Banque Misr, the National Bank of Egypt (NBE), and Banque du Caire have launched “Nclude” fintech fund in partnership with Global Ventures, after obtaining the approval of the Central Bank of Egypt (CBE).
This unprecedented step comes in implementation of the state’s strategic directions to support young innovators who will be responsible for building the future Egyptian economy. The fund aims to promote innovation in the field of financial technology and financial inclusion.
Banque Misr, the main investor in the fund, in addition to the NBE and Banque du Caire contributed a total of $85m in financing. Other investors included e-finance and the Egyptian Banks Company.
The fund is expected to attract additional investments from prominent regional and international investors, which will make it the largest investment platform for emerging companies operating in the financial technology sector and its feeding sectors in Egypt, the Middle East, and Africa. In addition to investing in emerging companies, the fund will be supported by Shipyard Technology Ventures International – which brings its high-tech capabilities to the Egyptian market to help create new FinTech companies.
The Fund directed its initial investments to four companies, namely, Khazna, an Egyptian technology company specialized in electronic financial solutions through the comprehensive Khazna application; Lucky, a pioneering application in financial services technology in Egypt; “Mozare3” (Farmer), an emerging agricultural technology company that aspires to digitize the agricultural sector in Egypt and the Middle East through a smart application to meet the financial and non-financial needs of farmers; and “Paymob”, which was founded in 2015 and provides integrated electronic payment solutions in Egypt, Africa and the Middle East. Paymob aims to facilitate the receipt of various electronic payments (cards – installments – electronic wallets) for merchants, whether online or payment machines to develop their businesses.
Tarek Amer, Governor of the CBE, said that this step comes in light of President Abdel Fattah Al-Sisi’s directives to support and sponsor innovative youth in the emerging financial technology fields and the technological sectors that feed them. The CBE’s strategy for financial technology and innovation aims to create a supportive environment for the financial technology industry, as well as enable more innovative financial technology applications to provide and deliver banking and financial services to all segments of society more easily and at less cost, as an important step on the path to achieving the targeted digital transformation, and transforming Egypt into a regional center for the Arab and African financial technology industry.
The strategy is based on many integrated axes, which are represented in supporting financial technology entrepreneurs, providing a stimulating legislative and regulatory environment for the financial technology industry, and working to meet the demand of financial technology services. Another axis targets increasing the funding directed to emerging financial technology projects.
Mohamed El-Etreby, the Chairperson of Banque Misr, commented: “Banque Misr’s contribution to this fund reflects our commitment to keeping pace with global developments in the field of financial technology, as it is the future of banking and financial services in Egypt and the world. This fund will achieve many gains for the Egyptian economy, by supporting young talents in the financial technology sector in Egypt, and creating an ideal environment that enables them to develop innovative solutions that contribute to providing banking and financial services to all segments of society, in a more efficient and affordable manner.”
He added that this is an important step to transform Egypt into a regional hub for the financial technology sector in the Arab and African region. The fund will also help raise financial inclusion rates and accelerate the pace of digital transformation in Egypt, which is a cornerstone of Egypt’s Vision 2030.
Moreover, Hisham Okasha, the NBE Chairperson, said that the Fund aims to sponsor financial technology startups, especially in their early stages, as well as promising talents in the field of financial technology. They are among the entities capable of achieving gains for the Egyptian economy, in addition to creating the appropriate environment to attract, nurture, and localize talents in the Egyptian market to provide innovative applications in this field and support innovation in the digital banking and financial services sector, to reach all segments of society more easily and at a less cost, in order to enhance digital transformation and financial inclusion. This is an essential part of the framework of the pioneering role CBE plays to support innovation in the financial technology sector and its feeding sectors, to achieve the goals of the state and Egypt’s 2030 strategy. It is also in line with NBE’s strategy on digital transformation.
Tarek Fayed, the Chairperson and CEO of Banque du Caire, said: “The launch of the fund offers unique and distinct opportunities, as financial institutions partner with investors and entrepreneurs to find new financial technology solutions”. These solutions are not limited to improving the quality of the services currently being offered. New services are also being developed using the latest technologies to attract people who do not benefit from banking services, according to Fayed.
The participation of the three banks, as major investment entities in this fund reflects a strategic developmental dimension that can benefit the Egyptian economy as a whole. It can transform the country into an innovation hub in the sector of financial technology, in line with the vision and directives of CBE.
Basil Moftah, a general partner at Global Ventures, said: “We would like to thank all bodies that invested in this fund for their confidence. Over the past few years, we have had partnerships with many entrepreneurs across the MENA region, but we kept our focus on the financial technology sector in Egypt as a top-priority market.”
He added that there is a large number of young people in Egypt who do not benefit from the banking services, in an economy that mostly relies on cash and banknotes. This is a great opportunity for local and regional companies working in financial technology and its feeding sectors, which are witnessing a rapid growth in the market.
“We are looking forward to partnerships with all parties in the entrepreneurship field to continue the efforts that seek to support this growth and turn Egypt into a regional innovation hub in FinTech,” he continued.
Islam Darwish, the CEO of Nclude Fund, said that over the past few years, Egypt has made a quantum leap to become a vital home for entrepreneurship, especially in the field of financial technology. This was made possible thanks to the laws and government decisions, as well as growing partnerships with financial institutions. Startups in the field of FinTech will play a pivotal role in the digital economic transformation and support the plan to expand financial services in Egypt.
“We are grateful for the opportunity to cooperate with the largest Egyptian banks and top fintech companies like e-finance and the Egyptian Banks Company, as well as many international investors, in a way that could provide aspiring entrepreneurs with the tools they need to succeed,” Darwish said.
Ibrahim Sarhan, the e-finance Chairperson, commented: “Our engagement with Nclude will allow e-finance to better fulfill our mandates of furthering digital transformation and expanding financial inclusion in Egypt.”
The fund promises to develop cutting edge prospects and thus to accelerate Egypt’s journey towards a financially inclusive economy, in accordance with the objectives of Egypt Vision 2030 and the directives of the Central Bank.
By assisting Egyptian and regional fintech startups with the tools they need, e-finance enhances its own ability to deliver on the fourth pillar of the Group’s integrated growth strategy, which prioritizes investments in dynamic startups and high-potential fintech platforms.
As we deepen our presence in the startup and fintech spaces, e-finance will win access to lucrative growth-phase technologies and platforms, diversify both the Group’s portfolio and its expertise, and offer indirect exposure to dynamic private sector markets,” Sarhan continued.
“Meanwhile, successful investments will allow us to engender profitable synergies between investors and the subsidiaries in our existing platform, and the Nclude fund also gives us an opportunity to expand our international footprint beyond Egypt and Africa. We look forward to an exciting new journey with Nclude, and to deepening strategic alignment between ourselves and our partners at the Central Bank and in Egypt’s commercial banking sector,” he concluded.
