Startups
Under-25s start-up bringing unique e-payment services to Egypt’s fintech
It is a cool surprise for anyone after discovering that the team behind recently smart electronic payment methods in Egypt, their eldest member is 25.
“Looking around, we find that cash holders, or cash collectors, are facing the risk of fraud, their money being stolen, or waiting long-time for collecting cash,” Alain El-Hajj, PayMob COO, 24, and Co-founder, said.
“We see that every merchant is having a problem in the payment methods, whether the know-how of collecting money, or problems facing delivery men themselves; cases are a lot,” he added.
Such innovative services are being used for performing payment transactions via a card or a mobile phone, paying on delivery, in store or for online shopping.
To dig deep in the journey behind our young geeks, how they are working hard to make a real change in the technology of payment in Egypt, El-Hajj, PayMob added that the team’s goal is to convert Egyptian cash payment to electronic one in order to facilitate payment among money senders and receivers in such long supply chain.
“Our main goal is to converting Egyptian society to a cash-less society, ” said El-Hajj enthusiastically.
According to El-Hajj, PayMob started operating in 2013, trying to grow and grow till it managed to provide a number of different and innovative services in payment technology.
The 15-member young team have grown after the three co-founders: Alain with his two university friends Mostafa Menessy, and Islam Shawky who were colleagues in the American University in Cairo (AUC), started to work on their own business.
Safe payment or collecting money is something critical for several segments in the society: ordinary citizens, merchants, cash on-delivery services, or online shopping.
Went through how Alain and his Co-founders enable users through technology, Mostafa Menessy, 23, PayMob CTO, say: “we provide both services for two main pillars of electronic payment operations: Acceptance and Issuance.”
For acceptance, a term refers to enabling a merchant to receive money electronically, PayMob provide online payment gateways which used by services to provide online credit card payment, credit card payment-on delivery service, which is sending a delivery man with an electronic machine for collecting money via credit cards to empower clients to depend on credit cards in payment in case they are facing any trust issues or infrastructure limitations that wouldn’t allow them to use their credit card for online purchase.
In addition, Menessy noted that credit card payment-on delivery service is one of the first of its kind idea that will have a patent license for it, as our team considered the first one to bring such a kind of payment worldwide.
“Coming to issuance, we have a lot to provide such as building mobile wallets, which means having a virtual wallet, but this is time through mobile operators, as well as through your bank. The service helps customers in doing cash-in, cash-out, and money transfers.
” Users can send and receive money through their mobiles by entering certain codes; it is a service currently used by all mobile operators in Egypt. One of our new technologies after we found that the users can only send and receive only if they are in the same network, is changing this by partnering with global and local payment networks to let it be open to receive and send among all users,” he added.
Have a general look on the Egyptian Fintech ecosystem, local experts find that regulators are still overly concerned. Regulators have to look at international standards applied in security, mobiles and operations and set a guideline and a framework for investors to choose from. Of course a clear framework will help innovate faster.
The Central Bank of Egypt (CBE), the body that is monitoring all financial transaction in Egypt, said that the country is in a dire need to be a cash-less society, welcoming more innovative providers for more electronic payment services.
According to local experts in finance, cash issuance in Egypt is too costy as it absorbs from 0.5 to 1.5 per cent of the GDP.
According to Egypt Business Directory online portal, most of online transactions carried out by Egyptians falls in the categories of electronics, airline tickets and fashion. About 75 per cent of users, in terms of demographics of these transactions, are in their 30s or less and half of them are located in Cairo.
In Egypt, only 7 per cent of the population is banked and only 7.6 million people have credit or debit cards. For e-commerce, 80 per cent relies on cash on delivery. Meanwhile, 7 per cent of the population is banked; only 7.6 million have credit and debit cards, despite the fact that the government-related institutions provided payrolls via banking accounts instead of cash.
However, the rate of credit card issuance is growing annually by more than 40 per cent, which indicates that cash dependency may decrease.
“PayMob’s team is currently processing millions of transactions and hundreds of millions of dollars per year, the company achieved a 75x growth rate in first two quarters of 2016 and plans to reach 200x before the end of the year,” according to the PayMobCEO, Islam Shawky. 25.
Shawky said that our challenge was to prove that technology innovation is not just coming from abroad, but as Egyptian innovators are able to solve many payment issues in Egypt and the region. “We envision a world where sending a payment is as easy as sending an SMS.”
“Now, we are proud to prove there are innovative applicable services we do bring to Egypt, hoping to penetrate more emerging markets around the middle east and Africa Those regions do have an appetite to new technologies that facilitate their everyday payments,” Shawky added.
Months ago, the young geeks have managed to secure a seed fund from A15, one of leading Venture Capital companies, as the later is strongly believing to achieve the collective vision of an advanced cashless society.
Al Nashmiah Farms, committed to aiding women burdened by debt and facing the threat of incarceration, offers a novel solution for them to earn their way to freedom. Under the leadership of Razan Harb, motivated by her family’s financial struggles, the farm has become a pivotal force in rescuing those ensnared in the debt trap, providing them with employment and a sense of purpose.
Harb, observing the plight of many women who took loans in hopes of improving their families’ fortunes, only to be overwhelmed by unfortunate circumstances, economic downturns, and oppressive taxes, has established a farm that serves as both a source of employment and a supplier of high-quality produce to major markets.
