Global investment in the fintech market is increasing every year– according to Innovative Finance; it reached £8.7bn in 2015. Alternative financial platforms like pee-to-peer lending and crowdfunding sites have become very common in the world of fintech, such as the US, UK, Southeast Asia and China. But this worldwide trend has not infiltrated the Middle East.
However, the Middle East is waking up to possibilities of the fintech market. As the regional government encourages fintech growth, the global fintech gap will be closed.
Although there is a few data about fintech ecosystem in the Middle East, Magnitt, a networking business for Middle Eastern start-ups, believes there are 54 fintech companies in North Africa and the Middle East, about 20 in the UAE alone. Despite the size of the sector, momentum is building and regional governments are working to encourage fintech growth.
A consensus is emerging among financial institutions and governments that nurturing fintech startups is beneficial for the region. In particular, the UAE is already showing signs of supporting fintech industry, as well as several early success stories. Abu Dhabi aims to be the Middle East’s fintech hotspot. Recently, Abu Dhabi’s Financial Services Regulatory Authority has proposed building a framework that will enable fintech startups to conduct their activities in a cost-effective and controlled environment.
To encourage fintech growth, the Middle East and North Africa (MENA set up a Regulatory Laboratory (RegLab). The aim of RegLab is to cater for the unique requirements and risks of fintech companies.
There are various fintech companies that have emerged in the Middle East. Some of these companies are:
PayFort is a payments processor that was started by Omar Soudodi. He founded the company when he was running Souq.com, an e-commerce site. According to Soudodi, the company processed over $1bn in payments last year.
Confounded by Moussas Beidas, Bridg is a payment solutions company. The Bridg app allows users to make payments using mobile, even if one of the mobiles is offline.
Founded in 2014 by Craig Moore, Beehive is a P2P lender. The startups lend to small business and boast of lending over $13m to-date.
Founded in 2012 by Abdallah Absi, Zoomaal’s mission is to “bring back Arab creativity.” The company focuses on rewards rather than equity or lending. It has launched more than 100 funding campaigns totaling more than $1.3 million for projects.
MadfooatCom is a bill payment and payment service firm that has created a platform for users to pay and inquire their bills in one location through their banks’ online channels.
Until recently, compareit4me.com focused only on comparing banking services and products in order to help new clients to select the best banking options. Much like their UK counterparts, their revenue came from financial institutions that paid for leads. However, two months ago, they launched a car insurance comparison platform that enables customers to compare instant vehicle insurance quote and buy online.
Today, the environment for a thriving fintech market is available. Now it’s up to financial institutions and Middle the East governments to keep fintech growing.