Experts say traditional banking systems are failing to meet consumer needs
Bindu Rai, ZAWYA
Industry experts have refuted the notion that the fintech market is oversaturated in the Middle East and North Africa (MENA) region while calling out traditional financial systems for failing to recognise consumer needs.
“There might be saturation due to overpopulation in one specific sector, but if you take a macro level, the region is a goldmine. I said this five years ago and I say this now,” said Nameer Khan, Chairman and Founding Board Member of the MENA Fintech Association.
While the Far East and some Western markets may have reached saturation point in certain sectors, the ecosystem in this region is still in its infancy, Khan said while speaking at an industry panel at the recently concluded Step Conference 2023 in Dubai.
“There are 700+ Fintechs in the region, with 600+ based in the UAE [United Arab Emirates] alone,” added Khan. “If you look at the numbers, $800 billion was invested in the [industry in the] first half of 2022 alone, indicating that there is a strong appetite for investment that continues to draw in venture capitalists.”
Saad Ansari, co-founder and CEO of Xpence, a smart business expense management platform based in the UAE, cited that in this region alone, the SMEs sector was a $1.2 trillion market with less than five per cent benefitting from any funding.
“If you look at it from their perspective, the Fintech market has a long way to go. But on the consumer side, several peer-to-peer sharing apps and financial wallets could be heading towards saturation,” he stated.
Padmini Gupta, CEO and co-founder of the social finance platform Xare, pointed a finger at traditional banking systems that were fuelling the rise in Fintech solutions.
“I will argue that banking is oversaturated, and Fintech is actually trying to fill consumer needs,” she said. “You need to fill market needs to the point where the consumer wins. I don’t see that happening right now. And Fintechs are finding those niche markets, they are finding better products, and they are finding it faster.”
Sonia Gokhale, Founding Partner of VentureSouq, a MENA-based venture capital firm investing in tech companies, said the Fintech industry still had potential to grow exponentially in this region.
“We were asked in 2020 whether there were enough Fintechs in this region and there was such a hype around the sector that gave the appearance that we had hit [a] peak,” Gokhale said, but the road is a long one, according to her, with many more milestones to hit in the process.
(Reporting by Bindu Rai; editing by Seban Scaria)