Fintech opportunity in the MENA Region
The MENA region refers to the Middle East and North Africa, the Middle East and North Africa. It consists of 21 countries and extends from Morocco to Iran, including all countries in the Middle East and North Africa. It is the place of almost 600 million people, however, around 192 million people have been severely affected in that latest pandemic as they are very close to falling into the category of extreme poverty. This outlook does not look very encouraging and the region is even expected to lose $ 227 billion in GDP. It also stands out that government revenues fell by around 24% in 2020.
Even though the average GDP per capita in the region is around $ 2,000, it is double that of developing countries as a whole and places MENA among the average levels of Latin America and economies in transition. However, individual MENA countries differ greatly. For example, the four countries with the highest per capita income (Israel, Kuwait, Qatar, and the United Arab Emirates) enjoy an average GDP per capita of around $ 15,000 compared to $ 250 for Somalia and Sudan, the poorest countries of the region (IMF, 2021).
The region experiences high levels of uncertainty in the face of the pandemic as well as political instability, which makes the current panorama difficult (World Bank, 2021).
Fintech in the MENA region
Regulation in the Fintech sector is in different stages of development in the region, seeking to protect users and the use of technologies. Among the countries with the greatest progress we have the United Arab Emirates, which is considered the country with the greatest advance in the sector in the region, mainly due to its improvement in adoption and skills of ICT. UAE currently houses over 50% of the region’s fintech companies, with nearly 39% of the population using fintech for P2P money transfer. In terms of lending, we can find Beehive, which is the UAE’s first online peer-to-peer lending firm, building mutually beneficial partnerships between smart investors and creditworthy businesses.
UAE is followed by Saudi Arabia, Bahrain and Qatar, which have considerably improved their perspective regarding the use of Fintech and the support provided to the sector (Finextra, 2021).
The Mena region is characterized by also being one of the areas with the largest unbanked population. Approximately 69% of adults remain totally unbanked, yet, regional smartphone and internet penetration is very high (Ameinfo, 2021). This is a great opportunity for fintechs as they have the skills to help reduce the financial inclusion gap and also to change the financial landscape of the region.
