the creation of an enabling environment for growth, attraction and protection of investment in tech start-ups.”537 Nigeria now ranks the highest globally for real time and digital payments. 538

FINTECH SUBSECTORS

Payments – 28 per cent (total)

Lending – 25 per cent

Software solutions – 15 per cent

Wealthtech – 11 per cent

Blockchain – nine per cent

Insurtech – four per cent

Financial management – three per cent 539 540

CAPITAL AND FINANCIAL HUB: Muscat

KEY ECONOMIC DEVELOPMENT STRATEGY: Oman Vision 2040

OVERVIEW Known as the Oman Vision 2040, Oman aims to be diversified and have a sustainable economy based on technology, knowledge and innovation; operating within integrated frameworks; ensuring competitiveness; embracing industrial revolutions and achieving fiscal sustainability.

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.

Out of the country’s population of over five million people, 95.2 per cent of its population have mobile connections. Also, over 95 per cent of the population are internet users. 541

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 or expat population – which is estimated to be at least 1.7 million people. 542

Oman is taking a legislative-led approach to building its fintech ecosystem. Recently, the Central Bank of Oman (CBO) confirmed that open banking is currently being worked on to help modernise the country’s banking industry. 543 The Open Banking API Strategy comprises of various initiatives to mature the ecosystem such as: regulation in fintech, regulatory sandbox, release of a cloud computing framework for the financial and banking sector, initiatives to boost electronic know-your-customers (eKYC), virtual asses and fintech education. 544

As reported last year, 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. 545

In November last year, Oman and Saudi Arabia signed a memorandum of understanding (MoU)546 and launched the Saudi-Omani Digital Skills Initiative; this will include training programmes in fields such as fintech, data and AI. 547

A report from KPMG found Omani banks are also planning to invest heavily in technology to modernise; this is where fintechs can play a role with those banks as partners. 548 Some of the country’s banks include the likes of Bank Muscat, Bank Dhofar, National Bank of Oman and Bank Sohar.

Similar to its neighbours, as part of its national strategy Oman is also trying to boost entrepreneurship, in particular with its local population. This is why more accelerators, incubators and wider training programmes will be essential for the Sultanate.

Last year, Omani telco Omantel launched an Innovation Lab to harness the company’s expertise, partnerships and outreach for cultivating the tech-based startup ecosystem in Oman. 549 Also, Omantel has the Omantel Accelerator, which is a six-month programme for technology startups run in partnership with the Oman Technology Fund (OTF) and Brinc. The five focus areas will be 5G, internet of things (IoT), cybersecurity, customer experience and big data.

The OTF will effectively work on attracting these types of promising projects to launch its operations in Oman to enhance the knowledge-based economy, and to develop the ICT sector in general. Some of their initiatives – including the examples mentioned earlier – include OTF Techween, a three-month pre-seed fund programme, and OTF Wadi Accelerator, a programme allowing for improved probabilities of a startup’s success, both by making investments into a company and by receiving support through experienced entrepreneurs that act as mentor. 550

KEY

QATAR 14

KEY

ORGANISATIONS Qatar Central Bank (QCB), Qatar Financial Centre (QFC), Qatar Fintech Hub (QFTH), Qatar Financial Markets Authority (QFMA), Investment Promotion Agency of Qatar, Qatar Development Bank (QDB)

CAPITAL AND FINANCIAL HUB: Doha

KEY ECONOMIC DEVELOPMENT STRATEGY: Qatar Vision 2030

OVERVIEW Qatar is one of the wealthiest countries in the world, boasting a strong and developed economy. It has the highest per capita in the entire MEA region and one of the highest in the world. That being said, Qatar is undergoing economic development and diversification – guided by the Qatar National Vision 2030. The abundance of natural resources within the country, in particular natural gas, has allowed it to be one of the richest countries in the world, but it must invest heavily in economic diversification, improving its fintech sector and allowing for greater digitisation.

In terms of financial services, Qatar has a mature financial services sector that includes 18 commercial banks, six conventional banks, four Islamic banks, seven branches of foreign banks, and a specialised development bank that finances SMEs. Commercial banking in Qatar dates to the mid-20th century, with Qatar National Bank (QNB) which was established in 1965, being the largest bank in the entire MEA region in terms of assets. 553

INFOCUS RWANDA 15

CAPITAL AND FINANCIAL HUB:

KEY ECONOMIC DEVELOPMENT STRATEGY:

Rwanda Vision 2050

OVERVIEW Rwanda has made significant social and economic strides forward in its timeline, from a country once weighed down by civil war to now being described as the ‘Switzerland of Africa’. Its recovery efforts have orientated largely around accommodating economic and political stability that is both business-friendly for locals and for FDI. The Rwanda Vision 2050

A clear example of Qatar’s financial services success is the Qatar Financial Centre (QFC): a one-stop-shop for all things finance, from licensing to other corporate services. It is expected to have 1,000 companies registered there by the end of 2022. In 2019 over 800 fintechs, IT, tax and investment consulting firms were part of QFC. 554

In terms of fintech, Qatar’s journey started back in 2017 with a Qatar Fintech task force that included various players from the ecosystem. By the following year, it planned to establish a Qatar Central Bank (QCB) fintech taskforce, a regulatory operating model and a centralised know-your-customer (KYC) utility. Importantly, a Shariacompliant fintech framework and regulations were developed. 555

By 2019, a fintech strategy was announced as well as an established investment promotion agency (IPA) and various other incentives to attract foreign direct investment (FDI). It also saw the launch of the Qatar Fintech Hub (QFTH), rolling out four waves of the first-ever specialised fintech incubator and accelerator programmes in Qatar. Through incubating and accelerating growth of both domestic fintech startups and international ones, the aim of QFTH is to further foster the growth of the fintech ecosystem. 556

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. According to the From Qatar to the World: A report on the state of FinTech in Qatar by QFTH, the four areas in focus are payments, regtech, Islamic finance and SMEs. 557, 558

defines this wider economic development strategy. There is a focus on improving the standard of living and alleviating poverty when compared to the GCC region for example, where there it is more on diversifying the economy and being less reliant on oil and gas.

A noticeable milestone of 2050 is that it targets Rwanda to be a ‘globally competitive knowledge-based economy’. By 2050, Rwanda aspires to be a high-income country with digital technology playing a strong role in achieving that.

Over 80 per cent of Rwandan households are mobile subscribers, with less than 15 per cent owning smartphones. The use of digital financial services by adults is estimated at 46 per cent. Adoption of fintech remains to be a challenge though as there was a study that almost 90 per cent in one recent study prefer to use cash. 565 Despite this preference, the pandemic saw digital play a vital role in Rwanda.

KEY ORGANISATIONS National Bank of Rwanda, Rwanda Fintech Association, Rwanda Development Board, Capital Market Authority, Kigali International Financial Centre.

Kigali

An example of a collaboration highlighted in the report is Ahlibank and Visa. The companies will jointly launch card-based payment products and create advanced technology solutions to bolster the payment experience for Ahlibank customers. Other examples include CWallet and Microsoft Qatar partnering to digitally transform thousands of organisations by equipping businesses with the latest tools to ensure safe and secure digital payment. 559

QNB has become the country’s first bank to introduce its own open banking platform. Leveraging its API infrastructure, the bank will allow both its customers and partners to access its core banking systems. 560 Qatar has soft-launched its regulatory sandbox and is planning to have a full launch in the near future. In addition, there have been discussions about a potential digital currency in the future as well. 561

The country recently hosted a cashless FIFA World Cup, garnering huge global attention as it was the first time the region has hosted

the football tournament.

In addition to having a newly launched smart city programme (TASMU), the# further push to digital adoption is clear.

Finally, the summer of 2022 also saw Qatar’s Ministry of Communications and Information Technology and Meta sign a cooperation agreement, whereby the companies will work together to help SMEs in Qatar with digital transformation. 562 Estimations by Global Data suggest that Qatar’s ICT spending will reach $9billion by 2024. The Qatari government’s $200billion investment programme shows its commitment to investing in technology and also attracting FDI and international talent. 563, 564

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

Mobile money is popular in the country. MTN introduced mobile money in Rwanda in 2010, followed by Tigo a year later and Airtel in 2013. At present, financial services are most commonly accessed through SACCOs and mobile money platforms.566

Banks represent nearly two-thirds, followed by pensions, insurance and microfinance. Banks in Rwanda include Commercial Bank of Rwanda, Access Bank Rwanda, Bank of Kigali and Banque Populaire du Rwanda SA (BPR). The launch of the Startup Act Rwanda is expected later this year. 567

Earlier this year, the Rwandan government partnered with Co-creation Hub (CcHUB), Google and Mojaloop Foundation to launch the Fintech Innovation Project. As part of the initiative, Nigeria-based CcHUB will support early-stage fintechs and innovators with an incubation programme. 568

The first and only fintech-focused Africa Fund was launched by The Kigali International Financial Centre (KIFC). Valued at $50million and backed by MyGrowthFund Venture Partners, the fund hopes to facilitate homeland investment. The fund domiciled in KIFC will create proximity on the continent between investments and fintech investment opportunities and is set to increase investment in African fintech by African firms. The fund’s objective is to grow by 140 per cent. 569 Also, as highlighted in the GSMA State of the Industry Report on Mobile Money 2022, MTN is designing a digital input credit product for farmers in partnership

with NCBA, which is 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. 570

The Ministry of ICT

Lagos Island, Nigeria at sunset

The Hassan II Mosque in Casablanca, Morocco The corniche in Muscat, Oman

highlights the objectives of implementing an open banking framework, in addition to the expected positive impacts it would have on the Kingdom’s financial sector.” It is planned for SAMA to go live with open banking sometime this year. 578

OVERVIEW

The Kingdom of Saudi Arabia is undergoing massive economic development transformations that are centred around its national economic development strategy, Saudi Vision 2030. This has seen a prioritisation on 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 have a strong financial services sector and one that is both modern and innovative. 574 As part of its economic development, this saw the creation of the catalyst Fintech Saudi, launched in 2018 by the Saudi Central Bank (SAMA) to boost the growth and maturity of the Kingdom’s fintech market. It is not just growing the Saudi fintech system and furthering the digitalisation of financial services, but also accelerating financial inclusion for both the local unbanked and underbanked.

SAMA and various other entities, in partnership with the G20 Global Partnership for Financial Inclusion (GPFI) and the World Bank Group, identified that the youth, women and SMEs are the three groups that require all-in assistance and support to embitter financial inclusion via digital and other regulatory incentives. 575

Just this summer, the FSDP launched the Fintech Strategy Implementation Plan, which will aim to further 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 just financial services – such as retail, hospitality, real estate, healthcare, transportation and investment. 576 The Kingdom plans to triple the number of fintechs it has by 2025 to 230 fintechs, and plans to increase digital transactions of all financial dealings to 70 per cent within the next three years. Also, it aims for fintech to contribute to 4.5 billion SAR ($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. 577

Last January, SAMA announced it was developing its open banking initiative and services. According to the Fintech Saudi 2020-21 Annual Report, “the open banking policy issued by SAMA

In December last year, SAMA announced the launch of the first version of the open data platform. This step comes as part of SAMA‘s commitment to providing accurate and up-to-date information and data for specialists and stakeholders about economic, financial and monetary statistics and indicators of the Kingdom.579

Between January and August last year, Saudi Arabia saw 16 venture investments in fintech with a total deal value of $157.2million, a significant increase from 2020 with $7.8million and 2019 with venture investments totalling $18million. 580 The Kingdom announced over $6.4billion in investments in future technologies and entrepreneurship earlier this year at the inaugural LEAP conference in Riyadh, which will further sector them to have the largest digital economy in the MENA region. They include Aramco Venture’s Posperity7 Fund with $1billion, and another $1billion from NEOM Tech & Digital Company with a focus on future technologies. Telecom giant stc announced MENA HUB, a $1billion investment in regional connectivity and infrastructure, which will support Saudi Arabia’s rapidly expanding digital and cloud sector. Also, the launch of the world’s first cognitive metaverse, XVRS, was announced that will serve residents and visitors of the smart giga-project. 581

Saudi Arabia has the highest adoption of contactless payments through Near-Field Communication (NFC) with 94 per cent, the highest in MENA region, above the EU average, and ahead of Hong Kong and Canada. 582

KEY ORGANISATIONS Central Bank of the West African States (BCEAO), Agency for Investment Promotion and Major Projects (APIX), Senegalese Information Technology Association (SITSA)

CAPITAL AND FINANCIAL HUB: Dakar

KEY ECONOMIC DEVELOPMENT STRATEGY: Senegal Vision 2035

OVERVIEW Senegal’s ambitions are represented by one vision – an emerging Senegal in 2035, with a cohesive society under the rule of law. The Senegalese government’s strategic guidelines that direct the initiatives needed for translating this vision into tangible actions and results for the benefit of population, are based on three priorities aimed at: bringing about a structural transformation of the economy, promoting human capital and enabling good governance.

Becoming a major Francophone hub in the African continent, Senegal wants to do that with the wider tech and digital sector. By 2025, it aims to create 35,000 new jobs in the field of technology.585 Mobile phone usage in Senegal has surpassed more than 60 per cent this year. In terms of traditional finance usage, Senegal only had seven per cent of its population use it.

Like across much of MEA, the rural population is at a disadvantage here. For instance, with traditional financial institutions, almost two-third (63 per cent) 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.586 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. 587

Senegal last year made headlines when the first African Francophone fintech achieved unicorn status. Wave Digital Finance, founded in 2018, raised $200million from four big Silicon Valley venture capital firms, pushing its valuation to $1.7billion. Prior to this, the ecosystem – home to around 70 startups – had only raised around $26million in the whole of last year.588 In the case of Wave, it shows just how popular mobile money has become in the African continent and has expanded beyond just East Africa. 589

This year, Wave has been granted an e-money licence by the Central Bank of West African States (BCEAO), a central bank serving the eight Francophone West African countries – Benin, Guinea Bissau, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal and Togo – that form the West African Economic and Monetary Union (WAEMU). 590

Mobile money usage in Senegal is high. 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 per cent 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. 591 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, Senegal, similar to Kenya, has a near universal awareness in the country. Its popularity and availability have made millions of people gain access to financial services they otherwise would have been excluded.592 To note, there were 113.95 mobile subscriptions registered for every 100 people in 2020.593

Despite the positive announcements like the Startup Act in Senegal, there still is little progress with respect to fintech regulation and definitions of it. There really isn’t a specific regulator for fintech businesses. 594 For the sector to further progress in the country more needs to be done in the space. This includes the likes of a regulatory sandbox and clearer guidelines on fintech as well as more diverse licences of different fintech subsectors. 595 Also, previous projects that didn’t work out, such as the eCFA, the digital version of the CFA Francs national currency, is still top of mind in the country. 596

There was also headlines when singer Akon, who has roots in Senegal, outlined plans to set up a crypto-style Akon City. There is also Nourou, who founded Bitcoin Senegal end of last year. 597

In April this year the BCEAO announced the creation of its fintech bureau. Dubbed BCSF, the department will promote and support the development of startups offering financial services in West Africa. BCSF will organise discussions between the central bank and fintech startups, ‘collect and process information or interview requests’ and handle other tasks ‘related to technological innovation and financial sector regulation'. 598

FINTECH SUBSECTORS

– 42 per cent

The Kigali skyline Business District, Rwanda The skyline of Doha city centre after sunset, Qatar

King Abdullah Financial District in the city of Riyadh, Saudi Arabia

SOUTH AFRICA 18

KEY ORGANISATIONS South African Reserve Bank, Financial Sector Conduct Authority (FSCA), Payments Association of South Africa (PASA), South African Insurance Association (SAIA), Insurance Institute of South Africa (IISA), Fintech Association of South Africa, The Banking Association South Africa (BASA)

financial institutions. While in Cape Town, the city accounts for 75 per cent of the country’s venture capital deals. Of the more than 500 entrepreneurial companies in Cape Town’s tech sector, around 20 per cent are in e-commerce and SaaS while 15 per cent are in fintech.

CAPITAL

AND FINANCIAL HUB: Johannesburg and Cape Town Capitals: Cape Town, Pretoria and Bloemfontein

KEY ECONOMIC DEVELOPMENT STRATEGY: National Development Plan 2030

OVERVIEW South Africa is historically a major trade and investment commercial hub for the African continent to do business globally. The largest city in South Africa by population, Johannesburg, is home to some of Africa’s leading banks and

South Africa is unique compared to the rest of Africa as it has a pretty high banked population as well as one that is insured. This is a stark contrast compared to its fellow African neighbours. The majority of South Africans (67 per cent) have a bank account. South Africa, according to McKinsey, has over 80 per cent of premiums from the entire African continent. In fact, it has one of the world’s highest penetration rates of insurance. 601

Similarly, unique to South Africa is not only the high rate of mobile penetration but the high rate of smartphones in the country.602 For instance, 95 per cent of South Africans now have a mobile phone. In addition, which is what distinguishes it from much of sub-Saharan Africa,

TANZANIA 19

KEY

INFOCUS

OVERVIEW Tanzania’s fintech landscape has grown and changed positively due to regulatory reforms in the payment sector launch of government policies and initiatives focusing on ICT. This was evident in 2015, when the Tanzanian government established the ICT Commission. Also, the government has an MoU with ecosystem facilitator Financial Sector Deepening Trust (FSDT).614

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. 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.615

As of last year, there are currently six mobile network operators in Tanzania, with many partnering with financial service providers

sandbox that enable peer-to-peer (P2P) payments via mobile wallets and digital banking services.616 Some of these players include M-Pesa from Safaricom, Tigo Pesa from Tigo, and Airtel Money.

In July last year, the country introduced a new tax on mobile money transfer and withdrawal transactions. This levy is in addition to their VAT of 18 per cent and excise duty on mobile money transfer and withdrawal fees of 10 per cent.

