Egypt’s biggest national banks launch an $85 million Fintech Fund

Egypt's biggest national banks launch $85 million Fintech Fund - Startup Lagos

Fintech Flying Fine

As fintech across the African continent is blossoming, many investors and corporate organizations are even becoming more interested in ways of stimulating the sector further. In spite of the huge shrinkages in economic autarky especially of African countries, investment in fintech is still steadily on a rise. Last year, the fintech sector drew in the bulk of over $132 billion globally, and many yet opine that investments would cross the $150 billion mark this year. With this growth in fintech investments, especially in continents with a wide gap of the unbanked, many fintech companies are pivoting relevantly to neobanking. In Africa, last year, fintech attracted more than 60% of the total investments to the tune of $4.3 billion that the startup ecosystem recorded.

Already the continent boasts of over five fintech unicorns, and about three fintech soonicorns. Companies like Flutterwave are blazing the trail in growth and impact across the fintech space, paving the way for more fintech companies to take center-stage in the African startup scene. Even in spite of all this growth, there is still much work to be done. According to The Wheeler Institute of Business and Development, only 37 African fintech companies had achieved scale at the time of their report. The report highlighted an analysis of over 716 companies (of which 37 represented but a near-insignificant 5%) across four metrics, related to a number of end-users, annual revenue (in US$), cumulative funds raised in US$, and the number of employees. Without a doubt, we are asking, will African fintech ever rule the world?

$85 million Fintech Fund

Financial Inclusion has consistently stood as a strategic priority to the governmental agenda in Egypt - Startup Lagos.
Financial Inclusion has consistently stood as a strategic priority to the governmental agenda in Egypt.

In response to this cynosure of attention, more organizations are making significant and targeted investments in fintech. As such, three major Egyptian banks have launched a fintech fund in partnership with Global Ventures. The $85 million Fund, Nclude by Global Ventures, will target investments in fintech startups operating in the Middle East and Africa region (MEA). Over the years, various legislative and regulatory modifications in Egypt have made it easier for fintech investments to flow into the country in droves. These modifications have facilitated more comfortable ways for Egypt’s large unbanked citizens to do their business seamlessly. The country is already proudly home to one of Africa’s unicorns, Fawry, which joined the billion-dollar league in 2020, twelve years after its founding. The fintech company became the first-ever African fintech to go public through an IPO on African soil after it went public on the Egyptian Exchange (EGX). In similar impetus to consolidate fintech growth in the country, these three banks are pushing forward the overarching goal of solving the financial inclusion challenges for Egypt.

The fund is anchored by Banque Misr, with the National Bank of Egypt (NBE) and Banque du Caire acting as strategic investors. Other investors include eFinance Investment Group and Egyptian Banks Company. Speaking on the development, Egyptian Central Bank Governor, Tarek Amer, opines that the fund’s establishment is,

A crucial step to transform Egypt into a regional centre for the fintech industry in the Arab World and in Africa. This step is an implementation of the directives of Prseident Abdel Fattah El-Sisi to support innovative youth in Fintech and Fintech-enabled sector, as well as CBE’s Fintech & Innovation Strategy which aims to create an enabling environment for the Fintech industry.

The fund already deployed investments in 4 companies:
Khazna, A financial Super App that offers convenient, technology-driven financial solutions to underserved consumers.
Lucky App, Egypt’s leading consumer fintech app, offering installments, offers, cashback rewards and credit.
Paymob, A leading digital payment service provider.
Mozare3 | مُزارع, meaning farmer in Arabic, is an Agri-fintech platform that provides smallholder farmers with direct access to inputs financing, markets, and hands-on technical support.

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