Strategy Note /

The ultimate guide to Egypt fintech

  • Egypt’s huge unbanked population and cash-dominated economy offer a strong opportunity for fintechs; we profile 84 firms

  • Funding flows have improved markedly this year, and the IPO environment looks strong. Regulators seem supportive

  • Strategic priorities: new geographies/ products, tech investment. Challenges: big informal sector, financial illiteracy

The ultimate guide to Egypt fintech
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Rabail Adwani
Rohit Kumar
Tellimer Research
30 July 2021
Published byTellimer Research

About two-thirds of Egypt’s population does not have a bank account, and cash penetration of the economy is among the highest in emerging markets. At the same time, fintech density is much lower than elsewhere, and almost half of industry participants are in the payments segment. As such, Egypt presents a strong fintech opportunity; it ranks as one of the top emerging markets in our fintech attractiveness index and the regulatory environment is improving. Given limited competition, successful fintechs should register sharp growth. Recent large-ticket funding deals in the sector suggest private equity investors increasingly share this view.

In this report we discuss:

  • the fintech opportunity in Egypt

  • the current state of the fintech ecosystem

  • how the central bank is supporting fintechs

  • fintech success factors and firms’ plans

  • the key challenges limiting fintech growth

We profile 84 firms making up Egypt’s fintech ecosystem and highlight five companies with interesting approaches to capturing Egypt’s strong growth opportunity. We also showcase three firms that have plans to list soon.

Egypt’s low financial penetration generates a compelling opportunity for fintechs

Egypt’s financial penetration is poor in an emerging markets context – only around one-third of adults have a bank account, versus three-quarters across our EM sample. Access to ATMs and credit cards is also low, as is the number of bank branches. Egypt is a very cash-dependent economy; the volume of currency in circulation (relative to banking deposits) is much higher than in other emerging markets. These factors all point to the economy's low level of financial sophistication. Contributory factors include high-interest rates (the central bank benchmark lending rate currently stands at 9.25%), the government’s high domestic borrowing needs, and periodic capital controls/ severe currency devaluations.

Financial penetration in Egypt lags most other emerging markets

Fintech penetration lags comparable emerging markets

Egypt's fintech sector is much smaller than other markets. We estimate that the number of fintechs in operation (relative to the size of population) is just a quarter of that in Kenya and South Africa, for example, and around 50% lower than in Nigeria. For existing operators, this lack of competition can prove helpful.

Egypt's fintech density lags EM peers

The fintech ecosystem is skewed towards payments providers

Egypt’s fintech universe is dominated by the payments firms which comprise 48% of the total ecosystem (versus a 32% EM average). Investechs (1% of total) and insurtechs (4% of total) are significantly underdeveloped compared to peers, however, we expect these segments to grow in the future. Digital banks have also started to gain attention; for example, Telda recently raised US$5mn in a pre-seed funding round.

Egypt's fintech ecosystem

The Central Bank of Egypt (CBE) is actively promoting the fintech sector

Fintech Egypt

This platform was created by the Central Bank of Egypt in 2019. There are three main projects under the Fintech Egypt umbrella:

  • Regulatory sandbox, that temporarily provides a virtual testing space for fintechs under a defined regulatory environment.

  • Fintech Hub, a technology-driven platform acting as a one-stop-shop for all fintech ecosystem stakeholders. A key goal of this initiative is start-up networking, which could promote partnerships across fintechs.

  • Fintech Innovation Fund. Funding is essential for building a sound start-up ecosystem. The central bank of Egypt plans to launch an EGP1bn (US$65mn) investment vehicle to support fintechs. It will be established via the investment arms of commercial banks.

New banking law

The new banking law called CBE Law, introduced in September 2020, intends to bring the legal framework in line with global best practice. The concept of digital banks is introduced in this legislation: these are banks that provide banking services completely through digital channels or platforms. Digital banks still need a CBE licence, but are exempt from the minimum capital requirements set at EGP5bn (US$320mn) for traditional banks. This new law also requires payments companies to be licenced; previously such firms were unregulated.

Egypt’s start-up funding is showing robust growth but fintech lags

In 2020, Egypt's start-ups generated record VC funding of US$190mn; VC funding volume has registered a 5yr CAGR of 100%. However, the number of start-up deals slightly decreased from 133 in 2019 to 114 in 2020, we think mainly due to the challenge of conducting due diligence during the Covid-19 pandemic.

Fintechs mobilised just 8% of the total start-up funding in 2020, ie US$15mn. The proportion is well below the 23% average for Africa. However, the situation for fintechs in Egypt seems to have improved more recently. Some notable deals in 2021 include Paymob (Payments, US$15mn), Telda (Digital banking, US$5mn), and Dayra (Lending, US$3mn).