The farm’s operations include the provision of household essentials, emphasizing the importance of quality through methods such as nitrogen sterilization and the use of healthy packaging. Additionally, Harb has initiated work-from-home opportunities, enabling women to engage in the packing of vegetables and fruits for market and direct sales, thereby offering a sustainable model for economic independence and recovery from debt.
Selina Bieber, the Senior Director of Global Markets at GoDaddy, has predicted a significant increase in Egypt’s e-commerce revenue. By 2028, it could reach $9.88 billion.
Godaddy is forming strategic partnerships and launching initiatives to help local entrepreneurs. These efforts align with Egypt’s digital transformation goals and its Vision 2030.
In an interview with the Arabic financial news “Amwal Al Ghad,” Bieber spoke about GoDaddy’s plans and how they match Egypt’s 2023 strategy. She highlighted the company’s aim to provide effective, easy-to-use digital tools and services. By 2024, GoDaddy wants to serve more customers in Egypt by making its digital tools more widespread.
The company is working closely with the Egyptian government, especially the Ministry of Planning. They are offering training programs to improve the digital skills of startups and existing businesses. GoDaddy’s services in Egypt include domain registration, web hosting, e-commerce solutions, and digital marketing tools.
Recent surveys support Bieber’s positive outlook for e-commerce in Egypt. They show a clear trend towards digital strategies among small businesses. Many are realizing the importance of having an online presence for their growth and success.
As GoDaddy continues its partnerships and supports government digital initiatives, its influence on Egypt’s digital landscape is growing. The company is committed to sustainability and reducing its carbon footprint. It aims not just for business growth but also to contribute to a sustainable and thriving digital economy in Egypt.
The 2028 projection indicates a vast potential for e-commerce, with GoDaddy playing a key role in this digital evolution.
Lendo, a Saudi Arabia-based shariah-compliant debt crowdfunding marketplace, has raised SAR 105 million ($28 million) in Series B funding led by Sanabil Investments, a wholly-owned company by the Public Investment Fund (“PIF”). The round saw participation from Shorooq Partners, AB Ventures and other investors.
Lendo is a Shariah-compliant, debt crowdfunding marketplace that helps pre-finance outstanding invoices for businesses in Saudi Arabia. The platform is a community of creditworthy borrowers and sophisticated investors looking for alternative investments. The platform is licensed by the Saudi Central Bank (SAMA). Lendo will use the funds to support its fast-growing customer base in Saudi Arabia which has grown 3X year-on-year, introduce more innovative financing products, and accelerate market expansion plans.
“With this funding round, we are going to expand into new markets, support new and current customers, and launch new Shariah-compliant products, all the while continuing to innovate the marketplace for digital lending. We are going to make financial services more accessible, affordable, and inclusive for everyone. I am excited to see what the future holds for our company,” said Osama Alraee, CEO, and co-founder of Lendo, who also disclosed its plans for an IPO within the next few years.
Alraee has also expressed his gratitude to SAMA (Saudi Central Bank), Fintech Saudi, MCIT, Misk, and Monshaat for their unwavering support, emphasizing the pivotal role they have played in advancing financial inclusivity and fostering innovation in partnership with Lendo to reshape the financial landscape. Their dedicated efforts in advancing financial inclusivity and fostering innovation have been invaluable to us. We greatly appreciate their partnership in our mission to transform the financial landscape
Commenting on the announcement, Sanabil Investments said: “Lendo is a leading fintech company that is transforming the financial services industry in their specialist area of Shariah-compliant digital lending for SMEs. The Lendo team, especially the founders, Osama and Mohamed, have achieved a significant amount in a relatively short period, and we are eager to join their journey of increasing access to flexible financial solutions in Saudi Arabia and the region at large.”
“The growing demand for alternative, agile, and accessible lending solutions presents a significant opportunity. At Lendo, we are well-positioned to lead the charge in promoting financial inclusion not only in Saudi Arabia but also beyond. By fueling SME growth, we aim to contribute to the realization of Saudi Arabia’s Vision 2030 economic goals and to create a ripple effect of opportunity throughout the MENA region,” said Mohamed Jawabri, COO, and co-Founder of Lendo.
Lendo previously raised a SAR 27 million Series A funding round ($7.2 million) in 2021 led by Derayah Ventures with participation from Seedra Ventures and other investors, bringing the fintech’s total funding to SAR 132 million ($35.2 million).
Since the inception of Dec 2019, Saudi fintech Lendo has processed more than 2,500 financing transactions on its platform, providing over SAR 1 billion ($300 million) in financing to SMEs and generating SAR 140 million ($37 million) returns for investors.
The Small and Medium Enterprise financing landscape in the Middle East and North Africa (MENA) presents a substantial market opportunity as limited financial access continues to restrict the growth of the region’s businesses, with commercial banks hesitant to issue loans to SMEs at scale, resulting in a high percentage of declined financing requests annually. According to the International Finance Corporation (IFC), the SME financing gap is estimated at SAR 19.5 trillion ($5.2 trillion) every year in developing countries.
Lendo’s debt crowdfunding platform aims to bridge the financing gap for SMEs, which aligns with the Saudi Vision 2030 to significantly expand SME lending from 4% in 2018 to 20% by 2030.
The total value of debt crowdfunding in Saudi Arabia surged from 1.4 million SAR in 2019 to SAR 771 million in 2022, marking a remarkable 430% growth, according to SAMA’s annual fintech report 2022.
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