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Digital Evolution in Middle East

Middle East market is in the early stages of evolution and is largely dominated by payment startups across online payments, bill payments, wallets, and money transfer. In many ways, the market is similar to the Indian ecosystem in 2015 / 16, which was primarily led by payment wallets. The digital lending sector is getting started across areas like community lending, crowdfunding and loan comparison sites. Over the next three years, the ecosystem will proliferate across all segments. Based on the learnings from other markets, Middle East Market may avoid typical challenges that other markets may have faced.

Key Success Factors for Fintechs:

We believe that the following key factors will influence the success of Fintechs:
• Higher percentage of youth population ready for digital adoption
• Low penetration of formal banking channels
• Low SME Lending
• Rapid growth of E-commerce
• Government push for Fintech / Digital Business
• Small size of individual markets
• Entry of international startups

Overview of MENA Market

Evolving Business Opportunities


Most of the growth is in the Payment Sector
• Areas include online payments, bill payments, wallets, money transfer.


The digital lending sector is evolving and in the next phase of growth
• Lending areas include community lending, crowdfunding, Loan comparison sites
• SME Funding Gap is at USD 240 Billion (Est 2014)
• Crowdfunding involves investment on properties, music album, hardware etc.

Next Segment Growth

New sectors expected to grow would be Insurance, Wealth
• Other areas include Security & Encryption, Customer Loyalty, Software As A
Service, Big Data & Analytics, Accounting and Platform approach


Entry of international stratups in region poses challenge for local startups
• Regulations still perceived as a challenge, though many initiatives taken by Govt in Jordan, UAE, Bahrain in last few years
• Talent acqusitions remain major concern
• Raising funds
• Ecommerce struggle to kick off due to low credit card usage, security concerns and people preference of Cash on Delivery option
• SME Lending challenge due to poor financial data, no credit bureaus and others

For an in-depth analysis of the MENA region download our report.

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