Egypt start-up funding mix by sector

Key success factors for Egypt fintechs

Based on public comments from 23 Egyptian fintechs, we conclude that the top factors driving fintech success in Egypt include serving financially-excluded customers, forming effective strategic partnerships and innovation.

Targeting financially excluded individuals and businesses

As highlighted above, Egypt has very low levels of financial penetration, which means that there is a large target market for firms that seek to serve underbanked customers. Some fintechs focusing on this segment include Dayra (Lending), Shahry (Lending) and Telda (Digital banking).

Strategic partnerships

Strategic partnerships can help fintechs in many ways, such as diversifying their product mix, improving their service quality and/or expanding their client base. For example, PayTabs (Payments) has partnered with Visa to offer a contactless payment acceptance solution known as Tap to Phone. Raseedy (Payments) has launched its digital wallet through a partnership with Societe Arabe Internationale de Banque (saib) and Mastercard. Valu (Lending) partnered with Saudi German Hospital to provide instalment payment programmes to boost healthcare affordability.


Innovation is a key pillar for fintech success. It can, for example, allow fintechs to improve their service offerings and hence enhance the consumer experience. Firms that are striving to innovate include Raseedy (Payments), Paymob (Payments) and Mozare3 (Agtech), which are focusing on streamlining the customer onboarding process and providing a seamless user experience.

Egypt fintechs' key success factors

Egyptian fintechs' plans

Based on public comments from 15 Egyptian fintechs, top strategic priorities for sector participants include geographical expansion and introducing new products. Other strategic priorities include technology investments, improving user experience and entering strategic partnerships.

Geographical expansion

The presence of large, financially underserved populations elsewhere in Africa can prove attractive for fintechs exploring new growth drivers, particularly if firms have built up relevant, transferable expertise and have the necessary financial and management capacity. Therefore, geographical expansion is one of the top priorities for fintechs in Egypt. For example, CreditGo (Payments) is planning to expand to other African markets, while Liwwa (Lending) plans to launch its services in Turkey and Ethiopia.

Introducing new products and services

As highlighted previously, the fintech landscape in Egypt is heavily skewed towards payments. Introducing new products and services can help fintechs capture a greater share of their customers' wallets, potentially in segments with lower levels of competition. For example, MoneyFellows, a money management platform, intends to introduce a Buy Now Pay Later (BNPL) service. MerQ, an AI-based virtual assistant/chatbot provider, plans to expand its product offerings to raise financial inclusion levels in Egypt.

Technological investment

Investment in technology enables fintechs to maintain their competitive advantage. Examples of firms giving high priority to technology investment include Mozare3 (targeting improvements in agriculture-related financial services) and MoneyHash (which is developing a comprehensive payments infrastructure offering).

Other strategic priorities for Egypt’s fintechs include improving the user experience and entering strategic partnerships.

Egypt fintechs' strategic plans

Key challenges for Egypt’s fintechs

Despite the huge opportunity discussed above, most fintechs in Egypt are still in the early stages of development. We think the key hurdles to their growth have been the large informal economy, a lack of financial literacy and an underdeveloped regulatory environment.

The large informal economy

Over half of Egypt’s labour force is employed informally; the informal economy also accounts for around half of GDP. This is a contributory factor to the high level of cash utilisation in the Egyptian economy. The situation is particularly acute for small- and medium-sized enterprises, which number around 2.5mn and employ three-quarters of the labour force. These businesses prefer to deal in cash for many reasons, including tax avoidance. These factors represent a significant challenge to digital finance providers.

Informal employment as % labour force

Lack of financial literacy

According to an S&P survey, only 27% of Egypt's population is financially literate, which is defined as knowledge of one of these four concepts: i) risk diversification, ii) inflation, iii) simple interest and iv) compound interest. This literacy level is below most other emerging markets.

Financial literacy across emerging markets

Regulatory constraints

The regulatory framework is evolving but is still underdeveloped. The recent new CBE Law introduces a regulatory framework for digital banks and payments processors, but further changes are likely given the fast-changing environment. In addition, there are other areas of fintech activity (such as insurance and investments) that likely need more regulatory attention so that operators have a clear framework within which to work. 

Several fintech IPOs are in prospect

There have not been many Egyptian fintech IPOs previously, but the strong performance of Fawry since its August 2019 IPO is encouraging other firms to consider public listings. This would widen the opportunity set for listed equities investors and provide pre-IPO investment openings for private equity. We highlight below three Egyptian firms intending to list their shares over the coming years.

e-finance (Payments)

e-finance was established in 2005 by the Egyptian government to build, operate, and manage the sovereign's financial payments hub. It has now grown to become a much wider digital payments platform offering services to businesses and consumers through a fully integrated suite of digital services. e-finance handles EGP1.6tn of government transactions annually, has issued 40mn+ cards to date, operates an ATM network of over 13,000 and owns and manages more than 50,000 points of sale.