GSMA analysis stated that until June 2021 taxes on mobile money fees were 23 per cent of total transfer costs but by July and August last year that became 60 per cent. This saw dramatic declines in transactions from June to September last year such as with P2P transactions that went down 38 per cent. However, by the end of the year mobile money appeared to have recovered and increased again. Nonetheless, it is estimated that the market contracted 12 per cent as a result of this and the future growth will be less than prelevy.617 It could present a problem, if too expensive, as people in Tanzania may resort to cash again, which would ruin digital gains. Another problem has been the lack of regulations, including its lack of a regulatory sandbox. A further challenge for startups and fintechs has been a lack of funding and/or mentorship. For the estimated 33 fintechs in the country, only 36 per cent of them have managed to secure seed funding or growth financing, while 35 per cent are bootstrapping via friends and family members.618 Nevertheless, it appears more is happening and the ecosystem is

KEY ORGANISATIONS Bank of Tanzania, Capital Market and Securities Authority, Tanzania Insurance Regulatory Authority, Tanzania Startup Association, Tanzania Investment Centre

CAPITAL AND FINANCIAL HUB: Dar es Salaam

ECONOMIC DEVELOPMENT STRATEGY: Tanzania Development Vision 2025

While previous attempts at launching mobile money platforms in South Africa failed, owing to a 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 superapps in an attempt to disrupt the traditional financial systems. 604

One reason why mobile money hasn’t been as successful in South Africa has been the regulations behind it. South African regulations require a merchant to have a specific financial services provider licence. In East Africa like Kenya and Tanzania, they don’t have regulations like this and therefore, the growth of their mobile money usage has skyrocketed. Whereas internet and mobile banking uptake has been impressive in the local market, mobile money services have struggled to make a tangible impact in South Africa. 605

In terms of VC funding this year, in the first quarter of this year, South Africa was the third highest in Africa – after Nigeria and Kenya and leading Egypt as mentioned before. 606

To note, South Africa tracks well from a funding perspective. From January 2015 till May 2022, a total of 357 individual South African tech startups raised a combined shy of $1billion ($993,684,600), a figure topped only by Nigeria over that time.

Funding, both in terms of the number of startups backed and the total tally secured, has generally increased year on year, most

especially in the last three years, and this year proves to show that the country will have another record-breaking year. 607

As mentioned before, BNPL is expected to grow almost 100 per cent (97.5) to reach over $450million by the end of the year in South Africa. 608 Some of the biggest players include the likes of Payflex, which Australian BNPL Zip took a 25 per cent stake. 609

However, there remains challenges. Last October, only 44,912 SMEs sent a financing request to commercial banks, representing two per cent of all South African SMEs, and almost 40 per cent of these requests were still in process.610 Cryptocurrencies are also popular in the country. 611

FINTECH SUBSECTORS

Payments – 28 per cent

Lending – 21 per cent

Investech – 19 per cent

Insurtech – 10 per cent

Blockchain – 10 per cent

Financial management – four per cent

Other – eight per cent 612 613

further advancing. At the end of last year, the Bank of Tanzania announced it was developing a central bank digital currency.619

Despite the fintech ecosystem being more infant than other MEA peers, there have been organic successes. Earlier this year, it was announced that Tanzanian fintech NALA, a cross-border payments company, was able to raise $10million seed. 620

Tanzania has been one of the African continent’s fastest growing economies, with a seven per cent average annual growth in its national GDP since 2000.621 It is also one of the top 10 largest countries in Africa by population, showing that its transition from a low-middle to a middle-income economy will present opportunities and inclusion for all. The country has been playing catching up in fintech and it will be important for the growth of the ecosystem that further incentives and initiatives for fintech take place, as well as

ORGANISATIONS

ambitions are there. Also, the Tunisian market in the same source highlights that the market is too heavily regulated, which can deter further startups and other innovations to thrive.628

CAPITAL AND FINANCIAL HUB: Tunis

KEY ECONOMIC DEVELOPMENT STRATEGY: Digital Tunisia 2020

OVERVIEW

This Francophone, Arab and North African country is relatively stable compared to its neighbours. Despite having its own challenges, from economic to political to security, the country continues to move forward with tech playing a big part.

The government has been proactive in developing a wider startup and digital infrastructure where entrepreneurship is able to take shape. This includes a Digital Tunisia 2020 strategy that has prioritised digital transformation as a key driver to the country’s economic development. It was the first African country to pass a Startup Act in April 2018, providing the following:

■ Legal framework to simplify the startup launching process ■ €200million fund for specific verticals ■ Strategy to consolidate the ecosystem and hubs in Tunisia

320 have so received access to the benefits from the Act.624 The Banque Centrale du Tunisie (or Central Bank of Tunisia) in 2020 announced the launch of the regulatory sandbox. It has also established a a fintech committee, a technological hub.625

The Global Entrepreneurship and Development Institute (GEDI), ranked Tunisia first in Africa, sixth in the MENA region, and 40th globally.626 This has been attributed with 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, this grew to $14million in 2020, $23million last year and already $104million this year up until May.627

According to a study on Tunisia’s fintech ecosystem, the country hopes to become a pioneer by implanting the blockchain in the TCB, digital payment, and cryptocurrencies – which was according to the declarations of the governor of the TCB.

Much will be seen on whether this can happen but the

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.629 Also, eight per cent of its population had a credit card, which is lower than the MEA average of 12 per cent.630

An interesting observance 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 are 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.631

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 is an internet user. 632 Also, with its figures of internet higher than MEA’s, it is worth nothing it has a smartphone penetration of 66 per cent as well. 633

Despite this, Tunisia remains a mainly cash-based society. Mobile money only has a two per cent penetration in the country.634 It will present challenges whereby adoption of technology such as fintech would help change the 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.635

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.

For example, Arab Tunisian Bank (ATB), a mid-sized bank who’s parent company is the Arab Bank Group, has gone live with Temenos core banking system this year. The project first began in 2019 with ATB signing for a broad range of front-toback office solutions from the banking tech vendor and later this year phased into this launch. 636, 637

KEY

Banque Centrale de Tunisie - Central Bank of Tunisia (BCT), Conseil du Marché Financier, Startup Tunisia, Entrepreneurs of Tunisia, Tunisia Investment Authority, FintechTunisia

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

TÜRKIYE (TURKEY) 21

KEY ORGANISATIONS The Central Bank of the Republic of Türkiye, Investment Office of Türkiye, FINTR, Capital Markets Board of Türkiye, Insurance Association of Türkiye, Revenue Administration, Financial Crimes Investigation Board, Payment and Electronic Money Institutions Association, Istanbul Financial Centre

FINANCIAL HUB: Istanbul

KEY ECONOMIC DEVELOPMENT STRATEGY: Vision 2023

OVERVIEW Turkey is a high-middle economy that has a large population and Istanbul is a major financial centre in MEA. Its unique historical and cultural bridge between Europe, the Middle East and Asia puts the country in a favourable position with respect to economic growth. It has been experiencing an ongoing currency and debt crisis over the past few years. The Turkish lira lost nearly a

quarter of its value this year due to soaring inflation and the reluctance of the Central Bank of the Republic of Türkiye to raise interest rates.638

The decline of the Turkish lira has seen crypto grow in popularity. According to Chainalysis‘ 2021 Geography of Cryptocurrency Report, Turkey was the second highest ranked country in the Middle East. In transaction volume Turkey led the Middle East at over $130billion. 639

Over this summer, it was reported that the Turkish government is crafting legislation to establish greater control over cryptocurrency, which could include imposing a ‘crypto tax'.640 It came as the country saw collapses of cryptocurrency exchanges like Vebitcoin and Thodex, with the Central Bank banning the use of digital assets for payments. Oversight and regulation could help protect consumers.641

According to mondaq, fintech regulations in Turkey for the most part are harmonised with EU regulations (e.g the Payment Law is the equivalent of the First Payment Services Directive (FPSD)). However, it is

INFOCUS

aggregators who provide mobile wallets, telecoms who provide mobile money platform, and bankers providing exco account services or mobile wallet solutions. They all together serve utilities, bank-to-consumer, e-commerce and end-user retail payments. Uganda also has a growing number of mobile and digital wallet providers that are keen on tapping into the payments' subsector. 651

Fintech has been growing in the country and has played a growing role in various aspects of people’s lives. Having been to the country this year, I’ve seen this first-hand, in particular with payments solutions. This is a country where much is centred around USSD to cater to its population not having smartphones (only 16 per cent of Ugandans have a smartphone). Mobile penetration in Uganda is at 49 per cent. The country’s digital economy contribution is around seven per cent of its GDP, which is higher than South Africa at three per cent.650

OVERVIEW

The Financial Technologies Service Providers Association (FITSPA),an independent, non-profit, membership organisation founded in 2017 in partnership with the Financial Sector Deepening Uganda (FSDU), represents Uganda’s local fintech community and global fintech institutions operating in the country. It had 160 members at the end of 2021.

First, with regards to payments, mobile money in particular dominates the ecoystem; players in the country are typically

Second, with regards to savings & lending from the report, fintechs dominate in niche markets, such as asset lending, solar, agro-business, micro-loans and savings. Fintechs have capitalised on their understanding of the traditional Ugandan SACCOs and microfinance structures to offer digital transformation solutions.

Third, e-commerce grew and this further accelerated during the pandemic. As Uganda had one of the world’s longest lockdowns; the Deloitte report saw Ugandan players like Safeboda and Jumia grow, in addition to new entrants like Glovo. The disparity of its popularity is still evident with its reliance on internet, whereby Kampala has a higher smartphone usage compared to the rest of the country.

Fourth, with respect to remittances, mobile money helped the unbanked in the country with fintechs like Airtel Money, MTN Mobile Money, Eversend and others enhancing inter- connectivity between financial institutions, businesses and the end-consumer via mobile and digital wallets. According to the source652, mobile money penetration has grown at a fast pace with over 30 million registered customers and transaction value of Ugandan Shillings UGX 79.8

not yet aligned with the Second Payment Services Directive.642

There are 520 fintechs and 56 accredited payment and emoney 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. 643

According to the Finance Office of the Presidency of the Republic of Türkiye website, “[They] consider making Türkiye to be one of the most important and prominent countries in the field of fintech as one of the most important goal of the Office.”644 There are almost 83 million credit cards in the country, putting it seventh globally for credit card use and ninth globally for number of credit card transactions. The are seven million POS devices (48 per cent in-store contactless payments) and over 70 million active online banking customers.

The country 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 also 82 incubation centres. As of November last year, the country has nine angel investor network and the government-sponsored angel accreditation programme now has 674 angel investors. 645

Despite not producing a single unicorn by 2020, it has now produced six, including gametech Dream Games.646 Istanbul's success is reflected in Startup Genome‘s 2021 report comparing global startup ecosystems with the city ranking 15th among the top 100.647

In terms of regulations, besides the potential crypto legislation, the

pandemic helped bring regulations for banking digitalisation that enabled digital onboarding, QR code standarisation and also digital signing of contracts. Last year, the Digital Turkish Lira Cooperation launched, a definition for banking-as-a-service/digital banking was created, the Association of Payment and Electronic Money Institutions of Türkiye was established and the secondary regulation for payment services was renewed.648

FINTECH SUBSECTORS (Out of 520 fintechs)

■ Payments – 216 fintechs ■ Banking – 70 ■ Blockchain and crypto - 64 ■ Insurance – 58 ■ Corporate finance 54 ■ Financing – 40 ■ Trading, investing – 27 ■ Scoring, identity, fraud – 25 ■ Crowdfunding – 15 ■ Personal finance management 14 ■ Money transfer – 13

■ Wealth management – 8 649

OVERALL FINTECH HUB STATUS: ONES TO WATCH – TIER-TWO (HIGHER-END) CATEGORY

trillion ($21billion) in 2020 compared to 0.6 million customers and transactions worth UGX 133 billion ($36million) in 2015. As many Ugandans work abroad and send much of their money back home, it is why mobile money is dominating remittances in the country.

Finally, regulations has shifted from more 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 the payment systems in the country and deployed fintech licences and sandboxes to help promote innovation and to regulate it.

It's interesting to see fintechs in Uganda spread their know-how. For example, fintech Service Cops has entered into a partnership with Awash Bank in Ethiopia to support its digital strategy.653

ECOSYSTEMS

's report Study on The State of Uganda’s Fintech Industry by Deloitte discovered that the country’s fintech composition was around:

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), Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), DFIC Fintech Hive, Hub 71, Dubai FDI, Abu Dhabi Investment Office (ADIO), UAE Insurance Authority, UAE Securities & Commodities Authority, MENA Fintech Association, Dubai Multi Commodities Centre (DMCC), Emirates Development Bank, Ministry of Artificial Intelligence

KEY FINANCIAL HUBS: Dubai and Abu Dhabi (also capital)

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

OVERVIEW Beyond just fintech, the country successfully hosted the pandemic delayed Expo 2020 in Dubai from 1 October 2021 to 31 March 2022. Various delegations and initiatives promoted not only the fintech sector but the digital economy as a whole, balancing both for the public and also business-oriented activities.

The UAE is leading the region’s fintech market, reaching a record-high of $2.5billion by the end of this year. 655 It is expected to grow at least 12 per cent up until 2026. 656 The UAE is very advanced and connected; its population is over 10 million people. Its internet penetration is 99 per cent of its total population while there were 17 million mobile connections in the country beginning this year. 657 Also, 85 per cent of the population is financially included with at least access to one formal financial service. 658

In the UAE alone, non-cash payments are expected to account for 73 per cent of transaction volume by 2023 (compared to 39 per cent in 2018) and are growing strongly across all payment types (B2B, B2C, B2G etc.) – according to a report from the MENA Fintech Association in its first volume of the SHIFT report from this year. 659

DUBAI AND ABU DHABI The UAE is home to key financial hubs and also growing fintech hubs in the MEA region and beyond.

In Dubai, the UAE’s commercial hub, the crown jewel of its financial sector hub and wider fintech hub is centred around the Dubai International Financial Centre (DIFC). DIFC is a leading global financial centre in the MEASA region with a vision to drive the future of finance. It is in fact the only one from MEASA in the world’s top 10 leading financial centres.

ever-expanding DIFC Fintech Hive, the first and largest financial technology accelerator in the Middle East, Africa and

South Asia (MEASA) region, is estimated to have over half of the Middle East and North Africa’s (MENA) fintechs. It has a highly competitive fintech accelerator programme, called DIFC FinTech Hive Accelerator Programme and recently launched the region’s first Open Finance Lab this summer. It is a six-month programme that will have a total of four banks and a fintech company scheduled to participate in the programme, including Commercial Bank of Dubai, First Abu Dhabi Bank, Mashreq Bank, National Bank of Ras Al-Khaimah and Zand.

The capital of the UAE, Abu Dhabi is the largest of the seven emirates that make up the UAE by land size. Abu Dhabi has been building its financial services ecosystem which, of course, fintech plays a large role. The clearest example of its growing reputation as a hub in the region and beyond is Abu Dhabi Global Market (ADGM), the city’s international financial centre and free zone.660 ADGM is also home to Hub71, a global tech ecosystem.661

A unique announcement was Dubai announcing its Dubai Metaverse Strategy, whereby the city aims to be the world’s top 10 metaverse economy and a global hub of it as well, also attracting more than 1,000 companies in the fields of blockchain and metaverse, as well as supporting more than 40,000 virtual jobs by 2030. 662 It not only complements its wider economic development strategies – both as a nation and also Emirates wide in Abu Dhabi and Dubai – but also verticals pertaining to the wider digital transformation of the country – including the likes of blockchain, smart cities and artificial intelligence to name a few. Note, the UAE is the first country in the world to have a Minister for AI. All of this will help further boost the wider digital ecosystem and see fintech further intensify and thrive.

FINTECH SUBSECTORS

In terms of the subsectors of fintech, from a sample of 136 fintechs the following were:

■ Payments, ewallets and remittances – 39 per cent

■ Insuretech – 11.76 per cent

■ Lending – 8.08 cent

■ Blockchain/crypto – 7.35 per cent

■ Wealthtech – 6.6 per cent

■ Digital and neobanks – 5.88 per cent 663

Kampala, along Kampala-Jinja Road, Uganda

The Burj Khalifa in Downtown Dubai, UAE

Panoramic view from Sapphire Tower in Istanbul, Turkey

Chapter three: Summary

This summarisation of key fintech hubs plays a part of this 2022 report and hopefully gives the reader a high-level baseline to identify which countries in MEA are the key fintech hubs that factor in holistically its wider economic development, tech and digital, and fintech-specific indicators.

Chapter Four will look at the future of fintech in the MEA region.

Chapter Four:

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

The final chapter of this report takes a look at the future direction of fintech – specifically the approach to partnerships, followed by our top 10 predictions for the region, as well as a strategic framework for the future of fintech in MEA, before ending with an overall summary.

TO PARTNER, GO AT IT ALONE OR M&A

The rise of financial technologies has disrupted the global economy, especially traditional financial services. In MEA, this presents a partnership question not just for fintechs and those in financial services, but even other parties such as telecommunication companies and firms beyond the financial industry.

According to research from Cornerstone Advisors, in 2019 almost half (49 per cent) of global institutions said that fintech partnerships were ‘important’ (21 per cent said ‘very important’ while 28 per cent said ‘somewhat important’). However, by the end of last year that

figure had ballooned to 89 per cent overall (48 per cent very important and 41 per cent somewhat important). In fact, the past three years have seen 65 per cent of banks and credit unions entering into partnership with at least one fintech.664 In terms of why institutions look to partner with fintechs, increasing loan volume and loan productivity was the most frequently cited objective, followed by new product development. Financial institutions in MEA are progressing in various ways – they create their own solutions, they turn to partnerships and/or they look for mergers and acquisitions (M&As).

