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Possessing some of largest unbanked populations, Egypt & Nigeria unite on fintech space

IFM_Nigeria Egypt
Nigeria has at least 200 fintech companies, while Egypt possesses some 177 ventures

The central banks of Nigeria and Egypt have signed a Memorandum of Understanding (MOU), as two of the largest economies in Africa reportedly agreed to set up a “Nigeria-Egypt Fintech Bridge”.

The strategic partnership will encompass joint regulatory projects, coordinated licensing and legal frameworks, information and data exchange, fintech cross-referrals, and talent development.

Aishah Ahmed, deputy governor for financial system stability at the Nigerian Central Bank, while interacting with African Business, stated that the move had been particularly geared towards improving financial inclusion in the North African region.

The official also hoped that the Nigerian-Egyptian collaboration would allow citizens from both countries to access formal financial services, as the nations reportedly possess some of the largest unbanked populations in the world.

As per the stats, approximately 40% of the Nigerian population does not have a bank account, while the figure rises up to 75% for Egypt. Both economies rely heavily on physical currencies, with over two-thirds of Egyptians using only hard cash for product purchases and money transfers, according to the World Bank.

Nigeria has at least 200 fintech companies, while Egypt possesses some 177 ventures. Most of these companies are start-ups and mostly indulge in venture funding of the African tech ecosystem. Now, the “Nigeria-Egypt Fintech Bridge” aims to equip these African fintech professionals with knowledge and abilities, thus cultivating an atmosphere of progress and creativity within the industry, while promoting broader financial inclusion among the Nigerian and Egyptian populations.

Rume Ophi, a fintech and blockchain analyst based in Lagos, told African Business that “collaboration between the various government agencies will help drive financial inclusion in Nigeria and Egypt.”

“We look forward to cultivating an innovative space for fintech start-ups and entrepreneurs in Egypt and Nigeria to accelerate financial inclusion, deepen our payment systems, and drive economic growth across the African continent,” Aishah Ahmed stated further.

The roadmap for the “Nigeria-Egypt Fintech Bridge” comes at a time when the regional fintech leaders are calling for greater inter-African cooperation to drive the industry forward.

During the ‘Inclusive Fintech Forum’ in Rwandan capital Kigali in July 2023, Dare Okoudjou, CEO of pan-African payments company MFS Africa, mentioned the need for African countries to integrate their fintech markets in order to unleash their full economic potential.

“We need to give entrepreneurs across the continent access to a bigger market. We keep talking about this potential market of 1.2bn people. But it is not a reality until we actually make it,” he said.

Rume Ophi also mentioned that Nigeria, in particular, appeared to be prepared to advance its fintech market, both through foreign collaboration and other measures.

He also noted that “in Nigeria, the government gave banking licences to telecoms companies to encourage mobile banking in a country where 36% of people are still completely excluded [from the formal financial sector]”

Ophi also emphasised that the MoU should be one of the crucial steps to advance the fintech market in the African region.

Ophi also expressed confidence that the “Nigeria-Egypt Fintech Bridge” could unlock significant amounts of cross-border collaboration and help entrepreneurs in both countries to draw up more sophisticated fintech services and products, therefore promoting wider economic growth.

“The MOU will allow Nigeria and Egypt to attract innovations and foreign direct investment, which in turn will help grow the economies of both countries,” he concluded.

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