top barriers to fintech growth in the middle east.

Fintech is poised for greater visibility across the MENA region, with many analysts predicting that it will transform the local financial services industry by 2020. However, for many fintech start-ups in the Arab world, three core challenges remain: regulations, raising investment, and hiring and retaining talent. In an area where 1 in 4 fintech start-ups shut down, these barriers will need to be overcome in order to create a sustainable ecosystem that makes fintech start-up creation and scaling easier.



Among 18 Arab countries, only four are ranked in the upper third globally, when it comes to the ease of starting a business. Laws governing licences for financial service providers in many countries were created with traditional banks in mind, and can be strict. Many fintech companies initially begin operating within a legal grey-zone, and would benefit from regulatory regimes that have been adjusted to meet the new start-up reality.

In some cases, what is missing is a more proactive, visionary approach to the fintech sector. Outside of the United Arab Emirates, some national regulators took more than a decade to embrace new payment and lending technology. In many cases crowdfunding remains illegal, and in others there are simply few regulations in place to guide development and investment into disruptive technologies. Governments across MENA could offer sandboxes or smart banking licenses, to assist with the regulation of epayments and cryptocurrencies, or even support mechanisms such as grants, tax breaks, and co-working spaces.



An estimated 100mn USD was invested in MENA fintech firms in the last decade alone, and 50mn of this was in 2017. It’s highly likely that in 2018 there will be a surge of start-ups seeking to raise Series A, B, and C, however not all companies which aim to raise funds will be able to do so.

Lending to SMEs in MENA stands at 50% of the global average, and a general lack of awareness of fintech start-ups amongst the general population hampers the pathway to investment, due to the lack of understanding of the services available. Take-up rates for new methods of payment, investment, and lending in some countries can be slow, as trust is vital for traditionally risk-adverse consumers.

However, partnerships with corporations presents opportunities to both improve trust and encourage investment. An alliance of entrepreneurs, investors, and innovative corporations could pave the way for significant growth in the fintech sector, not only in banking, but in other sectors such as telecommunications, aviation, ecommerce, media, insurance, and logistics.



Many start-up founders and entrepreneurs face difficulty in finding the highly skilled talent that they need, from programmers to professionals with finance industry experience. Individuals with a solid understanding of both tech and finance tend to be drawn towards large corporations such as banks or the public sector, where salaries are higher. Without increased investment, or government support, it will be difficult for smaller operations to compete.

Likewise, without a dedicated hiring team or access to HR software, start-ups will find sourcing talent incredibly challenging. At present, only 1,600 people have signalled that they are currently employed at a MENA based fintech start-up on LinkedIn. Slightly more than 10% of MENA workers interviewed by Wamda said that they would like to work for a start-up, whereas 64% felt that working for a corporation was more appealing. This was largely due to salary differences, as half of all MENA start-ups only offer salaries between 250 to 1,000 USD per month.

Start-ups may need to rely on social media, universities, and entrepreneurship events as channels for hiring, unless they can offer equity to entice highly skilled professionals to leave well-paid positions. 



Is your organisation searching for top performers in the Middle East? Randstad MENA can assist with search and selection across numerous sectors and geographies, including banking and technology. Get in touch with our team today to find out more. 



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