In terms of M&As, it is typically financial institutions investing and/or taking a stake in fintechs. For example, UAE financial institution Mashreq took a stake in NymCard, currently the only banking-as-a-service (Baas) provider in the Middle East, to help grow the booming fintech ecosystem in the UAE. This investment is part of a fintech fund that Mashreq created to further its ongoing strategy to support the fintech ecosystem in the UAE, fostering innovation

through collaborations, with an aim to deliver a seamless and superior customer experience. It will enable fintechs, large and small, to launch their business propositions with a payment card functionality through NymCard’s modern open APIs.665

Last year, we saw Western Union complete its acquisition of a minority share in stc Bank (formally stc pay) in Saudi Arabia.666 By the end of 2020, digital revenues for Western Union increased 45 per cent year-over-year, representing nearly a quarter of Western Union’s consumer business, and trended at an annual rate of over $900million. Prior to the investment, Western Union and stc pay were already partnering, providing money transfer services that allow stc pay’s users to send money from its app to 200+ countries and territories in 130+ currencies through Western Union’s extensive global network of accounts, wallets, cards and retail.667 Visa and Mastercard, as highlighted earlier in this report, have also partnered and/or invested in fintechs in MEA. For example, Visa

supported Sudanese fintech Bloom in a $6.5million funding round alongside Y Combinator and GFC668. We’ve also seen fintechs invest in other fintechs, such as UK-headquartered Checkout.com leading a funding round for Saudi Arabia’s BNPL Tamara.

Financial institutions doing it themselves – through M&As or creating from scratch – include Liv bank from Emirates NBD, Pepper from Bank Leumi, Mashreq Neo from Mashreq Bank, ila Bank from Bahrain–headquartered Arab Banking Corporation (Bank ABC) and also First Abu Dhabi Bank‘s Magnati.

Nonetheless, partnerships with fintechs and other digital solutions seem to be a popular way forward. The list includes the likes of Mastercard this year partnering with One Global and i2c to provide tailored financial solutions that will enable the issuance of digital mobile wallets in the region, as well as with Saudi-Arabian based HyperPay, an e-commerce payments services provider in MENA, to drive the adoption of digital payment solutions across the region.669

We’ve also seen fintechs invest in other fintechs, such as UKheadquartered Checkout.com leading a funding round for Saudi Arabia’s BNPL Tamara.

Financial institutions doing it themselves – through M&As or creating from scratch – include Liv bank from Emirates NBD, Pepper from Bank Leumi, Mashreq Neo from Mashreq Bank, ila Bank from Bahrain–headquartered Arab Banking Corporation (Bank ABC) and also First Abu Dhabi Bank‘s Magnati.

Nonetheless, partnerships with fintechs and other digital solutions seem to be a popular way forward. The list includes the likes of Mastercard this year partnering with One Global and i2c to provide tailored financial solutions that will enable the issuance of digital mobile wallets in the region, as well as with Saudi-Arabian based HyperPay, an e-commerce payments services provider in MENA, to drive the adoption of digital payment solutions across the region.669

Others include banks such as the Saudi financial institution Alinma Bank entering into a fintech partnership with FOODICS to benefit the region’s small business owners and micro- businesses. The partnership will combine Alinma Bank’s existing fintech capabilities with the cloud- based technology and payments platform’s tech ecosystem of restaurants across MENA.670

For fintechs, especially in a region like MEA with around 70 countries, partnerships with more established financial institutions or even other fintechs could be beneficial. For example, each country has its own regulations and licences, which could be daunting for a fintech to set up in each one. Using traditional financial services’ established relationships with the regulator and using their own

existing licences could favour the fintech. For the financial institution, the fintech could help provide their customers with a more enhanced customer experience that has been projecting higher globally and with further demand due to the pandemic.

Nonetheless, there is still more that can be done. As highlighted earlier in this report, the MEA financial services industry is undergoing and/or needs digitalisation to stay competitive. For example, a Deloitte 2020 study found that 82 per cent of Middle East banking customers surveyed are willing to start using fintech solutions yet only around a quarter of Middle East banking customers were using fintech solutions.671

Partnerships do not always go well. From profitability to ensuring compliance, there are a number of reasons why, such as the challenges at present in Kenya with Flutterwave and Chipper Cash.

With the potential for embedded finance to accelerate in this region, as it is still relatively infant compared to the rest of the world, the philosophy of partnerships will be important for fintechs to really see a new vertical of growth in MEA. It is expected that by 2029, revenues will make this a nearly $40billion industry, four times what it is expected by the end of this year of $10billion.672 Of course, the fintech industry will also see further potential and their collaborative efforts across the economy will be the key to their success.

The question is also valid for fintechs who are looking to do business here, as well as financial institutions and other third parties on where to progress with fintechs. Nonetheless, unanimously many seem to think that fintechs are needed for important digital innovation.

ii.10 predictions of fintech in MEA for the following year and beyond

The following are 10 potential developments for fintech in the region.

PARTNERSHIPS BETWEEN THE FINANCIAL SERVICES INDUSTRY AND FINTECHS WILL CONTINUE TO THRIVE BUT M&A s

1Partnerships between the financial services industry and fintechs will continue to thrive but so will mergers & acquisitions. Many once considered fintechs as competitors or replacements, but as this report highlights there can be flourishing relationships ahead. As we have seen in the BNPL industry in MEA, M&A and investments can take various forms. With BNPL, we’ve seen Western fintechs in this space enter the MEA market through investments or outright acquisitions.

With regards to FS, as banks, insurance and other financial institutions adopt digitalisation solutions, we will continue to see the global trend of either partnering fintechs, acquiring them or having banks create their own.

REGULATORY WILL REMAIN TO BE A CHALLENGE FOR MANY FINTECHS AND THE WIDER FS AND TECH SECTOR

BRAIN DRAIN WILL CONTINUE TO BE A CHALLENGE IN THE REGION

3MEA presents a unique challenge where many of its best and brightest (and often their business ideas) go to greener pastures. Even in Startup Nation Israel, many of their startups that have achieved unicorn status and/or have become global players often move to the US, UK or even Singapore. Even one of Africa’s success stories, Chipper Cash, is based in the US and started there by Ugandan and Ghanaian founders.

Should further economic development not happen in the lower and middle income nations, many will continue to leave and bring potentially the next fintech unicorn with them.

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As the financial services industry is one of the most regulated sectors in the world, it remains a challenge for fintech development, and this can also be felt in MEA. As it is more infant than say in Europe or Singapore, regulators are still coming to grips with the rise of fintech and its subsectors including the likes of cryptocurrencies or open finance or embedded finance.

It will be a balancing act for fintechs to try to address the needs of its business but importantly being compliant. As mentioned earlier, many have partnered with the likes of banks, insurance and other institutions and even with other fintechs to be able to operate legally in their various jurisdictions.

Despite that, Covid and wider digitalisation has further boosted efforts with respect to regulations. In MENA, a survey showed that most regulators now perceived fintech to be supportive in market development at 85 per cent, promoting financial inclusion at 77 per cent, promoting competition at 69 per cent and in promoting the broader adoption of digital financial services at 62 per cent. These figures and mentality are much higher overall than the global average – for instance with market development where the global average was at 61 per cent and in promoting competition at 47 per cent.

Due to the pandemic, almost half (46 per cent) of MENA regulators that were surveyed have introduced new measures that are related to KYC, AML and digital identity, coupled with other initiatives to support economic relief (46 per cent), business continuity (38 per cent) and cybersecurity at 23 per cent.673 It will be interesting to see future developments with further economic integration with the AfCFTA in Africa for instance, that can potentially be further integrated to maybe one day being the ‘EU of Africa’.

Nonetheless, in places such as the UAE, much of its success can be attributed to the expatriate population, where many come from MEA countries, that have brought their business ideas; many of the fintechs there are present are owned and/or founded by expats. Also, in Israel, quite a few of the fintech unicorns have been able to find ways to still keep their headquarters there but still be global players. Furthermore, with economic development strategies and government support, building the wider fintech and digital ecosystem will hopefully give future entrepreneurs and tech workers the confidence to stay and work in their home countries.

MONEY WILL CONTINUE DRIVING MUCH OF THE GROWTH ESPECIALLY IN AFRICA

Mobile money was once an East African phenomenon, thanks to Kenya in particular, which has spread to much of the world. Its success can be seen earlier in this report whereby many of the various subsectors of fintech are heavily influenced by the popularity of mobile money and mobile phones in general. The most basic USSD technology has brought millions of people across the African continent access to financial services they historically did not have.

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This looks to keep on expanding and much of mobile money’s popularity in the continent will continue to drive much of fintech’s growth. First, in pre-pandemic 2020, Africa’s economy overall was growing fast, with some of its countries having some of the highest growth rates. As people enter the middle class, it presents a new opportunity for them via smartphones to name a few.

In addition, not all of Africa has fully adopted mobile money solutions yet. This also presents opportunities for the likes of M-Pesa or MTN to expand to those markets where it hasn’t been saturated yet.

THE GLOBAL ECONOMY WITH ONGOING INFLATION AND RECESSION WORRIES WILL AFFECT FINTECH 5

As with anything at present, the coronavirus pandemic, logistical crises due to Chinese ports from 2020 to present, the Suez Canal and the Russia and Ukraine War, and the noticeable inflation challenges will of course also have an impact on fintech.

As the pilot edition of this report highlighted, global remittances fell around five per cent in 2020 due to the pandemic and this potentially could happen again. In addition, there have been headlines with BNPL with regards to defaults, such as in the USA where it is estimated that at least one in three have missed at least one payment.674

In times of inflation and/or recession, when people might be struggling, this can push the vulnerable to use the likes of BNPL without being able to afford to pay their payments. This has also affected the likes of cryptocurrencies as well, which many people around the world both use to gain wealth and to protect their wealth too.

MORE UNICORNS TO COME FROM THE MEA REGION

It is predicted that there will be more unicorns to come from this region and it won’t just be mainly from Israel. This can be demonstrated by successes seen in Africa and Turkey - the former having zero until six years ago and the latter none until 2020. To note, fintech has not only taken half of the total VC percentage this year but has also been the continent’s main source of unicorns.

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For the rest of the Middle East, minus also Saudi Arabia and Egypt in fintech, there are no others. But this looks to change. The UAE, for instance, has prioritised that by 2031 it will have at least 20 unicorns.676 Therefore, coupled with both market demand for products and solutions and even government support via economic development strategies, unicorns will further see acceleration in MEA. The demand for accelerators and incubators, VCs, angel investors and other investors, other catalyst, mentors and wider players as highlighted in Chapter One to further build the ecosystem will help accelerate the unicorn factory in MEA.

MORE POTENTIAL LAYOFFS IN FINTECH

Due to a variety of factors – from sudden growth to valuation to the current economic state globally, there most likely will be further layoffs at some fintechs. This year, as of 1 July, some 3,709 employees — excluding crypto companies — have been laid off across 41 ‘layoff events’ in the second quarter of this year. Interestingly, according to the same source by Roger Lee of Layoffs. fyi, there were no fintech layoffs in all of last year.675

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The uncertainty of the current global economy at present could further exasperate more layoffs across various industries – including even fintech.

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While the payments, money transfers and remittances sector is projected to further grow heavily in MEA, so too are the non-payments, money transfers and remittances subsectors. As what Chapter Two highlighted, all of them show potential to grow in the region, as many of them are still relatively in their infancy – whether it be access for more of the underserved or unserved, or the wider digitalisation of those offerings, such as wealth management.

Cryptocurrencies, at the time of writing, have seen better days. However, given much of MEA has various challenges – both economic and political – the popularity and necessity of crypto for many will most likely continue. In the likes of Lebanon its popularity can be seen as a more secure investment than its own Lebanese Lira.

Finally, ‘super apps’ will further grow as fintechs extend beyond their initial offerings. This could be historic payment solutions that suddenly offer lending or even expand to e-commerce and delivery. It could be third parties like telecoms or financial services players –whether on their own, M&A or partnerships, also offering new avenues via fintech (aka M-Pesa in Kenya or Safeboda in Uganda for instance).

GROWTH WILL BE FILTERED DOWN THROUGH THE REGION'S WIDER ECONOMIC DEVELOPMENT GROWTH

The future of fintech and its further acceleration will of course depend on the economic development growth of the region and if their economic development strategies are achieving respective key performance indicators (KPIs).

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It will not only see the growth of fintech but also diversify its offerings and providing and creating more cutting-edge technology. For instance, in much of Africa where mobile money with USSD has been the driving force of fintech, economic development and growth of countries where it dominates can further help more out of poverty and see an increase in demand for fintech solutions catered to the middle class who most likely can afford a smartphone.

Nonetheless, in Chapter One, we showed the growth of smartphones in MEA, whereby that by 2025 at least half or the majority in MEA will be smartphone owners, thereby further boosting offerings and innovations to more people beyond simple USSD.

FINANCIAL INCLUSION WILL CONTINUE TO PLAY A LARGE NARRATIVE IN THE REGION DUE TO MANY UN AND UNDESERVED

As highlighted in this report, the majority in Africa (57 per cent) and the Arab World (69 per cent) are unbanked. And much of the region is also uninsured. Studies on fintech and wider financial services play a unique role in MEA as the narrative, at least for the foreseeable future, will still focus much around the financial inclusion part. After all, it is not only individuals who are excluded but also MSMEs. As highlighted with economic development, much of that will help to hopefully bridge that gap.

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PAYMENTS WILL STILL DOMINATE BUT NON-PAYMENTS (SUCH AS CRYPTOCURRENCIES) WILL GROW

iii. Key considerations moving forward

The following need to be taken into consideration and prioritised for a future of fintech in MEA to continue to further develop. It is presented via its own strategic framework unique to this report and main author that highlights key considerations overall for the region with regards to its own unique situation for an industry like fintech to continue to thrive in.

PILLAR ONE: REGULATORY AND BUSINESS FRIENDLY ENVIRONMENT

For businesses, such as fintechs, to thrive, it will require an environment whereby legislation is not only protecting consumers but also protecting businesses, with the latter giving them a resound environment for them to thrive and increase both local players and attract FDI. This was highlighted in the previous version of this report. Overall, a business should feel they are compliant with local regulations whereby they can grow and expand. They could be achieved through the following:

■ Licences easier for sub-sectors – a complication for many globally and in MEA is the ability and ease to obtain a licence, especially in the fast-paced changing environment of fintech with the popularity of the likes of cryptocurrencies and BNPL. It should be not only easier for fintechs to obtain them but further economic integration in the region with respect to it being used cross border.

■ Develop more incentives – governments should be creating more fintech-specific initiatives which many are doing and/or in discussions of doing. These include the likes of regulatory sandboxes or frameworks and implementation around open

banking and finance. This also includes promoting for further creations of the wider ecosystem to cater to the sector (i.e. accelerator and incubation programmes).

■ Policies to boost FDI – there should be policies in play that promote the expansion of fintechs in their respective countries so that local players feel confident to not only expand there but stay there. From investment promotional agencies (IPAs) of a jurisdiction prioritising the sector to special economic zones (SEZs), VC attraction – the list is endless. Nevertheless, there are positives already.

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 such as the GCC, which historically has one of the world’s highest rates of public sector employees, 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.

■ Reverse brain drain – policies, rising living standards and economic opportunities need to come so that the best and brightest do not continue to keep leaving MEA but rather stay here – which has been a problem in fintech.

A FUTURE VISION FOR FINTECH IN THE MIDDLE EAST AND AFRICA – 2022 AND BEYOND

Source: Richie Santosdiaz

PILLAR THREE: FINANCIAL LITERACY & EDUCATION

Financial literacy and education is an important one for the overall adoption of fintech to the masses. It presents a challenge to a region where a significant proportion of the population do not know how to read and write and are financially excluded but nonetheless literacy is important. This can be achieved through the following:

■ Increase general financial literacy – general financial literacy, not factoring technologies, is important and should be a priority even from primary and secondary school.

■ Increase fintech awareness – many people across the world, including MEA, are using fintech without even realising it. An awareness of wider financial technologies and its benefits and convenience could be done, in particular with those who are financially excluded like blue collar workers in MEA, rural farmers, and micro businesses – to name a few.

■ Increase the culture of savings and investment – as highlighted earlier there remains a gap in the culture of savings and investments such as in the stock market in much of MEA, whereby education of the benefits of this can bring opportunities

PILLAR FOUR: PROMOTE INFRASTRUCTURE

Digital and physical infrastructure and its wider base needs to be a priority so that residents in MEA can fully embrace the benefits of not only fintech but wider digital products and offerings. In particular, as much of the less affluent parts still lack what many take for granted in today’s terms like internet and smartphones. This is of particular importance especially in rural areas, where basic traditional financial services infrastructure like bank branches let alone an ATM remains to be scarce.

■ Increase internet access (also 5G) – the lack of internet, in particular in much of rural Africa and in less affluent parts of the Middle East, needs to be addressed. Addressing the lack of 4G or 5G in many parts should also be a priority to cater to future disruptive technologies.

■ Increase smartphone accessibility – less affluent parts of MEA and also blue-collar workers in MEA who live in rich parts of the rich should have access to technologies like a smartphone, promoting an evolution away from basic USSD technologies.

■ Foster new ideas (i.e. metaverse) – MEA should react positively with regards to new technologies that can have an impact with fintech such as with the metaverse for instance.

PILLAR FIVE: MSME PRIORITISATION AND ENGAGEMENT

There has been financial exclusion not just with individuals but also micro and small and medium enterprises (MSMEs), which historically, although contributing most to both the formal and informal (also known as the gig economy) economies of MEA, often struggle to get access to basic financial services to start or grow a business. The following should be highlighted:

■ MSME and industry dialogues – there should be dialogue between the wider financial services industry and technology disrupters like fintech but, importantly, also including businesses – both large but importantly small and micro businesses. In particular, as the informal economy plays a large role in the region, this should not be forgotten.

