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These start-ups in MENA which make finance more inclusive

In the Middle East, startups are assessing new applications to allow disadvantaged populations access banking services. A good illustration of how the collaboration of technology and finance can help marginalized communities.

In many MENA countries, a large part of the population still doesn’t have access to the traditional financial system. This is particularly the case in Iraq, where out of 38 million inhabitants, only 23% have a bank account (according to the World Bank). As Zaid Fawzi, CEO of INC (International Network for Cards) explains, “Most people who have a bank account use it only to withdraw their salaries but prefer keeping their savings at home.” A situation driven by the lack of flexibility in the banking sector, whose opening hours are not always adapted to most workers. He adds, “most banks don’t provide online services and account opening procedures are very long.” In order to fill this void, he launched Neo, a virtual card that can be downloaded in a few seconds on a mobile application and allows people to make online purchases on local and international sites, in partnership with the Lebanese fintech start-up Nymcard. “This card also comes with an online wallet that allows the users to keep an eye on their spendings.” A wallet which the users can recharge with INC agents located in most cities and provinces throughout Iraq.

 

In response to the lack of flexibility of the banking and institutional sector…

With a banking sector penetration rate of only 36% among adults and 25% among women, disparities are also considerable within the Tunisian population. As Souha Arbi, a marketing analyst at the startup Kaoun, a mobile banking application, explains: “Despite efforts on the part of both the public and private sectors, financial services are still inaccessible to a large part of the population, especially for people located in the south of the country.” To counteract this phenomenon, the start-up has set up several measures, such as a reinforced identification service, an electronic signature system for individuals and companies, and the ability to store and share documents remotely and safely. It is also a digital platform with QR codes, in order for companies to offer simpler payment methods to their clients. The ingenious initiatives have to face the heavy administrative procedures of the banking sector and governments, which start-ups often have to partner with: “Most of the institutions we work with are used to time-consuming procedures. In addition, they do not have the technological infrastructure for rapid integration. So we had to expand our work to create applications that are compatible with their different legal systems and speed up the process,” she points out.

 

The fintech startups make finance more inclusive in the region

Adopting an empathetic and customer-oriented approach, based on cost reduction and efficient services, these fintech companies have managed to catch up to the traditional financial sector, and government institutions, by reaching targets that are usually neglected at the bottom of the chain. This is the case of Rise, a start-up launched in 2017 in Dubai by Padmini Gupta, which utilizes artificial intelligence to offer financial services to migrant workers. With no minimum balance required, it allows them to open an account, swiftly, through a mobile application, then manage their savings, obtain loans and answer all their questions thanks to the acquisition of an artificial intelligence chatbot. In Egypt, since 2019, Khazna offers banking services to more than 20 million underserved Egyptians, who are very active on their smartphones. In collaboration with the country’s major banks and financial partners, it enables them to pay, save and borrow easily with very few face-to-face interactions. As Souha Arbi underlines, “Fintech startups are disruptive and adapt to change faster than other market players. They have the ability to encourage decision-makers to update old regulations, but also to create new markets to inspire and lead significant behavioral change in their communities and across the region”.