The increasing financial inclusion rate is boosting the growth of the prepaid card segment in Egypt

Print

Email

During 2020, economic stability and the rising adoption of digital payments created significant growth opportunities for the prepaid card providers in Egypt. It is noteworthy to mention that, the support from the International Monetary Fund (IMF) and the Egyptian government’s better policy management to support the financial sector helped the economy to stay positive during the pandemic period.

Moreover, the increasing mobile penetration rate in the country also expanded the digital payment ecosystem. Notably, the mobile penetration rate reached 98.57% as of May 2021, according to the Ministry of Communications and Information Technology (MCIT).

The high mobile penetration rate even among the unbanked category is encouraging Egypt in its shift to digitalization and FinTech to bridge the banking gap in underserved areas. Notably, Egypt has put financial inclusion as one of its top priorities as part of the 2030 Vision goals. Consequently, the Egyptian Government is directing towards a cashless society. This is because of its impact on the economy by launching a number of initiatives that will, directly or indirectly, assist the growth of the FinTech industry in the country.

Moving towards digitalization, Egypt has offered technology-based policies even before the coronavirus outbreak. The government launched prepaid Meeza cards in 2019, allowing more people to deposit and withdraw cash, repay governmental dues, and transfer payments. This, alongside other policies such as increasing point-of-sale (POS) machines and establishing EGP1 billion FinTech innovation fund to finance startups across the country, has boosted financial inclusion in Egypt. For instance,

According to the Central Bank of Egypt, the financial inclusion rate in the country reached 54% as of May 2021, up from 32.8% in 2017. It is expected that financial inclusion in Egypt to reach a rate of around 80% over the next few years, which will further drive the growth of the prepaid card segment in the country.

Moreover, FinTech companies are also working to boost awareness about digital banking services in rural areas. Consequently, PayNXT360 maintains a positive outlook for the growth of the prepaid card industry in Egypt over the next four to eight quarters.