■ MSMEs financial access – there should be commitments and initiatives for traditional financial services and fintechs to boost the financially excluded MSMEs, in particular also ensuring that farmers, women-owned businesses and other historically excluded groups can get access to finance.

■ Improve rejection financial services rate for MSMEs – there needs to be a commitment to improve the rejection rate of MSMEs as highlighted earlier so that way there is less bureaucracy, red tape and less hurdles with regards to apply for say a loan and having a higher probability of it getting approved.

Overall, the most important stance of this future framework for MEA is that it will help the region with overall economic development prosperity. It goes hand in hand and plays a stronger role in ensuring the various economic development strategies in place across the region – from the wealthy GCC to the middle income and lower income economies – has digitally transformed itself to allow for fintech in this scenario to play a greater role in its economic development.

iv: Summary of the report

he short yet impactful journey of fintech in the Middle East and Africa has shown those, both new to the region and not so new, the tremendous opportunity that finance technology has and can bring to the region.

Despite the challenges of having to explain a region that is so vast and where one in four of the world’s population lives, highlighting the various struggles and aspirations has shown the similarities MEA countries share. This includes their economies, as despite having some of the world’s richest countries as well as some of its poorest, many of them have seen growth stem from finite natural resources –whether it be oil and gas, gold or agriculture. This has resulted in other sectors not being as highly developed – except in a handful of places, such as in Israel, Bahrain and the UAE, which have had to develop their services sector and made the latter, in particular, such a leading financial hub. This also filters down to other sectors such as tech, where countries like Israel have been leading the way globally.

Whether it be the rich parts or the middle and lower income parts of MEA, the importance of economic diversification can be felt via high-level government strategies that are aiming at economic diversification and digitalisation to help boost economic growth – to maintain and innovate for the rich GCC and for the lower and middle economies to raise their income status – think Rwanda which aspires

to be a high-income country by 2050.

Through strategies, coupled with market demand, this has seen increased importance for financial services, tech and the rise of financial technologies to grow and help bring economic prosperity.

It has been said many times that fintech in MEA is in its infancy but it has already addressed challenges and opportunities across many demographics of the region. It has one of the world’s busiest corridors of migrant workers – those moving to other MEA countries like more affluent African countries such as South Africa or Kenya but in particular to rich Gulf countries and Israel, as well as much of the rest of the world such as South Asia like India, Bangladesh and Pakistan and South East Asia like the Philippines who also currently call MEA home. Add to this that the population of MEA is very young, with a relatively high overall mobile phone usage (the rich MEA ones having some of the world’s highest smartphone usage) and the fact that, despite all of this, financial exclusion remains to be a massive challenge in the region.

This explains why fintech developments in MEA in many ways have been out of necessity and to help bring financial inclusion – even from the basics of USSD technology with the start of M-Pesa in Kenya back in 2007 that has made East Africa a global leader in mobile money. Despite the importance of payments, mobile transfers and

remittances solutions in MEA, other fintech subsectors such as solutions in lending, wealth management, open and embedded finance, digital currencies including cryptocurrencies, digital banks, regtech, insurtech and gametech have been growing as well.

In many ways, fintech has also provided a lifeline for many in MEA. Besides just the mobile money example another includes the popularity of cryptocurrencies. Many have seen their fair share of economic challenges in recent memory such as the devaluation of currencies or even near collapse of economies, such as in Lebanon. Therefore protecting one’s assets has seen usage of crypto in MEA to be one of the highest in the world.

The rise of fintech nonetheless presents its challenges in the region. For regulators – how does one balance the overall protection of consumers with a business-friendly environment? These are regular struggles felt globally and especially in this region.

There remains to be many more opportunities for fintech to thrive in MEA, as the narrative partially shows the missing potential customers. These include the likes of insurance, where the majority across MEA, especially in Africa minus South Africa, are uninsured. Even with BNPL taking off in Europe and North America, there remains to be much more opportunity for that in MEA.

Fintech, which is already to be estimated to be worth at least $15billion in MENA (minus Israel), contributes at least 10 per cent to the Israeli GDP, and is estimated to contribute $180billion to the African economy, has made its inroads. Nonetheless, fintech’s share in the region isn’t evenly spread and the report highlights key 23 fintech hubs that are generating much of MEA’s fintech activity.

By looking at 23 fintech hubs in MEA, it is clear that those who, based on economic development indicators, tech and digital indicators and fintech-specific indicators, were ranked in the emerging fintech hubs (Tier-Two) and particularly the two ranked as premier global fintech hubs did so (Tier-One) – the two were Israel and the United Arab Emirates. Overall, not much of the rankings changed from the previous version of this report last year.

Much of the Tier-Three rankings, which is unique to this report, do show similarities with other research findings of similar nature.

Rather than just saying a country is a fintech hub, the rankings play a strong role with regards to the country’s digital environment and importantly, its economic development and economic health. Therefore, it shouldn’t be any surprise that both Israel and the UAE have the Tier-One highest ranks.

In addition, the Tier-Two emerging hub ranking shouldn’t be surprising, especially those that have ranked towards the higher end of that spectrum, such as Saudi Arabia or Bahrain or Turkey. With the former, it has in a short time made noticeable implementations tied to its Saudi Vision 2030 that not only has seen its fintech catalyst, Fintech Saudi, born and active in boosting the sector – through events, trainings, internships to name a few – but also infrastructure and digital infrastructure development, significant advancements on payments, as well as its ambitions with respect to open banking.

Also, it is no surprise that the ‘Big Four’ of Egypt, Kenya, South Africa and Nigeria also rank among the tier two. They have large economies, populations, are middle income nations and have significant activity in the fintech space and relatively strong financial

services and tech industries. Also, others such as Ghana and Tunisia, which also ranked in the same category, have done relatively well in the space – despite their smaller sizes compared to the four. Other noticeable countries include Rwanda, Morocco, Tanzania and Uganda.

Since the first version of this report last year, unfortunately the world has faced even more difficult problems – who could have thought 2020 and 2021 could have gotten worse? From logistics and supply challenges to Covid-19 still lingering to the Russia and Ukraine War to even Sri Lanka – the world hasn’t had a break. This of course can impact fintech with the world economy experiencing some of the highest levels of inflation we have had in recent memory. It can potentially reduce the level of remittances to increased defaults on the likes to BNPL – things that can directly impact fintech and that doesn’t factor in any retraction of GDP.

Also noticeable with MEA, is that the region has the potential for economic and political integration - an area where fintech and wider digital and cross-border payments specifically can see its impact. For instance, in Africa the launch of the African Continental Free Trade Area (AfCFTA) last year has its Pan-African Payment and Settlement System (PAPSS) at the forefront of the AfCFTA’s implementation. It can revolutionise the continent, which historically has relied on going overseas outside of Africa to places like Europe. It presents an opportunity to boost trade and investment, and subsequently economic growth, among African nations.

The governments of MEA have seen fintech and wider digital as an engine for its future economic growth. Fintech didn’t just happen overnight here – but a combination of different scenarios with often a need for solutions like mobile payments for instance – has led governments here to react and undergo their own digital transformation. They have put the likes of fintech, wider tech and even the financial services industry, on pedestals.

To conclude, this report ends with an overview of a region of 1.8 billion people while understanding at macrolevel the area one-fourth of the world’s population calls home. Despite their different socio and cultural economic diversities, the region as a whole presents similarities and challenges that are both shared globally and unique to here. One can understand the need and the growth and its potential for MEA. One thing is for sure, should a 2023 version of this report be written, hopefully the words coronavirus, inflation and war can be written in the past and not present nor future. Instead, the present and future will be saved for fintech and financial inclusion. Richie Santosdiaz and the MEA 2022 Report team at The Fintech Times

The rise of fintech nonetheless presents its challenges in the region. For regulators –how does one balance the overall protection of consumers with a business-friendly environment? These are regular struggles felt globally and especially in this region

i. 23 Countries' Findings Supplement

Chapter Five. Endnotes

1 https://www.visualcapitalist.com/map-true-size-of-africa/ 2 https://abcnews.go.com/International/wireStory/syrian-leader-receivescredentials-bahrain-ambassador-85492948

3 https://www.gfmag.com/global-data/economic-data/the-poorestcountries-in-the-world 4 https://worldpopulationreview.com/country-rankings/poorestcountries-in-the-world 5 https://energycapitalpower.com/biggest-oil-producer-in-africa-in-2022/ 6 https://www.worldstopexports.com/worlds-top-oil-exports-country/ 7 https://www.nsenergybusiness.com/features/biggest-naturalgas-reserves-countries/ 8 https://www.afdb.org/en/documents/african-economic-outlook-2020 9 https://education.nationalgeographic.org/resource/oil-discovered-saudi-arabia 10 https://thefintechtimes.com/israel-and-its-fintech-ecosystem-2022/ 11 https://eh.net/encyclopedia/a-brief-economic-history-of-modern-israel/ 12 https://ciaotest.cc.columbia.edu/olj/meria/shl02_01.pdf 13 https://www.cidob.org/publicaciones/serie_de_publicacion/notes_ internacionals/n1_189/bahrain_s_economy_oil_prices_economic_dive rsification_saudi_support_and_political_uncertainties 14 https://www.weforum.org/agenda/2019/11/dubai-uae-transformation/ 15 https://gulfnews.com/travel/massive-influx-of-tourists-dubai-is-now-theworlds-fourth-most-visited-city-1.69202063

16 https://www.worldstopexports.com/nigerias-top-10-exports/ 17 https://tradingeconomics.com/turkey/exports-by-category

18 https://www.worldbank.org/en/country/kenya/overview 19 https://thefintechtimes.com/kenya-and-its-fintech-ecosystem-in-2022/ 20 https://www.heritage.org/index/country/southafrica

21 https://www.britannica.com/place/Jordan/Economy

22 https://www.statssa.gov.za/?p=12075

23 https://africa.businessinsider.com/local/markets/these-20-african-countriesare-on-the-world-banks-low-income-list-due-to-low-gni- per/n03hbdc 24 https://worldpopulationreview.com/country-rankings/poorestcountries-in-the-world 25 https://www.youthpolicy.org/mappings/regionalyouthscenes/africa/facts/ 26 https://www.worldbank.org/en/region/mena/publication/mena-economic-updateforecasting-growth-in-the-middle-east-and-north- africa-in-times-of-uncertainty 27 https://www.worldbank.org/en/region/afr/overview 28 https://www.statista.com/statistics/421060/global-financial-institutions-assets/ 29 https://www.pwc.com/m1/en/industries/banking-capital-markets.html 30 https://www.afdb.org/fileadmin/uploads/afdb/Documents/Knowledge/ AEB_Vol_6_Issue_5_2015_The_Banking_System_in_African_Facts_and_ Challenges-10_2015.pdf 31 https://insight.factset.com/is-consolidation-the-way-forward-for-the-middleeast-banking-sector 32 https://thefintechtimes.com/fintech-landscape-of-lebanon-2022/ 33 https://www.executive-magazine.com/economics-policy/a-real-future-forbeiruts-financial-center-potential 34 https://www.bahrain.bh/wps/portal 35 https://thefintechtimes.com/mauritius-and-its-fintech-ecosystem-2022/ 36 https://www.longfinance.net/documents/2902/GFCI_31_Report_2022.03.24_v1.0.pdf 37 https://www.zawya.com/en/business/fintech/difc-contributes-more-than-12of-dubais-gdp-essa-kazim-n2z4w6yu 38 https://thefintechtimes.com/overview-of-the-economic-developmentstrategies-in-the-middle-easts-gcc-region/ 39 https://www.zurich.com/-/media/project/zurich/dotcom/sustainability/docs/ the-role-of-insurance-in-middle-east-north- africa.pdf?rev=f5592144a1b74b52 815712770fbd9b70&hash=0F4F82A0E9B16AB0F6DA94E1E747C2BA

40 https://thefintechtimes.com/overview-of-insurance-and-insurtech-in-africa/ 41 https://thefintechtimes.com/country-reports/

42 https://www.ft.com/content/ac0789fc-87e1-11e7-8bb1-5ba57d47eff7

43 https://www.wilsoncenter.org/publication/the-next-banking-crisis-will-notbe-the-middle-east

44 https://www.bis.org/bcbs/basel3.htm

45 https://thefintechtimes.com/islamic-finance-in-the-global-digital-economy/Mai

46 https://www.zurich.com/-/media/project/zurich/dotcom/sustainability/docs/ the-role-of-insurance-in-middle-east-north- africa.pdf?rev=f5592144a1b74b52 815712770fbd9b70&hash=0F4F82A0E9B16AB0F6DA94E1E747C2BA

47 https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=22092

48 https://data.worldbank.org/indicator/IC.CRD.PRVT.ZS?locations=ZQ

49 https://www.economist.com/middle-east-and-africa/2021/12/04/datacentres-are-taking-root-in-africa

50 https://www.mfw4a.org/sites/default/files/resources/bpc_digital_banking_ in_africa.pdf

51 https://www.bpcbt.com/hubfs/2022_campaigns/DGB report Africa/ BPC_Digital banking in Africa.pdf

52 https://www.bpcbt.com/hubfs/2022_campaigns/DGB report Africa/ BPC_Digital banking in Africa.pdf

53 https://www.forbesmiddleeast.com/leadership/opinion/what-is-the-future-offinancial-inclusion-in-mena

54 https://www.imf.org/~/media/Files/Publications/DP/2019/English/ FISFMECAEA.ashx

55 https://www.theafricaceoforum.com/en/ressources/how-can-lenders-closeafricas-330bn-sme-finance-gap/

56 https://www.bloomberg.com/news/articles/2022-01-24/after-160-yearsstandard-bank-goes-99-digital-during-pandemic

57 https://african.business/2021/03/finance-services/covid-accelerates-africasdigital-revolution/

58 https://assets.kpmg/content/dam/kpmg/tr/pdf/2022/06/turkish-startupinvestments-q1-2022.pdf

59 https://www.zippia.com/advice/tech-industry- statistics/#:~:text=How%20 much%20is%20the%20tech,is%20worth%20roughly%20%245.2%20trillion. 60 https://www.statista.com/statistics/1070092/israel-highest-valued-techcompanies/

61 https://youappi.com/the-tel-aviv-tech-hub-a-home-to-innovation-andscalability- youappi/#:~:text=The%20Tel%20Aviv%20tech%20hub%20has%20 become%20one%20of%20the,created%20a%20focus%20on%20scalabili ty.

62 https://www.timesofisrael.com/israeli-tech-companies-raise-5-6-billion-infirst-quarter-of-2022/

63 https://therecursive.com/turkey-created-6-unicorns-in-2-yearsan-investor-tells-what-s-the-secret/

64 https://assets.kpmg/content/dam/kpmg/tr/pdf/2022/06/turkishstartup-investments-q1-2022.pdf

65 https://assets.kpmg/content/dam/kpmg/tr/pdf/2022/06/turkishstartup-investments-q1-2022.pdf

66 https://www.arabianbusiness.com/money/corporate/funding/mena-venturecapital-funding-soars-to-a-record-2-6bn-in-2021-as- fintech-e-commerceclaim-a-third-of-the- deals#:~:text=The%20MENA%20region%20has%20 achieved,Africa%20(MENA)%20Venture%20Report.

67 https://www.arabianbusiness.com/money/corporate/funding/mena-venturecapital-funding-soars-to-a-record-2-6bn-in-2021-as- fintech-e-commerceclaim-a-third-of-the- deals#:~:text=The%20MENA%20region%20has%20 achieved,Africa%20(MENA)%20Venture%20Report.

68 https://qz.com/africa/2175765/the-big-deal-vc-funding-in-africa-is-up-150percent-from-q1-2021-to-q1-2022/

69 https://businesstech-co-za.cdn.ampproject.org/c/s/businesstech.co.za/news/ technology/606002/south-africa-is-building-its-own- silicon-valley-andcompanies-ranging-from-amazon-to-startups-are-hiring/amp/

70 https://nairametrics.com/2022/02/15/african-unicorn-the-most-valuablestartups-by-africans-you-should-know/

71 https://restofworld.org/profile/ham-serunjogi/

72 https://www.forbesmiddleeast.com/innovation/startups/themiddle-easts-5-unicorns

73 https://www.techaviv.com/unicorns

74 https://forbes.co.il/e/israeli-unicorns-the-next-billion-dollar-startups2022/#:~:text=A%20total%20of%2092%20unicorns,of%20Israel's%20gross%20 domestic%20product. 75 https://www.statista.com/chart/27266/unicorns-bycountry-world-map/#:~:text=Unicorns,-by%20Katharina%20 Buchholz&text=According%20to%20CB%20Insights%2C%20 there,beginning%20of%20the%20current%20year.

76 https://thefintechtimes.com/fintech-unicorns-quadruple-in-numbersin-less-than-18-months/

77 https://www.forbes.com/sites/jonyounger/2021/01/18/you-dont-need-anincubator-to-startup-a-great-freelance-platform-six-other- resources-you-cantap-now/?sh=292f9fa87aec

78 https://investinisrael.gov.il/Media/posts/Pages/Israeli-Business-Incubatorsand-Accelerators-Explained.aspx

79 https://www.cbfo.gov.tr/sites/default/files/2021-12/the-state-of-fintechecosystem-in-turkiye-2021.pdf

80 https://techgenix.com/mubadala-fight-tech-slump/

81 https://www.im-capital.com/im-capital-among-the-top-5-active-vcs-in-themiddle-east/

82 https://www.ginsum.eu/overview-of-israels-venture-capital-landscape/ 83https://www.zawya.com/en/business/careers/kuwaitis-and-non-gcc-arabstop-the-employees-in-govt-sector-ndo9yszh 84 https://worldpopulationreview. com/country-rankings/poorest-countries-in-the-world

85 https://www.birmingham.ac.uk/Documents/college-artslaw/ptr/ciforb/ resources/Nigeria.pdf

86 https://www.imf.org/en/News/Articles/2021/07/28/na-072821-five-things-toknow-about-the-informal- economy#:~:text=The%20informal%20economy%20 is%20a,important%20part%20of%20advanced%20economies.

