Take The Lead: The Race Is On For The First Fintech Unicorn To Emerge Out Of The Middle East And Africa RegionOur challenges here relate largely to the barriers created by existing banking systems, which will take time to overcome, and regulatory challenges that regulators across the region are already working hard to rectify.

全球fintech启动现场激增the last 10 years. Today, there are 60 fintech unicorns (private companies worth US$1 billion or more) globally, including now widely recognized names such as Ripple, TransferWise, and Stripe. The US, the startup capital of the world, plays host to 30 of these. The UK, which has a much smaller startup ecosystem, but is striving to be the fintech capital of the world, punches well above its weight with 10 of the 16 in Europe overall. Asia has 12, and South America has two. The glaring omission: the Middle East and Africa has yet to see a fintech unicorn.

The race is on to be the company that becomes the first Middle East and African unicorn. As the co-founder of NOW Money, I have a unique perspective of what it will take. While I'm not saying companies in the US and Europe have had an easy ride,fintech startups in this regionwill certainly have additional obstacles to overcome to reach those $1 billion valuations.

Africa has led the way in widespread adoption of fintech innovations. African countries have seen a unique dynamic where fintech solutions have often been the first formal engagement consumers have had with financial services, unlike in the West, wherefintech companies have been providing solutionsthat replace products and services historically provided by banks.

Related:Fintech Startup Tribal Credit Secures US$5.5 Million In Funding Round

This is to say that these African solutions have leapfrogged banks entirely. The greatest example of this is Kenya's M-Pesa, which now processes over 50% of Kenya's GDP and billions of transactions annually, and has become the country's de-facto financial system for individuals and retail stores. Most M-Pesacustomers do not have a bank account; they have no need, as they can do all that they require with M-Pesa.

然而,规模较小的经济体,事务的价值观,一个d therefore, revenues have held back African fintech companies from reaching unicorn status. Differing regulations, political regimes, and customer behaviors across African countries make geographic expansion difficult, versus expanding across states in the US, or across countries in Europe, which allows "passporting" of licenses within the EU, thereby giving access to a population of more than 500 million.

Related:Rethinking Banking (With Fintech)

In the Middle East, we have larger economies -especially on a per capita basis- and relatively large transaction values, unlike our African neighbors. Our challenges here relate largely to the barriers created byexisting banking systems, which will take time to overcome, and regulatory challenges that regulators across the region are already working hard to rectify. Geographic expansion across countries in the region is difficult and slow, but it's indeed possible with a lot of perseverance.

These are well known challenges, but is there one overriding reason there are no fintech unicorns in the Middle East?I have written in Entrepreneur Middle East beforeabout how getting partnership(s) with bank(s) is the single most important thing for a fintech startup, but it remains the hardest thing to do in this region, primarily due to cultural constraints within banks.

Related:Rolling With The Punches: What's It Like Launching A Fintech Startup In The UAE

This ethos is changing, of course, but it will take time. The advantage this brings is that for homegrown startups, if they do have banking partnerships, this builds a defense that is difficult for competitors -local or international companies looking to expand to the region- to overcome. This is something we've seen at NOW Money, and we only got into this position through having a laser focus onrisk and compliance, which in turn makes banks and regulators comfortable.

年代o, although it's hard to navigate this dynamic (incidentally, it's our biggest challenge at NOW Money right now), fostering the growth of homegrown fintech startups could allow a GCC company to become the Middle East and Africa's first fintech unicorn. The race is competitive though. In Africa, there aregreat startups coming out of Egyptat the moment, and South Africa has some great innovative companies as well. Kenya is using MPesa's success to encourage more homegrown startups to flourish. Mauritius is capitalizing on its status as a global financial hub between Asia and Africa to build its growing ecosystem, which already houses a number of exciting fintech startups. Meanwhile, Nigerian fintech companies are using the advantages of the size of its population and economy to build substantial businesses.

Related:Fintech Galaxy's MENA Fintech Hackathon Tackles Challenges Faced By The Region's Financial Players

Looking towards the GCC, Saudi Arabia is the largest economy and the most populous country in the region, and with it liberalizing its economy at a frenetic pace, it looks set to host some exciting and fast-growing fintech companies in the coming years. We're currently expanding NOW Money in the Kingdom, and we are seeing a lot of progress in the way banks, regulators, and others are approaching fintech startups like us. In the meantime,the UAE remains the home to fintech in the region, and despite some issues it has to overcome, it still has the most likely of existing companies to make it big. On the other hand, Bahrain, with its open economy and recent initiatives like open banking, has made a big push to become the fintech hub for the region.

The race is on. Despite my obvious bias towards striving to make NOW Money the first fintech unicorn from the Middle East and Africa, I'm excited to be apart of the journey as the region matures. The effects are only positive for individuals -regardless of relative wealth- and the countries themselves, so we're in for an exciting few years ahead

Related:The MENA Region Is Bustling With Fintechs (And Here's How Visa Is Empowering Them)