In late 2020, five judges reviewed online pitches for a competition to find and support tech entrepreneurs working on a pressing challenge: increasing financial inclusion in Egypt.
The Sprint competition was launched by the American University in Cairo’s Venture Lab (V-Lab) Fintech Accelerator for students across Egypt. Supported by IFC and the Commercial International Bank (CIB), the Accelerator has graduated more than 30 start-ups since 2016 through an intensive program of training, coaching, mentorship, networking, and seed funding.
Entrants to the Sprint competition were divided into teams and led by mentors through online workshops to help them develop their ideas.
“We designed the competition to empower students to solve the financial problems that affect them,” said V-Lab Director Ayman Ismail. “We wanted to introduce them to the great potential of fintech and get them inspired by their own financial experiences to build solutions they’d actually use.”
Dozens of students pitched to judges from IFC, CIB, and Robusta, an Egyptian tech agency. First prize—15,000 EGP (about $1,000) and internships at V-Lab, CIB, and Robusta— went to the team behind the Makdeya (‘a done deal’) app, which connects students with tuition loan providers and also helps them track their spending.
“The custom here in Egypt is if you have the money, you apply for a course. If you don’t, you apply to a different place or you don’t apply at all. We wanted to design an app that would help students access funds and educate them about the finance sector and banking, ” said Abdallah Abdelsameia from the winning team.
Fintech
True financial inclusion remains elusive in Egypt, where only one in three people has a bank account. The country’s large informal sector and high poverty and unemployment rates have exacerbated the problem. IFC estimates that nearly 95 percent of all retail transactions in Egypt are still conducted in cash, compared to only 30 percent in the United States, for example.
Closing the gap will involve improving technical education for Egypt’s large youth population to ensure the digital skills they need to excel in a tech-focused job market, harmonizing regulations across markets and providing entrepreneurs like those behind the Makdeya app with crucial support and funding.
Financial technology (fintech), which focuses on innovations such as e-payments and crowd funding, is playing an important role increasing financial inclusion in Egypt and elsewhere, thanks largely to the rapid spread of mobile phone technology.
IFC’s partnership with the AUC Venture Lab is part of its broader efforts to boost entrepreneurship and the start-up ecosystem, and drive innovation, in Egypt and the wider region. IFC joined forces with the AUC Fintech Accelerator in 2019 to strengthen its mentorship, business development, and technical training services.
The partnership, previously funded by Compact for Africa, is now funded by the Government of the Netherlands.
“Entrepreneurship and innovation are key to building a competitive, dynamic and inclusive private sector in Egypt. Our aim is to speed the development of fintech startups and help them attract funding, so we’re very encouraged by the growing number of innovative solutions developed by young people in this space,” said Dahlia Khalifa, who leads the IFC team working with AUC.
COVID-19
The AUC Fintech Accelerator is pressing on despite the challenges of COVID-19, shifting its training and mentorship sessions online. In addition to the Sprint competition, it also launched a ‘Eureka’ competition in 2020 where teams received training to solve real-life digital payment challenges.
The pandemic has disrupted business and trade around the world—while also underscoring the essential role of digital services in a world divided by social distancing. Egypt’s fintech sector remains ‘extremely vibrant’, according to Kareem Abdel Aziz, IFC’s Global Head of Digital Payments. He says there has been “a rich selection of new fintech start-ups emerging over the past 18 months.”
“With the outbreak of COVID-19, there is a real need to support innovations that provide safe and affordable access to essential financial services and contribute to the growth of other industries like e-commerce,” said Khalifa. “Supporting the adoption of emerging technologies in the financial services industry will be key to achieving economic growth and creating new jobs and markets in the future.”
Ten start-ups that graduated from the AUC program are currently in operation, including Klickit, an app that allows customers to make payments, renew subscriptions and pay fees without queuing—a significant problem in Egypt’s crowded cities. Amanleek aims to simplify insurance services and make them more accessible, while El Laban is an agri-fintech platform helping dairy farmers operate and access finance.
Clearly, Egypt is proving to be fertile ground for innovative tech entrepreneurs—but continued support for accelerators and seed funds will be vital to helping them develop and market their ideas.
Published March 2021