Fintechs bring mobile access to unbanked people in Egypt

Until recently, transferring funds between accounts in Egypt could take up to three days, but the introduction of instant bank payments has completely changed the country’s payments landscape, said Frans van Eersel, CEO of the Middle division. -East and North Africa (MENA). FinTech start-up dopay, PYMNTS said in a previous interview.

Read more: UK-based dopay makes payroll cashless for workers in Egypt

Other factors have also contributed to the changing payments landscape in Egypt in recent years, including a young, tech-savvy population and growing internet and mobile phone penetration. This has led to a major leap forward in recent years, he added, creating wider opportunities for businesses to grow.

However, the high proportion of cash-intensive unbanked populations – the third highest percentage in the world behind Morocco (71%) and Vietnam (69%) – in this North African country still limits financial inclusion and opportunities for residents to improve their lives.

For example, most local workers are paid in cash, and companies must manage the operational struggles and security risks associated with carrying and carrying physical cash. For employers trying to transition to digital payments, it can take up to a month to open an account for their employees, Van Eersel explained, while navigating the heavy bureaucracy that is all too common in the country.

It’s an issue dopay is tackling head-on, he said, after securing a banking agent license to launch a next-generation virtual banking platform that dramatically reduces the time needed for unbanked workers. to access a bank account.

“It basically means we can onboard employees literally in seconds,” which used to take up to 30 days, he told PYMNTS, adding that companies can now open accounts for their employees and their beneficiaries and pay them in real time, including during weekends and public holidays.

Another local company, Thndr, is also working to accelerate financial inclusion and democratize access to investments for the underbanked population in the MENA region.

Founded in 2020, the digital investment platform offers unbanked people in Egypt and the wider MENA region the opportunity to invest in a range of stocks, bonds and funds through a mobile app.

Read Seif Amr’s interview: Democratizing investment opportunities for underbanked populations in the MENA region

“The problem is that people in the MENA region aren’t investing,” Seif Amr, the company’s co-founder and COO, told PYMNTS, adding that “those kinds of stunts lead to more problems. Most product offerings are irrelevant and still very analog.”

He explained that for most traditional investment products in the region, individuals have to physically go to a bank branch to open and manage their investment accounts, which can be a major deterrent in a situation where individual investments are not widely used in the region.

Navigating the complex regulatory landscape is another key issue for startups in the country, van Ersel pointed out: “It took us two years to get to where we are and to go through all the steps for the regulator to get approval. . [for the license].”

But significant progress has been made over the years to support local tech companies, pointing to a bright future for startups like dopay and Thndr looking to drive financial inclusion in the country.

For example, Thndr recently obtained a full broker’s license, which according to Amr is “the first license to be issued in the country in the last 12 years”.

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