Countries like the UK, China and the US are traditionally seen as the powerhouses of the fintech world, but it’s testament to the expanding global presence of this market that the Middle East and North Africa (MENA) region could be its next big growth engine.
Regional entrepreneurship platform Wamda and Jordan-based payments firm Payfort teamed up to produce the 2017 State of Fintech report, which predicted a boom in fintech innovation in this part of the world over the next three years.
The research showed that the MENA fintech marketplace expanded considerably between 2013 and 2015, with the number of start-ups more than doubling from 46 to 105. Up to 250 new businesses could be launched by 2020.
Payments is one of the biggest focuses for fintech ventures in the region, along with money lending and capital raising.
There are some clear local factors that are expected to fuel growth for firms in MENA nations, including a large unbanked population and an openness to innovation.
Omar Soudodi, managing director of Payfort, said: “SME lending stands at half of the global average; the volume of ecommerce is set to quadruple over five years; one-in-two bank customers are open to new digital services; and, finally, a staggering 86 percent of adults in the region don’t have a bank account.
“There is no doubt that the region’s fintech sector is going to continue to accelerate.”
Greater geographic diversity was one of the key trends highlighted in KPMG’s latest Fintech 100, which was published in October 2016. The report ranks the world’s top 100 fintech innovators, divided into 50 established companies and 50 ’emerging stars’.
The established 50 list spanned 17 different countries, up from 13 a year earlier.
Toby Heap of H2 Ventures, which collaborated with KPMG on the research, noted that exciting fintech players are emerging in markets all over the world, “from India to Israel, from Portugal to the Philippines”.