The current MENA fintech market is estimated at $2B and is expected to witness an annual growth of $125M until 2022, according to research company MENA Research Partners (MRP), with increasingly compelling business models of fintech expected to drive market growth further.
Going forward, when benchmarked against emerging markets, MENA is anticipated to experience a new era of fast growth. Fintech funding has been rapidly gaining traction in the past five years, reflecting investors’ rising interest in fintech opportunities in MENA. This has supported the proliferation of new fintech startups with the figure expected to reach 252 by 2020.
Anthony Hobeika, CEO at MRP says: “In the last six years, the landscape of major funding players has been changing. While in 2010 funding for fintechs was provided exclusively by venture capital firms, it is clear today that there is a shift to new funding vehicles such as accelerators, private equity institutions, corporation, banks and angel investors among others, highlighting the increased interest in fintech by a broader range of investors.”
In the early days, regional fintech startups were mainly specialised in payments activities. In 2015, the industry witnessed a major change with the emergence of startups in sectors such as lending and capital raising as well as remittances, wealth management, insurance, and blockchain-based solutions.
Hobeika concludes saying: “Fintech startups in MENA region are witnessing a pronounced expansion with the introduction of new technologies to serve the financial industry. Up until recently, banks considered fintech as a competitor but are now adopting what the sector needs to improve their own services. Banks are currently acquiring, partnering and also sponsoring fintech companies. As an example, some GCC banks collaborated with specialised fintech startups to implement the new VAT regulations.”