The OECD report examines the rapid expansion of fintech in Egypt and its growing role in empowering Small and Medium-sized Enterprises (SMEs) and entrepreneurship, key drivers of the country’s economic growth and job creation.
Key Highlights:
- Fintech Landscape: Egypt’s fintech sector has grown significantly, fueled by rising digital adoption, mobile penetration, and a supportive regulatory framework led by the Central Bank of Egypt (CBE) with initiatives like regulatory sandboxes and digital transformation strategies. Core fintech services aiding SMEs include payments, lending, crowdfunding, and blockchain applications.
- SME Financing Challenges: Access to credit remains limited as traditional banks hesitate due to risk and collateral issues. Many SMEs depend on informal financing. Fintech bridges this gap via alternative credit scoring, digital lending, and peer-to-peer finance.
- Regulatory Support: The Egyptian government, CBE, and Financial Regulatory Authority (FRA) foster fintech innovation while ensuring consumer protection and financial stability, enabling startups to pilot products safely in regulatory sandboxes.
- Digital Infrastructure & Inclusion: Expanding mobile networks and digital infrastructure are vital for fintech scalability. Fintech also enhances financial inclusion by reaching underserved groups, including women entrepreneurs and rural SMEs.
- COVID-19 Impact: The pandemic accelerated fintech adoption with SMEs increasingly using online payments, digital invoicing, and alternative financing platforms.
- Challenges & Risks: Despite progress, issues remain such as digital literacy gaps, cybersecurity threats, and regulatory coordination. Scaling requires ongoing improvements in infrastructure, governance, and data protection.
- Policy Recommendations: The report advocates strengthening digital infrastructure, enhancing SME-focused financial literacy, promoting public-private partnerships, balancing regulation to encourage innovation and manage risks, enabling data sharing to improve credit access, and supporting fintech ecosystems via incubators and accelerators.