The company has three subsidiaries of interest:

  1. Integrated Smart Solutions, a business-to-business (B2B) model specialising in smart cards

  2. Khales Retail Network, a business-to-consumer (B2C) and business-to-business-to-consumer (B2B2C) digital payments solution that eases payments and collection processes

  3. eAswaaq, an e-commerce market platform that provides agricultural, commercial and industrial solutions

The firm's IPO is expected later this year.

e-finance business model

Source: Company website

Ebtikar Holding (Payments)

Ebtikar, founded by B Investments and MM Group in 2017, is a financial services holding company. Ebtikar is currently undergoing a restructuring of its portfolio, after which it will own two Egyptian digital payments companies, Bee and Masary. Vodafone is another large investor in Bee and Masary. Ebtikar Holding expects its IPO will take place near the end of 2021 or in early 2022.

Bee was established in 2010 and is now a leading e-payments solution provider in Egypt. It also operates a retail network of more than 54,000 points of sale. The platform offers payments collection services to various mobile network operators like Orange, Vodafone and Etisalat. Bee also provides payments services to end-users, such as utility bills, transportation tickets, cinema tickets and university fees. Ebtikar bought a 60% stake in Bee in 2017 for EGP156mn (US$8.8mn) and now owns 80% of this business.

Masary is one of Egypt's largest payments facilitators and aggregators. It was established in 2009 and now offers collection services to more than 90 service providers and operates a network of more than 64,000 points of sale. Masary also provides services for Egypt’s landline operators (like Orange, Vodafone, Etisalat) as well as the country's electricity, water and gas utilities, among other government entities. Other services also include education fees, insurance services, mobile wallets, transportation tickets and charity donations. Ebtikar bought a 33.7% stake in Masary in 2018 for EGP130mn (US$7.2mn) and currently owns 72% of the business.

Aman Holding (Payments and BNPL)

Aman Holding is a subsidiary of Raya Holding, a leading IT investment conglomerate listed in Egypt. Aman Holding has three main arms:

  1. Aman for e-payments, facilitating digital payments with 100,000 touchpoints across Egypt

  2. Aman for financial services, providing goods and services instalment loans to 150,000 customers via its own website and partner merchants

  3. Aman for microfinance, which offers loans to micro and small enterprises to help them establish and scale up their businesses

Aman Holding has certain other initiatives in the pipeline, including a securitisation licence and building another SME financing entity. Recently, Raya Holding sold a 24% stake in Aman Holding to the National Bank of Egypt, valuing the company at EGP1.76bn (US$112mn). Aman Holding expects to list its shares within the next two years.

We have previously published two reports relating to upcoming emerging market fintech IPOs, highlighting 12 companies in digital payments space and another 7 fintechs planning to list in the future.

Five Egyptian fintechs to watch

Fawry (Payments)

Fawry provides payments services to 20mn individuals through multiple channels such as online, mobile wallets, and at more than 225,000 physical locations such as ATMs and stores. With more than 3mn financial transactions on daily basis, Fawry became the first Egyptian electronic payments company to reach a US$1bn market valuation, following strong share price performance since its IPO in August 2019. It has also been one of the best-performing stocks in the pandemic.

Paymob (Payments)

Paymob is Egypt’s largest digital payments company – it has more than 12mn users and processes c85% of the country's mobile wallet transactions. Paymob raised US$18.5mn of funding in its April 2021 Series A funding round, making it the largest Series A fintech transaction in Egypt. The company has plans to expand internationally, first into Sub-Saharan Africa and then into the GCC.

Thndr (Investech)

Thndr, an investech company, aims to make it easy for people to invest in stocks, bonds and funds, without charging them any commission. It received a brokerage licence in August 2020. High-profile international firms like Zerodha in India and Robinhood in the US, which have rapidly become two of the largest brokerage houses in their home markets, signal Thndr's potential to emerge as the leading retail investment platform in Egypt.

Telda (Payments)

Telda simplifies the digital payment experience for the financially excluded and has been designed with Generation Z/digital natives in mind. The firm was founded in April 2021 and acquired funding of US$5mn the following month from Sequoia Capital, one of the world's leading venture capitalists. Telda is the first company to receive a license from the Central bank of Egypt under the new Banking Agents regulations. Within a month of launch, the firm registered 30k signups, with a further 17k on the waiting list.

MoneyFellows (Lending)

MoneyFellows is a group lending and savings platform. It secured US$4mn Series A funding from Global VC Partech and Sawari Ventures. The company has updated the traditional ROSCA (Rotating Savings and Credit Association) model and is serving more than 150,000 active users.

In the table below we briefly profile other firms making up Egypt’s financial services ecosystem.

Egypt's fintech landscape