87 https://www.weforum.org/agenda/2020/06/covid-19-is-likely-to-increase-youthunemployment-in-africa-this-is-how-business-can- mitigate-the-damage/ 88 https://www.wiego.org/sites/default/files/resources/files/Informal-EconomyArab-Countries-2017.pdf

89 https://english.alarabiya.net/features/2020/04/03/Informal-workers-in-Arabworld-hit-hardest-by-coronavirus-unlikely-to-get-help

90 https://data.unicef.org/resources/middle-east-north-africa-generation-2030/ 91 https://www.un.org/ohrlls/news/young-people%E2%80%99s-potential-keyafrica%E2%80%99s-sustainable- development#:~:text=Africa%20has%20 the%20youngest%20population,to%20realise%20their%20best%20potential. 92 https://mo.ibrahim.foundation/sites/default/files/2020-08/internationalyouth-day-research-brief.pdf 93 https://www.ifc.org/wps/wcm/connect/09012193-bbca-4d8b-8b3f2322eda6d9de/IFC+Report_Final.pdf?MOD=AJPERES&CVID=jXA.xEV 94 https://data.worldbank.org/indicator/BM.TRF.PWKR. CD.DT?end=2020&name_desc=false&start=2020&view=map 95 https://www.migrationdataportal.org/themes/remittances 96 https://thefintechtimes.com/fintech-and-tech-talent-migration-andremittances-in-the-middle-east-and-africa-region/ 97 https://thefintechtimes.com/country-reports/ 98 https://thefintechtimes.com/remittances-and-fintech-in-themiddle-east-and-africa/ 99 https://www.gsma.com/mobileeconomy/mena/#:~:text=The%20number%20 of%20mobile%20internet,at%20the%20end%20of%202021 100 https://www.gsma.com/mobilefordevelopment/blog/the-state-of-mobileinternet-connectivity-in-sub-saharan-africa/africa#:~:text=Africa%20has%20 the%20lowest%20number,on%20the%20continent%20by%202030. 101 https://www.statista.com/statistics/1124283/internet-penetration -in-africa-by-country/ 102 https://www.digitalvirgo.com/mobile-payment-middle-east/ 103 https://www.statista.com/topics/5338/smartphone-market-inmena/#topicHeader wrapper

104 https://thefintechtimes.com/overview-of-mobile-money-in-themiddle-east-and-africa/

105 https://www.gsma.com/mobileeconomy/sub-saharan-africa/

106 https://www.gsma.com/mobilefordevelopment/blog/the-state-of-mobileinternet-connectivity-in-sub-saharan-africa/

107 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8800198/#:~:text=In%20 Kenya%20in%202020%2C%20mobile,on%20smartphones)%20(14).

108 https://www.gfmag.com/global-data/economic-data/worldsmost-unbanked-countries

109 https://www.cashmatters.org/blog/uae-39-people-prefer-cash

110 https://www.gfmag.com/global-data/economic-data/worldsmost-unbanked-countries

111 https://www.strategyand.pwc.com/m1/en/articles/2021/all-set-for-growth.html

112 https://thefintechtimes.com/overview-of-mobile-money-in-themiddle-east-and-africa/

113 https://thefintechtimes.com/country-reports/

114 https://thefintechtimes.com/country-reports/

115 https://www.khaleejtimes.com/government/uae-announces-yearlong-leave-for-government-employees-to-start-businesses

116 https://saudigazette.com.sa/article/622130

117 https://thefintechtimes.com/an-overview-of-regulatory-sandboxesin-the-middle-east-and-africa-region/

118 https://thefintechtimes.com/the-101-on-the-african-continentalfree-trade-agreement-afcfta/

119 https://thefintechtimes.com/country-reports/ 120 https://thefintechtimes.com/overview-of-the-pan-african-paymentand-settlement-system-papss/ 121 https://www.afreximbank.com/afreximbank-and-afcfta-announce-theoperational-roll-out-of-the-pan-african-payment-and- settlement-system-papss/ 122 https://thefintechtimes.com/mfs-africa-joins-papss-in-a-massive-stepforward-for-africa/

123 https://www.afreximbank.com/afreximbank-and-afcfta-announce-theoperational-roll-out-of-the-pan-african-payment-and- settlement-system-papss/ 124 https://nairametrics.com/2022/01/17/understanding-the-hypearound-papss-and-how-it-works/ 125 https://papss.com/ 126 https://thefintechtimes.com/mfs-africa-joins-papss-in-a-massivestep-forward-for-africa/

127 https://papss.com/media/papss-announces-collaboration-with-bunato-build-a-payment-gateway-between-africa-and-the-arab- region/ 128 https://thefintechtimes.com/mfs-africa-joins-papss-in-a-massive-stepforward-for-africa/

129 https://thefintechtimes.com/overview-of-buna-across-the-middle-east-and-africa/ 130 https://papss.com/media/papss-announces-collaboration-with-buna-to-builda-payment-gateway-between-africa-and-the-arab- region/

131 https://thefintechtimes.com/overview-of-the-pan-african-payment-andsettlement-system-papss/

132 https://www.amf.org.ae/en/about-us

133 https://www.wam.ae/en/details/1395303031886

134 https://www.amf.org.ae/en/news/04-06-2021/amf-appoints-standardchartered-settlement-bank-euro-buna

135 https://www.amf.org.ae/en/news/15-04-2022/arab-monetary-fund-amf-holdsvirtual-workshop-elaborate-start-euro-operations-buna

136 https://www.wam.ae/en/details/1395303027821

137 https://www.zawya.com/en/business/fab-goes-live-with-arab-monetaryfunds-buna-system-r310avwz

138 https://thefintechtimes.com/overview-of-buna-across-the-middle-east-andafrica/ 139https://www.centralbank.ae/sites/default/files/2020-11/Aber Report 2020 - EN_4.pdf 140 https://thefintechtimes.com/country-reports/

141 https://thefintechtimes.com/uae-and-saudi-central-banks-releaseproject-aber-results-finds-dlt-promising/

142 https://www.gulf-payments.com/content/afaq/210323_GPC

143 https://www.arabnews.com/node/1785596/corporate-news

144 https://www.gulf-payments.com/content/afaq/211228_GPC

145 https://www.argaam.com/en/article/articledetail/id/1430231

146 https://www.arabnews.com/node/1785596/corporate-newsPress_Kit_EN_ v2.pdf Press_Kit_EN.pdf

147 https://braiseentrance.com/the-central-bank-the-implementation-ofthe-gulf-payment-system-aafaq-has-begun-in-kuwait

148 https://www.cbk.gov.kw/en/about-cbk/governor/profile

149 https://www.gulf-payments.com/content/afaq/211228_GPC Press_Kit_EN.pdf

150 https://thefintechtimes.com/cross-border-payments-in-the-middle-eastgulf-cooperation-council-region/

151 https://thefintechtimes.com/country-reports/

152 https://www.insiderintelligence.com/insights/fintech-ecosystem-report

153 https://news.crunchbase.com/business/global-vc-funding-unicorns-2021monthly-recap/

154 https://www.bloomberg.com/professional/blog/fintech-seen-contributing150-billion-africas-gdp-2022/

155 http://www.faapa.info/en/2022/06/02/israel-supporting-ghana-to-usefintech-as-engine-for-inclusive-growth%E2%80%AF/

156 https://mfc.org.pl/wp-content/uploads/2020/03/TURKEY_FINTECHCASE-STUDY_FEB2020.pdf

157 https://www.findevgateway.org/sites/default/files/users/user331/ CGAP-EY_FintechRegionalReport_ArabWorld_2020.pdf

158 https://www.theglobalcity.uk/fintech#:~:text=Financing%20growth,London%20is%20home%20to%20over%202%2C500%20fintech%20 companies,than%20any%20other%20global%20city.

159 https://fintechmagazine.com/sustainability/17-fintech-trends-you-shouldknow-about-ultimate-guide 160 https://www.difc.ae/ 161 https://techcrunch.com/2022/02/18/safeboda-bets-on-super-app-to-boostrecovery-from-pandemic- slump/?guccounter=1&guce_referrer=aHR0cHM6Ly 93d3cuZ29vZ2xlLmFlLw&guce_referrer_sig=AQAAAM6qa3gxTJ_ XBaYauzXWWMQgkus-72FKwnz3Uh7W_OogIqZAIGun-vJzf0tqSmQXkht2l34CMLef2iXyHr_usjPRQR97wjyGau7gG0koeaO2dm2GrSOg2K T3Tk7GB0oVag05YtsBiKdlj_G0ZpDk0FvS7YlWIAFhbLeJTumZDU3 162 https://techcrunch.com/2022/02/18/safeboda-bets-on-super-app-to-boostrecovery-from-pandemic- slump/?guccounter=1&guce_referrer=aHR0cHM6Ly 93d3cuZ29vZ2xlLmFlLw&guce_referrer_sig=AQAAAM6qa3gxTJ_ XBaYauzXWWMQgkus-72FKwnz3Uh7W_OogIqZAIGun-vJzf0tqSmQXkht2l34CMLef2iXyHr_usjPRQR97wjyGau7gG0koeaO2dm2GrS Og2KT3Tk7GB0oVag05YtsBiKdlj_G0ZpDk0FvS7YlWIAFhbLeJTumZDU3 163 https://thefintechtimes.com/the-country-of-uganda-using-ecommerceplatforms-to-overcome-covid-19/ 164 https://www.vodacom.com/news- article.php?articleID=7750#:~:text=The%20 M%2DPesa%20Super%20App%20is%20designed%20to%20be%20 a,government%20services%2 0and%20much%20more. 165 https://thefintechtimes.com/country-reports/ 166 https://www.statista.com/outlook/dmo/fintech/africa 167 https://gomedici.com/research-categories/africa-fintech-report-2020 168 https://www.mordorintelligence.com/industry-reports/middle-east-andnorth-africa-digital-payments-market 169 https://www.mckinsey.com/industries/financial-services/our-insights/ the-future-of-payments-in-the-middle-east 170 https://thefintechtimes.com/saudi-arabian-banks-show-signs-ofimprovement-with-post-covid-19-economic-recovery/ 171 https://www.paymentscardsandmobile.com/shift-report-a-guide-to-themiddle-east-payments-industry/

172 https://www.globenewswire.com/en/news-release/2022/03/23/2408296/28124/ en/Africa-Middle-East-Embedded-Payment-Markets- and-InvestmentOpportunities-Report-2022-Market-to-Grow-by-44-6-to-Reach-5-860-4Million-in-2022-Forecast-to-2029.html

173 https://www.mastercard.com/gateway/vision/insights/ payment-innovation-mea.html

174 https://www.pymnts.com/smbs/2022/30-of-uae-smb-customers-pay-onlineusing-digital-wallets-highest-in-6-country-study/

175 https://thefintechtimes.com/country-reports/

176 https://thefintechtimes.com/post-pandemic-attitudes-towards-financesacross-cemea-revealed-by-visa/

177 https://thefintechtimes.com/post-pandemic-attitudes-towards-financesacross-cemea-revealed-by-visa/

178 https://www.thenationalnews.com/business/technology/2022/05/31/ demand-and-public-initiatives-to-drive-digital-payments-in- middle-east/ 179 https://thefintechtimes.com/payment-and-paytech-landscape-in-the-middleeast-and-africa/

180 https://www.cnnphilippines.com/business/2021/11/12/unbanked-Filipinoslack-of-access-banks-.html

181 https://www.un.org/development/desa/en/news/population/ remittances-matter.html

182 https://www.digipay.guru/blog/fintech-impact-on-internationalremittance/#:~:text=Lower%20cost,in%20an%20overall%20lower%20cost. 183 https://www.digipay.guru/blog/fintech-impact-on-internationalremittance/#:~:text=Lower%20cost,in%20an%20overall%20lower%20cost.

184 https://oxfordbusinessgroup.com/news/how-fintechs-are-revolutionisingremittances-emerging-markets

185 https://fintechnews.ae/uae-fintech-startups-dubai-abu-dhabi/

186 https://thefintechtimes.com/smaller-decline-than-projected-for-remittanceacross-the-world/

187 https://thefintechtimes.com/country-reports/

188 https://www.gsma.com/sotir/wp-content/uploads/2022/03/GSMA_State_of_ the_Industry_2022_English.pdf

189 https://african.business/2021/09/trade-investment/somalia-points-the-wayto-first-cashless-society/

190 https://qz.com/africa/2161960/gsma-70-percent-of-the-worlds-1-trillionmobile-money-market-is-in-africa/

191 https://edition.cnn.com/2017/02/21/africa/mpesa-10th-anniversary/index.html 192 https://www.gsma.com/sotir/wp-content/uploads/2022/03/GSMA_State_of_ the_Industry_2022_English.pdf

193 https://thefintechtimes.com/using-mobile-payments-and-wallets-in-africa/ 194 https://www.gsma.com/sotir/wp-content/uploads/2022/03/GSMA_State_of_ the_Industry_2022_English.pdf

195 https://www.mckinsey.com/industries/financial-services/our-insights/ mobile-financial-services-in-africa-winning-the-battle-for-the- customer 196 https://thefintechtimes.com/the-101-on-the-african-continental-free-tradeagreement-afcfta/

197 https://thefintechtimes.com/overview-of-mobile-money-in-the-middle-eastand-africa/

198 https://uae.sharafdg.com/flexipay-convert-your-purchases-to-affordable1824-months-installments/

199 https://www.bradlows.co.za/apply-for-layby

200 https://thepaypers.com/expert-opinion/buy-now-pay-later-series-i-the-sizeof-the-market-and-economics--1249228

201 https://www.softwaregroup.com/insights/blog/article/can-buy-now-pay-laterbnpl-deliver-in-emerging-markets

202 https://www.insiderintelligence.com/insights/buy-now-pay-later-ecommercefinancing-consumer-credit/

203 https://thepaypers.com/expert-opinion/buy-now-pay-later-series-i-the-sizeof-the-market-and-economics--1249228

204 https://thepaypers.com/expert-opinion/buy-now-pay-later-series-i-the-sizeof-the-market-and-economics--1249228

205 https://thefintechtimes.com/seamless-middle-east-2022-watch-video-interviews/

206 https://thefintechtimes.com/a-101-of-the-startup-nation-israels-startup-andfintech-landscape/

207 https://en.globes.co.il/en/article-point-of-sale-credit-boosts-israelifintech-1001383752

208 https://www.theasianbanker.com/updates-and-articles/how-should-banksand-fintechs-rethink-their-bnpl-services-in-africa

209 https://www.globenewswire.com/en/news-release/2022/04/29/2432267/28124/ en/South-Africa-Buy-Now-Pay-Later-Market-Report- 2022-Regional-BNPLCompanies-are-Targeting-the-B2B-Segment-to-Expand-their-Business-inSouth-Africa.html

210 https://www.bruegel.org/2022/05/buy-now-pay-later-the-age-of-digital-credit/ 211 https://thefintechtimes.com/spotlight-uk-government-announces-regulatorycrackdown-on-buy-now-pay-later-services/

212 https://www.menabytes.com/zip-acquires-spotii/ 213 https://thefintechtimes.com/bnpl-platform-tamara-closes-its-series-a-roundin-mena-with-110-million-of-secured-funding/

214 https://thefintechtimes.com/buy-now-pay-later-bnpl-landscape-in-themiddle-east-and-africa/

215 https://fintechnews.ae/7052/virtual-banking/20-neobanks-in-the-middle-east/ 216 https://www.papara.com/en/

217 https://www.al-monitor.com/originals/2022/03/israels-first-digital-bankopens-business

218 https://www.ft.com/content/7f2a7677-78f5-4a1b-92ec-fed3c910800e

219 https://www.reuters.com/technology/africas-banks-take-telcos-battleupwardly-mobile-money-2021-12-09/

220 https://medium.com/m2p-yap-fintech/gametech-a-rising-star-in-the-fintechworld-8915cc9adf9e

221 https://thefintechtimes.com/gametech-big-market/

222 https://www.pocketgamer.biz/special-report/71493/region-focus-a-deep-diveinto-the-mena-games-industry/

223 https://www.pocketgamer.biz/special-report/71493/region-focus-a-deep-diveinto-the-mena-games-industry/

224 https://thefintechtimes.com/gametech-ludiqueworks-and-dmarket-in-viewfrom-the-top/

225 https://www2.deloitte.com/content/dam/Deloitte/us/Documents/processand-operations/us-the-israeli-video-games-ecosystem.pdf

226 https://thefintechtimes.com/an-overview-and-potential-of-gametech-in-themiddle-east-and-africa-region/

227 https://www.dailysabah.com/business/tech/turkey-gets-another-unicorn-asdream-games-valuation-hits-1b

228 https://www.welcometothejungle.com/en/articles/turkey-gaming-sector-istanbul

229 https://www.wamda.com/2019/12/untapped-opportunity-esports-mena

230 https://www.albawaba.com/business/saudi-arabia-launches-10-millionesports-charity-tournament-combat-covid-19-1352721

231 https://www.entrepreneur.com/article/425475

232 https://thefintechtimes.com/can-the-metaverse-accelerate-economicdevelopment-for-emerging-economies/

233 https://thefintechtimes.com/an-overview-and-potential-of-gametech-in-themiddle-east-and-africa-region/

234 https://www.getsmarter.com/blog/market-trends/how-fintech-has-affectedthe-wealth-management-sector/

235 https://www.getsmarter.com/blog/market-trends/how-fintech-has-affectedthe-wealth-management-sector/

236 https://issuu.com/newworldwealth/docs/me_2021

237 https://www.khaleejtimes.com/business/uae-to-attract-the-highest-numberof-millionaires-globally

238 https://atalayar.com/en/content/new-report-wealth-africa-reveals-just-fivecountries-hold-50-continents-total-wealth 239 https://gulfbusiness.com/the-future-of-wealthtech-in-the-gcc/ 240 https://theorg.com/iterate/four-companies-shaping-africas-wealthtech-ecosystem 241 https://theorg.com/iterate/four-companies-shaping-africas-wealthtech-ecosystem 242 https://theexchange.africa/africa/wealthtech-africas-secure-invest-funds-digitally/ 243 https://theorg.com/iterate/four-companies-shaping-africas-wealthtech-ecosystem 244 https://member.fintech.global/2022/01/19/fintech-investment-in-africanearly-quadrupled-in-2021-driven-by-paytech-and-lending- deals/ 245 https://www.ndtv.com/business/cryptocurrency-in-africa-here-s-all-youneed-to-know- 2956793#:~:text=In%20October%202021%20Nigeria%20 became,a%20digital%20currency%20named%20eNaira.

