Egypts fintech funding expected to hit $296mln in 2021: Citi

ArabFinance: Egypts fintech funding is expected to hike by 919% Year on Year (YoY) in 2021, reaching an estimated $296 million, compared to the $29 million in 2020, according to Citis latest report Africa & Middle East FinTech & e-Commerce.

According to the report, fintech companies in countries like Egypt and Pakistan are on the cusp of gaining traction/adoption. Meanwhile, Nigeria and Kenya are seeing growing interest beyond digital payments into new forms of credit, open finance, and cryptocurrencies.

Lack of access to basic financial services and growing affordability of mobile phones/data has created structural opportunities for new startups to serve the underbanked through internet enabled business models, the report highlighted.

It also mentioned that the availability of risk capital and a supportive regulatory backdrop are further fuelling the fintech agenda across the region.

The report showed that fintech is booming globally, mentioning that 2021s annualised VC investments are up by 164% y-o-y, reaching escape velocity in the AME.

Furthermore, the report found out that Africa was a pioneer of mobile money adoption, the GCC is experimenting with new technologies such as blockchain and new products such as BNPL, but in much of the AME region cash remains king.

The report added that the AME is the region with the highest cash usage globally. According to Worldpay, cash accounted for over 50% of the AMEs point of sales (PoS) transactions; 2.5 times the global average.

According to MasterCard, cash accounts for more than 90% of transactions in Africa.

Citi expects that the AMEs growth in digital payment will continue at a high double-digit rate, especially in Africa, adding that among regional markets, the UAE is the most developed.

Regarding the current popularity of crypto currencies, the report mentioned that the MENA/Sub-Saharan Africa had the highest growth rates for P2P crypto trading volume in 2021 by region, 62% and 51%, respectively, and four of the top ten countries with the highest crypto adoption rates were from Africa.

Citi noted that the availability of capital and a supportive policy environment is being met by an increasing supply of fintech founders and tech talent, many of which have been trained internationally, who are heading home to build a digital future for their country.