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Middle East and North Africa Slow to Adopt FinTech, Say Experts

Last Updated May 16, 2023 10:16 AM
Rebecca Campbell
Last Updated May 16, 2023 10:16 AM

The Middle East and North Africa (Mena) region is being slow to adopt fintech services, putting them behind other nations who are embracing the sector, experts have said at a recent conference.

Speaking at the Dubai International Finance Centre (DIFC) were Mustafa Adil, Thomson Reuters’ Head of Islamic Finance – Mena and Dr Jarmo Kotilaine, Chief Economist of the Bahrain Economic Development Board.

According to a report from Thomson Reuters , worldwide fintech funding amounted to $25.8 billion in 2015. There was an average investment of $44 million per company compared to a typical startup fund of $6-7 million, says Adil. He adds, though, that in Mena countries, the total amount of funding raised in the same time period was $45 million.

Kotilaine states that the slow uptake in the Mena region was because many don’t see a fit for it at the present moment.

My view is that most innovation, most productivity gains in companies, in countries, happen not because people think productivity is a great thing to have. They really happen in the absence of alternatives.

And yet, while the Mena regions may not be expanding their fintech sectors like that of the U.S. and Europe, or those of developing countries, there are some companies in the Mena region which are looking into the potential that fintech can provide.

MENA FinTech Growth

At the end of March, it was reported that Bahrain hosted the first edition of the Middle East and North Africa FinTech conference. By doing so, companies were able to foster discussion about the possible challenges and opportunities that the emerging sector can deliver.

In a bid to keep up with its neighboring countries of Dubai and Qatar, these recent discussions in Bahrain indicate that the nation is keen to embrace the industry and how it can be implemented into the country.

Even though fintech is reported as taking off slow in the Middle East, Dubai is becoming quite the innovator when it comes to blockchain adoption and appears to be leading the way for its implementation.

Only recently, the Smart Dubai Office, a government-based initiative led by the Crown Prince of Dubai, collaborated with fintech specialist firm, Avanza Solutions, to introduce a citywide payments platform on the blockchain.

While the Abu Dhabi Securities Exchange chief has revealed that he sees the blockchain representing the ‘second generation to the Internet,’ stating that the blockchain is the most ‘innovative technology in digital transactions.’

The Mena region may have a significant path to traverse compared to other nations, but it is slowing seeing the benefit that fintech can have and how its uses can be implemented.

Featured image of Moroccan sand dunes from Shutterstock.