246 https://thefintechtimes.com/digital-tokens-whos-trailblazing-asiasdevelopment-of-central-bank-digital-currencies/

247 https://www.centralbanking.com/central-banks/currency/digitalcurrencies/7950796/central-african-republic-launches-crypto-asset

248 https://coingeek.com/uae-to-license-digital-currency-firms-as-local-marketskyrockets-by-1500/

249 https://www.centralbank.ae/sites/default/files/2020-11/Aber Report 2020 - EN_4.pdf

250 https://thefintechtimes.com/fintech-and-economy-middle-east-and-africa-in2021-and-predictions-for-2022/

251 https://www.aljazeera.com/economy/2022/4/27/bitcoin-is-now-officialcurrency-in-central-african-republic#:~:text=The%20Central%20African%20 Republic%20has,the%20world%20to%20do%20so.

252 https://go.chainalysis.com/rs/503-FAP-074/images/Geography-ofCryptocurrency-2021.pdf

253 https://blog.chainalysis.com/reports/2020-global-cryptocurrencyadoption-index-2020/

254 https://go.chainalysis.com/rs/503-FAP-074/images/Geography-ofCryptocurrency-2021.pdf

255 https://www.al-monitor.com/originals/2022/04/report-one-third-israelis-andemiratis-own-cryptocurrency

256 https://go.chainalysis.com/rs/503-FAP-074/images/Geography-ofCryptocurrency-2021.pdf

257 https://www.weforum.org/agenda/2021/09/what-are-the-implications-ofwidespread-cryptocurrency-adoption-in-africa/

258 https://www.voanews.com/a/africa_cryptocurrency-booming-among-kenyanfarmers/6208732.html

259 https://www.fool.com/investing/2022/04/03/why-lemonade-is-using-cryptoto-insure-african-far/

260 https://twitter.com/Lemonade_Inc/status/1512104511321808897

261 https://thefintechtimes.com/which-countries-ban-cryptocurrencies/ 262 https://cointelegraph.com/news/bitcoin-not-a-currency-south-africa-toregulate-crypto-as-financial-asset

263 https://thefintechtimes.com/overview-of-digital-currencies-andcryptocurrencies-in-the-middle-east-and-africa/

264 https://www.finance-monthly.com/2019/11/open-banking-is-going-globalwith-87-of-countries-having-open-apis/

265 https://gocardless.com/guides/posts/open-banking-around-the-world/

266 https://gocardless.com/guides/posts/open-banking-around-the-world/ 267 https://thefintechtimes.com/country-reports/ 268 https://www.sama.gov.sa/en-US/Documents/Open_Banking_Policy-EN.pdf 269 https://www.dlapiper.com/en/uk/insights/publications/2021/04/africaconnected-issue-6/open-banking-in-africa-after-covid19/ 270 https://www.pymnts.com/emea/2022/state-of-open-banking-in-europe-africaand-the-middle-east/ 271 https://www.mastercard.com/news/perspectives/2022/open-banking-inafrica-mono/ 272 https://ibsintelligence.com/blogs/the-future-of-fintechs-and-open-bankingin-africa/ 273 https://thefintechtimes.com/uk-open-banking-adoption-is-on-the-riseaccording-to-new-yapily-research/

274 https://gocardless.com/guides/posts/open-banking-around-the-world/ 275 https://thefintechtimes.com/can-open-banking-be-implemented-across-themiddle-east-and-africa/

276 https://www.globenewswire.com/news-release/2022/03/23/2408273/28124/en/ Africa-Middle-East-Embedded-Finance-Market- Investment-OpportunitiesReport-2022-Market-is-Expected-to-Grow-by-45-3-to-Reach-10-359-2-Millionin-2022-Forecast-to-2029.html 277 https://www.arabianbusiness.com/ opinion/banking-as-a-service-7-trillion-opportunity

278 https://www.zawya.com/en/business/fintech/interview-baas-represents-a7trln-opportunity-finastra-middle-east-ifcgu0l0

279 https://www.euronews.com/next/2022/07/13/fintech-will-it-replacetraditional-banks

280 https://thefinancialbrand.com/146847/why-apples-embedded-bnpl-productcould-have-major-banking-impact/

281 https://www.arabianbusiness.com/opinion/banking-as-a-service-7-trillionopportunity

282 https://techcabal.com/2022/04/04/the-next-wave-what-can-embeddedfinance-do-for-african-businesses/

283 https://www.fintechfutures.com/2022/04/why-embedded-finance-is-the-nextbig-thing/

284 https://u.ae/en/information-and-services/business/crowdfunding

285 https://www.abaccelerator.co/a-birds-eye-view-on-the-state-of-p2p-lendingin-mena/ 286 https://www.ifc.org/wps/wcm/connect/09012193-bbca-4d8b-8b3f2322eda6d9de/IFC+Report_Final.pdf?MOD=AJPERES&CVID=jXA.xEV 287 https://www.abaccelerator.co/a-birds-eye-view-on-the-state-of-p2plending-in-mena/ 288 https://www.abaccelerator.co/a-birds-eye-view-on-the-state-of-p2plending-in-mena/ 289 https://lending-times.com/2018/01/23/an-overview-of-african-alternative-lending/ 290 https://lenderkit.com/blog/crowdfunding-in-africa/ 291 https://www.strategyand.pwc.com/m1/en/ideation-center/blog/ crowdfunding-in-mena.html

292 https://u.ae/en/information-and-services/business/crowdfunding 293 https://www.oecd-ilibrary.org/sites/824a4b05-en/index.html?itemId=/ content/component/824a4b05-en

294 https://ceelegalmatters.com/turkey/19375-crowdfunding-in-turkey-in-lightof-current- regulations#:~:text=The%20first%20legislation%20on%20 crowdfunding,(CMB)%20for%20crowdfunding%20platforms. 295 https://www.fsdkenya.org/blogs-publications/blog/m-shwari-vs-kcbm-pesa-convergence-or-divergence/

296 https://developingtelecoms.com/telecom-technology/financial-services/13401mtn-and-jumo-promise-mobile-lending-boost-for- ugandans.html 297 https://www.fintech.coffee/research/93-south-africa

298 https://blog.hellozai.com/the-outlook-for-the-global-financial-technologyfintech-industry 299 https://www.gtreview.com/news/mena/uae-added-to-financial-crime-greylist-though-officials-cite-significant-progress/ 300 https://www.mondaq.com/money-laundering/1150330/mauritius-removedfrom-the-eu-list-of-high-risk-third-countries-eu-blacklist

301 https://fintechnews.ae/5015/fintech/regtech-in-the-middle-east/ 302 https://fintechnews.ae/5015/fintech/regtech-in-the-middle-east/ 303 https://www.adgm.com/media/announcements/fsra-launches-regtech-initiatives 304 https://member.regtechanalyst.com/six-of-the-top-10-regtech-deals-outsideof-north-america-and-europe-were-raised-by-israeli- companies/

305 https://www.cio.com/article/350300/regulatory-tech-aiming-to-streamlinecompliance-makes-inroads-in-africa.html

306 https://thefintechtimes.com/overview-of-insurance-and-insurtech-in-africa/ 307 https://www.axcoinfo.com/regions/middle-east-africa/israel/ 308 https://briterbridges.com/stories/2022/2/19/insurtech-landscape-in-africa 309 https://thefintechtimes.com/overview-of-insurance-and-insurtech-in-africa/ 310 https://www.zurich.com/-/media/project/zurich/dotcom/sustainability/docs/ the-role-of-insurance-in-middle-east-north- africa.pdf?rev=f5592144a1b74b52 815712770fbd9b70&hash=0F4F82A0E9B16AB0F6DA94E1E747C2BA 311 https://www.cigna-me.com/en/knowledge/health-insurance-lawdubai#:~:text=The%20Dubai%20health%20insurance%20law,required%20 to%20have%20health%20insurance.

312 https://www.bloomberg.com/news/articles/2022-05-19/nigeria-s-healthinsurance-law-targets-83m-vulnerable-citizens 313 https://insurtechdigital.com/insurtech/insurtech-platforms-set-boom-uae 314 https://thefintechtimes.com/insurance-insurtech-and-wider-fintechpartnerships-in-the-middle-east-africa/

315 https://www.trtworld.com/magazine/turkey-s-ai-roadmap-looks-to-boosteconomy-and-add-thousands-of-jobs-49435

316 https://www.turnerandtownsend.com/en/perspectives/data-centre-costindex-2020/data-centres-in-the-middle-east/

317 https://www.economist.com/middle-east-and-africa/2021/12/04/datacentres-are-taking-root-in-africa

318 https://www.turnerandtownsend.com/en/perspectives/data-centre-costindex-2020/data-centres-in-africa/

319 https://thefintechtimes.com/get-to-grips-with-artificial-intelligence-inafrican-fintech/

320 https://www.wam.ae/en/details/1395303067141

321 https://www.digitaldubai.ae/initiatives/blockchain

322 https://coingeek.com/middle-east-blockchain-expansion-why-dubai-is-thenew-hotbed-for-blockchain-and-bitcoin/

323 https://thefintechtimes.com/how-the-uae-has-been-leading-in-digitaltransformation/

324 https://www.zawya.com/en/economy/gcc/new-study-reveals-that-uae-ismost-competitive-economy-in-the-arab-world-dby7mp31

325 https://www.globalxetfs.com/cybersecurity-in-israel-fortifying-digitaldefenses-amid-elevated- risks/#:~:text=Israel's%20cybersecurity%20sector%20 amassed%20%248.84,comparison%20to%202020's%20%242.75%20 billion.&text=Gl obally%2C%2040%25%20of%20private%20 investments,small%20size%20of%20the%20country.

326 https://www.globalxetfs.com/cybersecurity-in-israel-fortifying-digitaldefenses-amid-elevated- risks/#:~:text=Israel's%20cybersecurity%20sector%20 amassed%20%248.84,comparison%20to%202020's%20%242.75%20 billion.&text=Gl obally%2C%2040%25%20of%20private%20 investments,small%20size%20of%20the%20country.

327 https://www.marketwatch.com/press-release/middle-east-and-africa-roboadvisory-market-latest-trends-business-boosting-strategies- cagr-statusgrowth-opportunities-and-forecast-2022-2031-2022-07- 14?mod=search_ headline#:~:text=Robo%2Dadvisory%20market%20of%20the,USD%203.80%20 Bn%20by%202023.

328 https://www.imarcgroup.com/robo-advisory-market

329 https://www.itp.net/business/uae-to-attract-global-talents-with-ai-andcoding-licence-launch

330 http://www.news.cn/english/2021-11/19/c_1310319385.htm

331 Worldbank Country Profiles (each of the 23 countries)

332 Times Higher Education country profiles (most of the 23 countries with available data)

333 https://data.worldbank.org/indicator/SE.TER.ENRR?end=2019&locations=UG &start=1971&view=chart

334 https://tradingeconomics.com/united-arab-emirates/school-enrollmenttertiary-percent-gross-wb-data.html

335 https://tradingeconomics.com/lebanon/percentage-of-enrolment-in-tertiaryeducation-in-private-institutions-percent-wb- data.

html#:~:text=Percentage%20of%20enrolment%20in%20tertiary%20 education%20in%20private%20institutions%20(%25),compiled% 20from%20 officially%20recognized%20sources.

336 https://www.ceicdata.com/en/nigeria/education-statistics/ng-schoolenrollment-tertiary--gross

337 https://www.oecd-ilibrary.org/docserver/bf1a85fe- en.pdf?expires=1656324310 &id=id&accname=guest&checksum=C46C56D348D6D84EDC6D06027008259A 338 https://magnitt.com/ 339 https://www.gemconsortium.org/report/gem-2019-2020-global-report 340 https://worldpopulationreview.com/countries/countries-by-gdp 341 http://hdr.undp.org/en/content/download-data 342 https://www.crunchbase.com/ 343 https://vc4a.com/ 344 https://startupuniversal.com/country/uganda/ 345 http://documents1.worldbank.org/curated/en/905101503998069531/ pdf/119132-REVISED-40p-Dar-es-Salaam-ecosystem-digital- 002.pdf 346 https://digestafrica.com/the-most-funded-startups-inrwanda#:~:text=There%20are%20a%20variety%20of,of%20Rwanda%20to%20 promote%20entrepreneurship. 347 https://euromenaconsulting.com/ insight-details- 225#:~:text=Within%20just%20a%20few%20years,and%20 many%20other%20ecosystem%20players. 348 https://tracxn.com/ 349 https://mcit.gov.eg/Upcont/Documents/Reports%20and%20 Documents_26102021000_Egyptian-Startup-Ecosystem-Report-2021.pdf 350 https://www.forbes.com/sites/forbesbusinesscouncil/2021/07/14/learningfrom-israels-successful-innovation- ecosystem/?sh=325117c738d1 351 https://www.startupbahrain.com/

352 https://theblockchaintest.com/uploads/resources/Bahrain%20FinTech%20 bay%20-%20FinTech%20Ecosystem%20Report%20-%202022%20Feb.pdf

353 https://www.google.com/url?q=https://www.timesofisrael.com/israeli-techcompanies-raised-25-6-billion-in-extraordinary-2021-report/&sa=D&source=e ditors&ust=1658483824906034&usg=AOvVaw1O3lZc8ohLpVfJ4gYe4ym9

354 https://www.statista.com/statistics/1295524/turkey-fintech-startup-numberby- activity/#:~:text=The%20total%20number%20of%20fintech,with%20 over%20200%20new%20startups. 355 https://fintechnews.ae/11766/ fintechegypt/egypt-among-top-4-fintech-ecosystems-in-africa/ 356 https://partechpartners.com/2021-africa-tech-venture-capital-report/ 357 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).

358 https://techpoint.africa/2022/05/12/fintech-startups-innigeria#:~:text=There%20are%20at%20least%20150,fintech%20startups%20 at%20over%20200. 359 https://thebftonline.com/2022/03/17/ghanas-financialtechnology-fintech-state-of-play-2022/ 360 https://www.uncdf.org/article/5262/key-findings-of-fintech-landscape-in-rwanda

361 https://partners.wsj.com/qatar-financial-centre/qatar-emerging-as-fintechgateway/#:~:text=More%20than%20600%20companies%2C%20 including,Qatar%20Financial%20Centre%20(QFC).

362 https://www.uncdf.org/Download/AdminFileWithFilename?id=14277 &cultureId=127&filename=100521uncdftanzaniafintechmappingrep ortpdf#:~:text=Under%20the%20above%20definition%2C%20 UNCDF,fintechs%20currently%20operating%20in%20Tanzania.

363 https://www.jbs.cam.ac.uk/wp-content/uploads/2020/08/2018-ccaf-fsdfintech-in-uganda.pdf

364 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. 365 https://investorsmag. net/2019/10/05/60-of-fintech-companies-operating-in-mauritius-still-in-aninfancy-stage/#:~:text=19%20fintech%20companies%20responded%20 to,favorable%20tax%20laws%20amongst%20others.

366 https://www.awesomefintech.com/country/ethiopia/

367 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 368 https://www.fintechfutures.com/2020/04/ saudi-arabias-fintech-sandbox-welcomes-nine-more-startups/#:~:text=The%20Saudi%20Arabian%20Monetary%20

Authority,fintechs%20into%20is%20regulatory%20sandbox.&text=The%20 sandb ox%20is%20home%20to,2030%20Financial%20Sector%20

Development%20Program.

369 https://www.tamimi.com/law-update-articles/central-bank-bahrain-cbblaunch-regulatory-sandbox-fintech-firms-2/

370 https://www.coindesk.com/policy/2022/02/14/israels-securities-regulatorychief-lays-out-crypto-plans/

371 https://fintech-egypt.com/sandbox/

372 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. 373 https://www.cbn.gov.ng/ out/2021/ccd/framework%20for%20regulatory%20sandbox%20operations.pdf

374 https://bitcoinassociation.net/centbees-minit-money-joins-south-africas-ifwgregulatory- sandbox/#:~:text=The%20sandbox%20was%20set%20 up,existing%20and%20developing%20regulatory%20frameworks. 375 https:// thefintechtimes.com/an-overview-of-regulatory-sandboxes-in-the-middleeast-and-africa-region/

376 https://beirutdigitaldistrict.com/blog/sandbox-agility-trust-the-fintechdisruption-in-lebanon

377 https://medium.com/sahara-ventures/tanzania-fintech-landscape-ad98d1fc2747

378 https://cointelegraph.com/news/ugandan-central-bank-u-turns-on-cryptowelcoming-firms-to-regulatory-sandbox

379 https://iclg.com/practice-areas/fintech-laws-and-regulations/ senegal#:~:text=capacity%20building%20measures.-,To%20the%20best%20 of%20our%20knowledge,is%20no%20regulatory%20sandbox%20option.

