Industry experts have refuted the notion that the fintech market is oversaturated in the Middle East and North Africa (MENA) region, calling out traditional financial systems for failing to recognize consumer needs.
“There may be saturation due to overpopulation in a particular sector, but if you take a macro level, the region is a goldmine. I said this five years ago and I am saying this now,” said Nameer Khan, chairman and founding member of MENA Fintech Association.
While the 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 addressing 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,” Khan added. “If you look at the numbers, $800 billion was invested in [industry in the] 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 SME sector was a $1.2 trillion market with less than five percent benefiting 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, more peer-to-peer sharing apps and financial wallets may be heading towards saturation,” he said.
Padmini Gupta, CEO and co-founder of social finance platform Xare, pointed a finger at traditional banking systems that led to the rise in Fintech solutions.
“I would argue that banking is oversaturated and Fintech is actually trying to fill consumer needs,” she said. “You have to fill market needs to the point where the consumer wins. I don’t see that happening right now. And Fintechs are finding these niche markets, they’re finding better products, and they’re finding it faster.”
Sonia Gokhale, founder of VentureSouq, a MENA-based venture capital firm that invests in technology companies, said the Fintech industry still has the potential to grow exponentially in this region.
“We were asked in 2020 if there were enough Fintechs in this region and there was such hype around the sector that gave the appearance that we had hit [a] peak,” Gokhale said, but the road is long, according to her, with many more milestones to reach in the process.
(Reporting by Bindu Rai; Editing by Seban Scaria)