Egypt's three largest banks will invest $85 million in a new FinTech fund, with Banque Misr as anchor investor, to boost the growth of the sector and drive financial inclusion as the country seeks to build an "economy of the future".
Banque Misr, National Bank of Egypt and Banque du Caire will back the new FinTech fund, which is approved by the Central Bank of Egypt and managed by UAE-based venture capital company Global Ventures, a statement on Sunday said.
Nclude by Global Ventures, as the fund is known, also secured investments from eFinance Investment Group and Egyptian Banks Company. It is set to attract more from regional and international investors.
The move is part of Egypt's national strategy that "aims to create an enabling environment for the FinTech industry and adopt more innovative solutions capable of delivering banking and financial services to all segments of society more easily and at less cost, as a crucial step to transform Egypt into a regional centre for the FinTech industry in the Arab World and Africa," said Tarek Amer, governor of the Central Bank of Egypt.
Venture capital investments in Egypt more than tripled annually in 2021 to $445m and are expected to cross $1 billion this year, the American University in Cairo said. Last year, Egypt accounted for 15 per cent of transactions and 11 per cent of deployed capital in the Mena region, data platform Magnitt said. FinTech start-ups accounted for 17 per cent of deals that were closed last year in the country.
The new FinTech fund has already made its first investments in four companies — Khazna, a financial app that offers convenient, technology-driven financial solutions to underserved consumers; Lucky, Egypt’s consumer FinTech platform providing instalments, offers, cashback rewards and credit; Mozare3, an Agri-FinTech platform; and Paymob, an electronic payment provider.
The fund will benefit the Egyptian economy by supporting the country's young FinTech talent and creating an environment to help deliver banking and financial services to all segments of society, said Mohamed El-Etreby, chairman of Banque Misr.
"This is an important step to transform Egypt into a regional centre for the Arab and African FinTech industry. It will also help raise financial inclusion rates and accelerate Egypt's digital transformation, which is integral to delivering the Egypt Vision 2030," he said.
The fund will support early-stage FinTech start-ups to help build the "Egyptian economy of the future", said Hisham Okasha, chairman of the National Bank of Egypt.
Outside the UAE, Global Ventures currently has offices in Cairo as well as in Jeddah, Riyadh and Lagos.
"Egypt's huge unbanked, young population and cash-dominated economy offers strong opportunities for local and regional FinTech and FinTech-enabled companies who continue to witness exponential growth in the market," said Basil Moftah, partner at Global Ventures.
Over the past few years, Egypt has made a "quantum leap forward by becoming home to a vibrant entrepreneurial ecosystem with Fintech at its heart", said Eslam Darwish, partner of the Nclude FinTech fund.