Saudi Arabia: a Leading Fintech Hub in MENA
Saudi Arabia is one of the Middle East's most active nations in promoting financial technology, working to boost the number of investments and startups participating in this sector. Precisely, the fintech sector is growing rapidly in the country, especially, when compared to previous years.
The kingdom has launched a fintech strategy as a new pillar within Saudi Vision 2030 Financial Sector Development Program (FSDP), aiming to support the country to be the leading fintech hub in the region.
Fintech in Saudi Vision 2030
By 2030, the strategy aspires to grow the number of fintech companies in the Kingdom to 525, hire 18,000 more people in this sector, raise Gross Domestic Product (GDP) by $3.5 billion, and bring in $3.2 billion in venture capital investments.
Progress of the Fintech Sector in 2022
In 2022, the Fintech Saudi annual report has stated that the country witnessed a 79 percent increase in fintech firms compared to last year, with currently 147 active companies, just three short of the 150 active companies specified by the development plan.
On this achievement, the director of Fintech Saudi, Nezar Alhaidar, said that “This year has been a significant year for the development of the Fintech industry in the Kingdom with the launch of the Fintech Strategy, which will drive Saudi Arabia to become a global fintech hub,” according to Arab News Website.
Additionally, the fintech sector has progressively expanded to become Saudi Arabia's most well-funded sector in 2022, both in terms of the number of deals and the total amount of VC money raised, accounting for 24% of the country's overall VC financing and raising $239 million. This implies a 167% increase from 2021, based on Magnitt’s 2022 Saudi Venture Capital Report.
This growth is driven by the launch of many governmental initiatives that boost the fintech sector, such as the " Fintech Saudi” initiative, and Saudi Venture Capital (SVC).
Fintech Saudi Initiative
Founded in 2018, Fintech Saudi was launched by the Saudi Central Bank in partnership with the Capital Market Authority in order to serve as a catalyst for the growth of the financial services technology (fintech) industry in Saudi Arabia
According to its website, Fintech Saudi aims to make Saudi Arabia a center for cutting-edge fintech with a vibrant and ethical fintech ecosystem.
“We seek to achieve this by supporting the development of the infrastructure required for the growth of the fintech industry, building capabilities and talent required by fintech companies, and supporting fintech entrepreneurs at every stage of their development,” the website said.
Saudi Venture Capital (SVC) Fund of Fintech
Saudi Venture Capital Company (SVC) announced at the second edition of the Financial Sector Conference 2023 in Riyadh, held in March, the launch of the "Investment in Fintech VC Funds" product, in collaboration with the Capital Market Authority (CMA) and the Financial Sector Development Program (FSDP).
It declared an allocation of $80 million from its investment for this key product
(SVC) is a government investment company established in 2018 as a subsidiary of SME Bank, one of the development banks affiliated with the National Development Fund.
Since then, it has invested in 35 funds that have provided 525 companies with financing through 904 deals.