380 https://empowerafrica.com/regulatory-sandboxes-in-africa/

381 https://fintechlabs.com/115-fintech-unicorns-of-the-21st-century-changes-tothe-list-october-2020/

382 https://guardian.ng/technology/nigeria-produces-five-of-seven-unicorns-in-africa/

383 https://qz.com/africa/2032255/africas-4-1b-fintech-unicorns-could-pave-theway-for-startups/

384 https://blog.cfte.education/fintech-unicorns-in-israel-full-list/ 385 https://www.arabnews.com/node/2087876/business-economy

386 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

387 https://www.google.com/url?q=https://thefintechtimes.com/country- reports/ &sa=D&source=editors&ust=1658483714635843&usg=AOvVaw3Rkc Sx_-84FleewqcshdmS 388 https://www.google.com/url?q=https://www. arabnews.com/node/2006581/business- economy&sa=D&source=editors&us t=1658483792072461&usg=AOvVaw3IvJQ3jhFVix4EOQMUjciQ

389 https://www.google.com/url?q=https://www.investmentmonitor.ai/uae/ the-age-of-fintech-in-the- uae&sa=D&source=editors&ust=1658483849879486 &usg=AOvVaw2e2n1MUNUBb_mt6Pd4C0sJ

390 https://www.google.com/url?q=https://fintechsaudi.com/wp- content/ uploads/2021/09/FintechSaudi_AnnualReport_20_21E1.pdf&sa=D&source=e ditors&ust=1658483849880535&usg=AOvVaw1mgB JtUTmJiZTzNpK8hhLe

391 https://www.google.com/url?q=https://www.fintech- aviv.com/&sa=D&source =editors&ust=1658483849882754&usg=AOvVaw3S5xxU9psZ7zve99hg7r_8

392 https://www.cbfo.gov.tr/sites/default/files/2021-12/the-state-of-fintechecosystem-in-turkiye-2021.pdf

393 https://www.egypttoday.com/Article/3/114247/Egypt-s-startups-raise-491macross-147-transactions-hitting-all

394 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. 395 https://startupstash.com/kenyanstartups/#:~:text=How%20Many%20Startups%20Are%20There,1%2C000%20 start%2Dups%20in%20Kenya. 396 https://tradingeconomics.com/ethiopia/ school-enrollment-tertiary-percent-gross-wb-data.html#:~:text=School%20 enrollment%2C%20tertiary%20(%25%20gross)%20in%20Ethiopia%20was%20 reported%20at,compiled%20fr om%20officially%20recognized%20sources.

397 https://thefintechtimes.com/fintech-landscape-in-ethiopia-in-2022/ 398 https://economics.creditlibanais.com/Article/211158#en

399 https://www.bahrainfintechbay.com/publications

400 https://thefintechtimes.com/an-overview-of-regulatory-sandboxes-in-themiddle-east-and-africa-region/

401 https://thefintechtimes.com/bahrains-cashless-payments-surged-by-65-in-august/ 402 https://thefintechtimes.com/country-reports/

403 https://www.bahrainfintechbay.com/publications

404 https://thefintechtimes.com/expo-2020-dubai-financial-services-fintech-andwider-digital-in-saudi-arabia-and-bahrain/

405 https://thefintechtimes.com/bahrains-cashless-payments-surged-by-65-in-august/

406 https://thefintechtimes.com/the-fintech-landscape-of-bahrain-in-2022/

407 https://thefintechtimes.com/batelco-becomes-the-first-telecom-company-inthe-gcc-to-receive-licenses-for-open-banking/

408 https://theblockchaintest.com/uploads/resources/Bahrain%20FinTech%20 bay%20-%20FinTech%20Ecosystem%20Report%20-%202022%20Feb.pdf

409 https://thefintechtimes.com/fintech-egypt-release-first-of-its-kind-reportrevealing-fintech-growth-in-the-egyptian-market/

410 https://thefintechtimes.com/how-the-largest-country-in-the-middle-east-andthe-third-in-africa-is-ideal-fertile-ground-for-fintech- growth/

411 https://fintech-egypt.com/Why-Egypt-is-a-promising-market-for-FinTechInvestments-Report.pdf

412 https://fintech-egypt.com/Why-Egypt-is-a-promising-market-for-FinTechInvestments-Report.pdf

413 https://www.cbe.org.eg/en/Pages/HighlightsPages/Egypt-FinTech-LandscapeReport-2021_1.aspx

414 https://thefintechtimes.com/the-fintech-landscape-of-egypt-in-2022/

415 https://www.uncdf.org/article/7399/building-ethiopias-digital-financialservices-ecosystem-barriers-and-opportunities

416 https://nbebank.com/nbe-issues-directive-to-license-authorize-paymentinstrument-issuers-2/

417 https://mint.gov.et/wp-content/uploads/2022/01/Summary_of_Digital_ Strategy_Final_English1.pdf

418 https://ethiopianbusinessreview.net/digital-transaction-prospects/

419 https://fintechnews.ae/7962/ethiopia/ethiopian-fintech-scene-shows-greatpromise-as-africas-next-fintech-hub/

420 https://www.statista.com/outlook/dmo/fintech/ethiopia

421 https://qz.com/africa/2175298/why-ethiopias-local-fintechs-are-worried/#:~:text= History%20of%20fintech%20in%20Ethiopia&text=Until%20recently%2C%20 fintechs%20were%20barred,that%20opened%20up%20the%20sector.

422 https://thefintechtimes.com/fintech-landscape-in-ethiopia-in-2022/

423 https://practiceguides.chambers.com/practice-guides/fintech-2022/ghana/ trends-and-developments

424 https://theconversation.com/mobile-money-service-quality-whats-importantto-customers-in-ghana-175663

425 https://www.gsma.com/mobilefordevelopment/blog/mobile-money-can-drivethe-financial-inclusion-of-persons-with-disabilities-in- ghana/

426 https://thefintechtimes.com/overview-of-key-fintech-hubs-across-the-middleeast-and-africa/

427 https://nca.org.gh/wp-content/uploads/2021/11/Key-NCA-Projects-2018.pdf

428 https://allafrica.com/stories/202205050084.html

429 https://www.worldbank.org/en/news/press-release/2022/04/28/afw-worldbank-provides-200-million-to-accelerate-ghana-digital- transformationagenda-for-better-jobs

430 https://www.theafricareport.com/189934/why-is-ghanas-fintechtax-not-finding-favour/

431 https://thefintechtimes.com/ghipss-launches-bank-wide-ghanapay-mobilemoney-service/

432 https://itweb.africa/content/GxwQDM1ZNggqlPVo

433 https://techcrunch.com/2022/03/02/after-raising-4-million-emtech-supportscentral-banks-across-africa-the-caribbean-to-deploy- regulatory-sandboxes/ 434 https://thebftonline.com/2022/03/17/ghanas-financial-technologyfintech-state-of-play-2022/

435 https://thefintechtimes.com/fintech-landscape-of-ghana-2022/ 436 https://www.timesofisrael.com/33-unicorns-and-25b-in-fundingisraeli-tech-sector-sets-new-records-in-2021/

437 https://www.viola-group.com/wp-content/uploads/2022/05/2021Fintech-Viola-Report_N-v5.pdf

438 https://www.viola-group.com/violanotes/fintech-israels-growth-enginedisproportionate-growth/

439 https://www.rapyd.net/company/news/press-releases/rapydcompletes-acquisition-of-neat/ 440 https://www.viola-group.com/wp-content/uploads/2022/05/2021Fintech-Viola-Report_N-v5.pdf

441 https://thefintechtimes.com/bank-of-israel-drafts-new-regulationsurrounding-virtual-currencies/

442 https://blogs.timesofisrael.com/israel-tax-authority-decidesnfts-are-taxable-assets/

443 https://www.al-monitor.com/originals/2022/04/report-one-third-israelis-andemiratis-own- cryptocurrency#:~:text=In%20March%2C%20Israel's%20Bank%20 Leumi,million%20by%20Canada's%20Wellfield%20Technologies. 444 https:// www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/20-6-22.aspx

445 https://thefintechtimes.com/the-bank-of-israel-weighs-up-thepros-and-cons-of-cbdcs-in-latest-paper/ 446 https://www.timesofisrael.com/spotlight/israels-open-bankingreform-kicks-off-in-june/ 447 https://www.statista.com/statistics/1129134/share-of-active-fintechcompanies-in-israel-by-subsector/ 448 https://thefintechtimes.com/israel-and-its-fintech-ecosystem-2022/ 449 http://jsf.org/sites/default/files/EN Jordanian Expatriates in the Gulf.pdf 450 https://thefintechtimes.com/overview-of-key-fintech-hubs-acrossthe-middle-east-and-africa/ 451 https://andp.unescwa.org/plans/1160 452 https://www.cbj.gov.jo/EchoBusv3.0/SystemAssets/PDFs/Financial Inclusion Report 2018 -2020.pdf 453 https://www.fintechfutures.com/2022/02/digital-first-bank-foryouth-linc-launches-in-jordan/ 454 https://assets.kpmg/content/dam/kpmg/jo/pdf/2022/bankingperspectives-jordan-2022.pdf

455 https://assets.kpmg/content/dam/kpmg/jo/pdf/2022/bankingperspectives-jordan-2022.pdf 456 https://www.cbj.gov.jo/EchoBusV3.0/SystemAssets/9328fddf-3f3d-40d8-9ed3d98bbc89db20.pdf

457 https://www.statista.com/outlook/dmo/fintech/jordan 458 https://sites.tufts.edu/journeysproject/mobile-money-jordan/ 459 https://sites.tufts.edu/journeysproject/mobile-money-jordan/ 460 https://thefintechtimes.com/the-kingdom-of-jordans-fintech-landscape-in-2022/ 461 https://news.microsoft.com/en-xm/2022/03/30/microsoft-reinforces-itscommitment-to-developing-african-tech-talent/ 462 https://techcrunch.com/2022/04/06/visa-unveils-first-innovation-hub-inafrica-to-drive-product-development/ 463 https://news.microsoft.com/en-xm/2022/03/30/microsoft-reinforces-itscommitment-to-developing-african-tech-talent/ 464 https://thefintechtimes.com/overview-of-key-fintech-hubs-across-the-middleeast-and-africa/ 465 https://qz.com/africa/2175765/the-big-deal-vc-funding-in-africa-is-up-150percent-from-q1-2021-to-q1-2022/ 466 https://thefintechtimes.com/expo-2020-dubai-financial-services-fintech-andwider-digital-in-kenya/ 467 https://medium.com/nearprotocol/near-launches-kenya-regional-hub-tosupport-blockchain-projects-and-talent-in-africa- a721f09beda2 468 https://thefintechtimes.com/kenya-central-bank-pushes-digital-paymentswith-the-launch-of-new-strategy/ 469 https://africa.businessinsider.com/local/markets/central-bank-of-kenya-cbkdoubles-down-on-its-position-on-flutterwave-and-chipper/yky3h2g 470 https://hbr.org/2021/02/kenya-is-becoming-a-global-hub-of-fintech-innovation 471 https://thefintechtimes.com/kenya-central-bank-pushes-digital-paymentswith-the-launch-of-new-strategy/ 472 https://thefintechtimes.com/country-reports/ 473 https://hbr.org/2021/02/kenya-is-becoming-a-global-hub-of-fintechinnovation 474 https://tellimer.com/article/the-ultimate-guide-to-kenya-fintech 475 https://thefintechtimes.com/kenya-and-its-fintech-ecosystem-in-2022/ 476 https://www.researchgate.net/publication/357551866_FinTech_in_Kuwait_a_ survey_study/link/61d3ae48b8305f7c4b1ee4e4/download 477 https://datareportal.com/reports/digital-2021-kuwait 478 https://www.ipsos.com/en-kw/digital-adoption-during-pandemic-kuwait 479 https://thefintechtimes.com/country-reports/ 480 https://www.wamda.com/2019/01/kuwait-announces-200m-techfund#:~:text=Kuwait%20has%20launched%20an%20initiative, Al%2DSabah%20said%20on%20Sunday. 481 https://oxfordbusinessreview.org/ kuwait-and-the-fintech-industry-aspirations-and-obstacles/ 482 https://thefintechtimes.com/country-reports/ 483 https://www.zawya.com/en/business/central-bank-launches-kassipas-part-of-kuwait-national-payments-system-project-p7lsk3sq 484 https://oxfordbusinessreview.org/kuwait-and-the-fintech-industryaspirations-and-obstacles/ 485 https://fintechnews.ae/3126/kuwait/kuwait-bank-is-using-ripple-forimmediate-cross-border-transactions-nbk-direct-remit/

486 https://oxfordbusinessreview.org/kuwait-and-the-fintech-industryaspirations-and-obstacles/ 487 https://www.statista.com/statistics/1268751/kuwait-fintechrate-by-feature-and-age/ 488 https://www.thenationalnews.com/business/2022/07/26/lebanons-inflationhits-210-in-june-as-government-formation-stalls/ 489 https://thefintechtimes.com/how-can-lebanons-fintech-and-wider-financialservices-industry-thrive-in-2020-and-beyond/ 490 https://www.unlock-bc.com/news/2021-03-04/lebanons-banking-sector-isdead-but-digital-wallets-and-digital-currencies-are-coming- to-life/ 491 https://thefintechtimes.com/country-reports/ 492 https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=LB 493 https://www.unlock-bc.com/news/2021-03-04/lebanons-banking-sector-isdead-but-digital-wallets-and-digital-currencies-are-coming- to-life/ 494 https://www.gfmag.com/magazine/april-2022/lebanon-embrace-digitalfinance-survival-strategy

495 https://www.al-monitor.com/originals/2022/02/lebanese-turncryptocurrency-economy-tanks 496 https://www.mondaq.com/technology/924152/fintech-comparative-guide 497 https://www.lexology.com/library/detail.aspx?g=ed6ce9cf-a7f9-4703-b7eb5490ceab5a79

498 https://www.zawya.com/en/press-release/companies-news/the-world-fastestgrowing-open-api-fintech-codebase-technologies- partners-with-visa-q5yann29 499 https://techfugees.com/all_news/how-refugees-in-lebanon-canbenefit-from-cryptocurrency-and-blockchain-to-exchange-moneyand- increase-financial-inclusion/

500 https://thefintechtimes.com/fintech-landscape-of-lebanon-2022/ 501 https://www.edbmauritius.org/ict

502 https://home.kpmg/us/en/home/insights/2022/01/tnf-mauritius-removalfrom-eu-list-of-high-risk-third-countries.html

503 https://www.edbmauritius.org/ict

504 https://www.business-magazine.mu/rencontre/parole-dexperts-rencontre/ mauritius-and-fintech-a-disruptive-challenge-or- opportunity/?amp=1 505 https://fintechnews.africa/40124/mauritius/mauritius-government-ramp-upeffort-to-building-up-fintech-ecosystem/

506 https://www.dentons.com/en/insights/articles/2022/june/9/mauritiusnational-budget-legal-highlights-2022-2023

507 https://www.mondaq.com/financial-services/1111000/fsc-issues-thefinancial-services-crowdfunding-rules-2021

508 https://www.business-magazine.mu/rencontre/parole-dexperts-rencontre/ mauritius-and-fintech-a-disruptive-challenge-or- opportunity/?amp=1 509 https://fintechnews.africa/40124/mauritius/mauritius-government-ramp-upeffort-to-building-up-fintech-ecosystem/ 510 https://mauritiusfintech.org/blog/mauritius-fintech-ecosystemmapping-2019-exercise/

511 https://www.moroccoworldnews.com/2021/04/340874/morocco-has-highestpopulation-without-access-to-banking-institutions

512 https://www.pymnts.com/news/international/2021/africas-fintech-startupsare-booming-except-in-morocco/

513 https://www.moroccoworldnews.com/2022/06/349794/only-1-of-moroccansuse-digital-remittances-tools-despite-low-cost

514 https://www.trade.gov/country-commercial-guides/morocco- telecommunica tions#:~:text=Morocco's%20mobile%20market%20is%20one,penetration%20 rate%20of%20137.5%20percent. 515 https://fintechnews.ae/8210/morocco/ morocco-emerges-as-third-largest-fintech-hub-in-the-arab-world/ 516 https://ma.visamiddleeast.com/en_MA/about-visa/newsroom/ press-releases/prl-14072021.html

517 https://www.jbs.cam.ac.uk/wp-content/uploads/2022/02/ccaf-2022-02fintech-regulation-in-mena.pdf

518 https://www.moroccoworldnews.com/2022/06/349794/only-1-of-moroccansuse-digital-remittances-tools-despite-low-cost 519 https://thefintechtimes.com/which-countries-ban-cryptocurrencies/ 520 https://fintechnews.ae/8210/morocco/morocco-emerges-as-third-largestfintech-hub-in-the-arab-world/ 521 https://thefintechtimes.com/fintech-landscape-in-morocco-2022/ 522 https://thefintechtimes.com/country-reports/ 523 https://techpoint.africa/2022/05/12/fintech-startups-in-nigeria

524 https://african.business/2022/05/technology-information/nigeriascryptocurrency-problem-has-central-bank-scrambling/ 525 https://www.connectingafrica.com/author.asp?section_id=761&doc_ id=767400&image_number=1

526 https://guardian.ng/technology/the-growth-of-smartphone-usage-innigeria/#:~:text=As%20it%20currently%20stands%2C%20Nigeria,voice%20 calls%20and%20text%20messages. 527 https://www.gsma.com/ mobilefordevelopment/wp-content/uploads/2022/03/Nigeria_CIU_R_WEB.pdf

528 https://qz.com/africa/2175765/the-big-deal-vc-funding-in-africa-is-up-150percent-from-q1-2021-to-q1-2022/

529 https://guardian.ng/technology/nigeria-produces-five-of-seven-unicorns-in-africa/ 530 https://thefintechtimes.com/nigeria-launches-its-cbdc-enaira/ 531 https://www.cbn.gov.ng/Out/2021/CCD/Volume 3 Number 2 CBN Update February 2021.pdf

532 https://african.business/2022/05/technology-information/nigeriascryptocurrency-problem-has-central-bank-scrambling/ 533 https://african.business/2022/05/technology-information/nigeriascryptocurrency-problem-has-central-bank-scrambling/ 534 https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2022/03/ Nigeria_CIU_R_WEB.pdf

535 https://thefintechtimes.com/overview-of-mobile-money-in-themiddle-east-and-africa/

536 https://www.mondaq.com/nigeria/fin-tech/1178360/buy-now-pay-laterfintechs-in-nigeria-some-market-entry-considerations

537 https://www.mondaq.com/nigeria/fin-tech/1187088/fintech- 2022#:~:text=The%20 most%20prevalent%20fintech%20business,crowdfunding%2C%20personal%20 finance%20and%20wealthtech.&text=The%20payments%20subsector%20of%20 the,from%20investors%20and%20regulators%20alike.

538 https://coinnewsextra.com/nigeria-ranks-first-in-real-time-and-digitalpayment-in-africa/ 539 https://tellimer.com/article/the-ultimate-guide-to-nigeria-fintech 540 https://thefintechtimes.com/nigerias-fintech-landscape-in-2022/ 541 https://datareportal.com/reports/digital-2021-oman

542 https://www.zawya.com/en/economy/gcc/oman-sees-249-risein-population-j98rqueq

543 https://www.omanobserver.om/article/1120336/business/banking/ promising-potential-for-open-banking-in-oman 544 https://fintechnews.ae/10731/oman/oman-jumps-on-open-banking-bandwagon/ 545 https://www.omanobserver.om/article/1107326/business/economy/ cbo-fintech-sandbox-initiative-receives-overwhelming-response 546 https://thefintechtimes.com/how-the-sultanate-of-oman-is-promotingfintech-and-wider-digital-transformation/ 547 https://www.theasianbanker.com/updates-and-articles/middle-east-openbanking-boosts-fintech-ecosystem 548 https://assets.kpmg/content/dam/kpmg/om/pdf-2021/10/ oman-banking-perspectives.pdf

549 https://thestartupscene.me/MenaEcosystems/Omantel-LaunchesMuscat-Innovation-Labs-to-Foster-Entrepreneurship 550 https://www.otf.om/ 551 https://www.statista.com/statistics/1267553/oman-fintech-usage-by-feature/ 552 https://thefintechtimes.com/oman-and-its-fintech-environment-in-2022/ 553 https://thefintechtimes.com/country-reports/ 554 https://thefintechtimes.com/qatar-a-new-destination-for-fintech-in-the-region/ 555 https://thefintechtimes.com/ethos-invest-launch-sharia-compliant-andethical-fund-for-uk-smes-aiming-to-raise-1billion/ 556 https://fintech.qa/wp-content/uploads/2020/07/A-report-on-the-state-ofFinTech-in-Qatar-1-Oct-2021.pdf

557 https://fintech.qa/wp-content/uploads/2020/07/A-report-on-the-state-ofFinTech-in-Qatar-1-Oct-2021.pdf

558 https://thefintechtimes.com/qatar-a-new-destination-for-fintech-in-the-region/ 559 https://thefintechtimes.com/qatar-a-new-destination-for-fintech-in-the-region/ 560 https://thefintechtimes.com/qatar-national-bank-launchesopen-banking-platform/

561 https://thepeninsulaqatar.com/article/16/03/2022/qcb-studying-digitalcurrencies-and-digital-banking-official

562 https://www.al-monitor.com/originals/2022/06/qatar-partnersmeta-digital-economy

563 https://fintech.qa/wp-content/uploads/2020/07/A-report-on-the-state-ofFinTech-in-Qatar-1-Oct-2021.pdf

564 https://thefintechtimes.com/fintech-landscape-of-qatar-in-2022/

565 https://blog.mondato.com/rwanda-land-of-1-000-digital-contradictions/ 566 https://www.usaid.gov/sites/default/files/documents/Rwanda_Mobile_ Money_Report_Final_0.pdf

567 https://thefintechtimes.com/african-market-to-watch-a-road-to-economicdevelopment-with-rwanda-and-fintech/

568 https://african.business/2022/02/technology-information/rwanda-partnerswith-cchub-to-launch-fintech-innovation-project/

569 https://thefintechtimes.com/kigali-international-financial-centre-announcesthe-africa-fund-for-fintech-during-dubai-forum/

570 https://www.gsma.com/sotir/wp-content/uploads/2022/03/GSMA_State_of_ the_Industry_2022_English.pdf

571 https://www.newtimes.co.rw/news/top-10-initiatives-could-change-rwandasstart-ecosystem-2022

572 https://www.uncdf.org/article/5262/key-findings-of-fintech-landscape-inrwanda

573 https://thefintechtimes.com/rwanda-and-its-fintech-ecosystem-in-2022/ 574 https://thefintechtimes.com/building-the-foundation-for-a-strong-fintechecosystem-in-saudi-arabia/

575 https://walletfactory.com/blog/financial-inclusion-in-saudi-arabia/ 576 https://saudigazette.com.sa/article/622130

577 https://www.arabnews.com/node/2109006/business-economy 578 https://fintechsaudi.com/wp-content/uploads/2021/09/FintechSaudi_ AnnualReport_20_21E1.pdf

579 https://thefintechtimes.com/the-saudi-central-bank-completes-first-step-indeveloping-saudi-arabias-open-data-platform/

580 https://fintechsaudi.com/wp-content/uploads/2021/09/FintechSaudi_ AnnualReport_20_21E1.pdf

581 https://thefintechtimes.com/saudi-arabia-secures-position-as-the-menaregions-largest-digital-economy-with-6-4bn-investment/

582 https://thefintechtimes.com/saudi-arabias-contactless-adoption-rate-is-thehighest-in-mea-at-94-and-above-the-eu-average/

583 https://fintechsaudi.com/wp-content/uploads/2021/09/FintechSaudi_ AnnualReport_20_21E1.pdf

584 https://thefintechtimes.com/saudi-arabia-and-the-fintech-ecosystem-in-2022/ 585 https://www.france24.com/en/20190621-tech24-dakar-tech-hub-jfd19-womenentrepreneurship-startups-kitio-afua-osei-caysti 586 https://theconversation.com/digital-banking-is-the-in-thing-but-it-excludesmany-users-in-tanzania-and-senegal-180092 587 https://www.microsave.net/wp-content/uploads/2020/07/MSC_SE_ Landscape-study-1.pdf 588 https://african.business/2021/10/finance-services/senegal-ridesthe-wave-of-tech-success/ 589 https://thefintechtimes.com/overview-of-mobile-money-inthe-middle-east-and-africa/ 590 https://techcabal.com/2022/04/21/wave-gets-e-money-license/ 591 https://thefintechtimes.com/overview-of-mobile-money-in-themiddle-east-and-africa/ 592 https://www.gsma.com/sotir/wp-content/uploads/2022/03/GSMA_State_of_ the_Industry_2022_English.pdf 593 https://www.statista.com/statistics/510573/mobile-cellular-subscriptions-per100-inhabitants-in- senegal/#:~:text=This%20statistic%20depicts%20the%20 number,every%20100%20people%20in%202020. 594 https://iclg.com/ practice-areas/fintech-laws-and-regulations/senegal#:~:text=There%20is%20 no%20specific%20regulator,is%20regulated%20by%20Instruction%20no. 595 https://thefintechtimes.com/overview-of-key-fintech-hubs-acrossthe-middle-east-and-africa/

596 https://restofworld.org/2022/african-governments-cant-beboth-referees-and-players-in-consumer-fintech%EF%BF%BC/ 597 https://cointelegraph.com/news/one-man-s-plan-to-orangepill-a-nation-bitcoin-senegal

598 https://www.ecofinagency.com/finance/2504-43557-waemu-central-bankbceao-sets-up-fintech-promotion-bureau

599 https://www.uncdf.org/article/5302/quels-leviers-exploiterpour-acclrer-linnovation-digitale-au-sngal

600 https://thefintechtimes.com/fintech-landscape-of-senegal-2022/ 601 https://thefintechtimes.com/the-fintech-landscape-of-south-africa/ 602 https://thefintechtimes.com/episode-16-asian-expansion-south-africanfintech-opportunities/ 603 https://www.geopoll.com/blog/mobile-penetration-south-africa/ 604 https://www.engineeringnews.co.za/article/sa-telcos-moving-aggressively-toadd-fintech-offerings-to-mobile-money-base-2021-09-17 605 https://www.itweb.co.za/content/mQwkoM6PVRyv3r9A 606 https://qz.com/africa/2175765/the-big-deal-vc-funding-in-africa-is-up-150percent-from-q1-2021-to-q1-2022/ 607 https://disrupt-africa.com/2022/06/08/south-africa-is-a-startup-powerhousethat-leads-the-continent-for-exits-finds-new-report/ 608 https://thefintechtimes.com/buy-now-pay-later-bnpl-landscapein-the-middle-east-and-africa/ 609 https://www.globenewswire.com/en/news-release/2022/04/29/2432267/28124/en/ South-Africa-Buy-Now-Pay-Later-Market-Report- 2022-Regional-BNPL-Companiesare-Targeting-the-B2B-Segment-to-Expand-their-Business-in-South-Africa.html 610 https://www.linkedin.com/pulse/opportunity-lending-fintechssouth-africa-stella-jemeljanova/ 611 https://www.coindesk.com/policy/2022/07/13/south-african-central-bankreverses-course-on-crypto-regulation/ 612 https://tellimer.com/article/the-ultimate-guide-to-south-africa-fintech 613 https://thefintechtimes.com/fintech-landscape-of-south-africa-2022/ 614 https://www.uncdf.org/article/6789/mapping-the-tanzanianfintech-start-up-landscape 615 https://www.gsma.com/publicpolicy/wp-content/uploads/2021/12/ spec_tanzania_mm_report_02_22-1.pdf

616 https://african.business/2021/11/finance-services/boom-time-formobile-app-startups-in-tanzania/ 617 https://www.gsma.com/publicpolicy/wp-content/uploads/2021/12/ spec_tanzania_mm_report_02_22-1.pdf 618 https://www.uncdf.org/article/6789/mapping-the-tanzanianfintech-start-up-landscape 619 https://fintechnews.africa/40396/fintech-tanzania/tanzania-tosoon-have-a-central-bank-digital-currency/ 620 https://techcrunch.com/2022/01/27/tanzanian-fintech-nalaraises-10m-seed-to-build-revolut-for-africa/ 621 https://www.usaid.gov/tanzania/economic-growth-and-trade 622 https://www.uncdf.org/article/6789/mapping-the-tanzanianfintech-start-up-landscape 623 https://thefintechtimes.com/tanzania-and-its-fintech-ecosystem-in-2022/ 624 https://www.gsma.com/mobilefordevelopment/blog/exploring-the-risingtunisian-start-up-ecosystem/ 625 https://www.intechopen.com/chapters/73041 626 https://www.intechopen.com/chapters/73041 627 https://technext.ng/2022/06/29/egypt-raised-1-2bn-from-2019-2021/ 628 https://www.intechopen.com/chapters/73041 629 https://www.ft.com/content/165a4114-4b36-11e9-bde6-79eaea5acb64 630 https://www.ppro.com/countries/tunisia/ 631 https://fintechnews.ae/4032/fintech/north-africa-tunisia-algeria-morocco-fintech/ 632 https://datareportal.com/reports/digital-2021-tunisia 633 https://www.ppro.com/countries/tunisia/ 634 https://www.statista.com/statistics/1315551/share-of-population-owning-amobile-money-account-in-tunisia-by-gender/ 635 https://thearabweekly.com/e-commerce-has-grown-tunisia-pandemichurdles-remain 636 https://www.fintechfutures.com/2022/06/arab-tunisian-bank-live-withtemenos-core-banking-tech/ 637 https://thefintechtimes.com/fintech-landscape-of-tunisia-in-2022/ 638 https://www.reuters.com/markets/europe/turkey-caught-spiral-liracrises-2022-06-10/ 639 https://thefintechtimes.com/overview-of-digital-currencies-andcryptocurrencies-in-the-middle-east-and-africa/ 640 https://www.bloomberg.com/news/articles/2022-05-25/turkey-pushes-forbigger-say-over-crypto-market-with-draft-bills

641 https://www.cnbc.com/2021/04/26/turkish-bitcoin-exchange-vebitcoincollapses-amid-crypto-crackdown.html 642 https://www.mondaq.com/turkey/technology/915174/fintech-comparative-guide 643 https://www.cbfo.gov.tr/sites/default/files/2021-12/the-state-of-fintechecosystem-in-turkiye-2021.pdf 644 https://www.cbfo.gov.tr/en/fintech 645 https://www.cbfo.gov.tr/sites/default/files/2021-12/the-state-of-fintechecosystem-in-turkiye-2021.pdf 646 https://therecursive.com/turkey-created-6-unicorns-in-2-years-aninvestor-tells-what-s-the-secret/ 647 https://www.cbfo.gov.tr/sites/default/files/2021-12/the-state-of-fintechecosystem-in-turkiye-2021.pdf 648https://www.cbfo.gov.tr/sites/default/ files/2021-12/the-state-of-fintech-ecosystem-in-turkiye-2021.pdf 649 https://www.cbfo.gov.tr/sites/default/files/2021-12/the-state-of-fintechecosystem-in-turkiye-2021.pdf

650 https://www2.deloitte.com/content/dam/Deloitte/ug/Documents/ financial-services/FITSPA - Final Report_11FEB2022.pdf 651 https://www2. deloitte.com/content/dam/Deloitte/ug/Documents/financial-services/FITSPA - Final Report_11FEB2022.pdf 652 https://www2.deloitte.com/content/dam/ Deloitte/ug/Documents/financial-services/FITSPA - Final Report_11FEB2022. pdf 653 https://cioafrica.co/ugandan-fintech-spreads-wings-to-ethiopia/ 654 https://thefintechtimes.com/the-fintech-ecosystem-of-uganda/ 655 https://www.moec.gov.ae/en/-/fintech-en 656 https://www.dwtc.com/en/industry-insights-site/Pages/From-startup-toscaleup-a-UAE-fintech- journey.aspx#:~:text=%E2%80%8BAccording%20to%20 the%20UAE,a%20report%20from%20Mordor%20Intelligence. 657 https:// datareportal.com/reports/digital-2022-united-arab-emirates 658 https://www.wam.ae/en/details/1395302847749 659 https://www.paymentscardsandmobile.com/shift-report-aguide-to-the-middle-east-payments-industry/ 660 https://thefintechtimes.com/in-depth-analysis-of-abu-dhabiand-fintech-in-2020/ 661 https://thefintechtimes.com/fintech-digital-and-the-uae-2022-expo-2020-dubai/ 662 https://thefintechtimes.com/dubai-metaverse-strategy-attempts-to-place-themiddle-eastern-city-on-the-metaverse-map/ 663 https://fintechnews.ae/8914/abudhabi/uae-fintech-report-and-map-2021fintech-in-dubai-and-abu-dhabi/ 664 https://www.forbes.com/sites/ronshevlin/2022/01/19/bank-fintechpartnerships-are-under-performing-whats-going- wrong/?sh=6966b6ca559a 665 https://thefintechtimes.com/mashreq-invests-in-nymcard-as-part-of-venturefund-to-support-uae-fintech-ecosystem/

666 https://ir.westernunion.com/news/archived-press-releases/press-releasedetails/2021/Western-Union-Expands-Global-Ecosystem- with-Completion-ofInvestment-into-stc-Bank/default.aspx

667 https://ir.westernunion.com/news/archived-press-releases/press-releasedetails/2020/Western-Union-Advances-Its-Digital-Growth- Strategy-WithInvestment-in-stc-pay/default.aspx

668 https://techcrunch.com/2022/07/19/sudanese-fintech-bloom-nabs-6-5mbacked-by-y-combinator-gfc-and-visa/

669 https://thefintechtimes.com/mastercard-announces-various-partnerships-tobolster-digitisation-in-mea/ 670 https://thefintechtimes.com/alinma-bank-to-offer-twice-daily-settlements-tomenas-smbs-through-foodics-partnership/

671 https://www2.deloitte.com/xe/en/pages/financial-services/articles/ fintech-solutions.html

672 https://techcabal.com/2022/04/04/the-next-wave-what-can-embeddedfinance-do-for-african-businesses/ 673 https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/ publications/fintech-regulation-in-the-middle-east-and-north-africa/ 674 https://news.fintechnexus.com/trouble-in-pay-radise-surveys-show-risingbnpl-default-rates/ 675 https://www.thenationalnews.com/business/2021/11/10/uae-seeks-20unicorns-by-2031-and-launches-programme-to-back-smes/ 676 https://techcrunch.com/2022/07/10/fintechs-go-from-the-biggest-recipientsof-venture-dollars-in-2021-to-the-biggest-percentage-of- layoffs-in-2022/

Fintech Week London shines a light on the most important and exciting issues in financial technology, with a two-day conference at its core.

Traditional financial institutions come together with fintechs and other financial services companies in one of the world’s oldest and leading financial districts: London.

From high-street banks to challengers, technology giants to disruptors, this five-day event showcases the best that London and global fintech has to offer.

Learn more about Fintech Week London at www.fintechweek.london

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