Country: Egypt

Climate finance innovation for Africa

The African continent presents a massive investment opportunity for investors to advance climate solutions in the coming decade, however, a set of barriers to finance have stifled requisite investment to date. In this new report, in collaboration with Climate Finance Innovation for Africa and Climate Policy Initiative, we provide a framework for how innovation in financing structures can leverage strategic deployment of public capital to ‘crowd-in’ private investment at levels not yet seen.

This paper focuses primarily on climate mitigation, which represents the largest investment opportunity for private investors. We refer audiences focused specifically on adaptation to the work done by the Global Center on Adaptation and Climate Policy Initiative on Financial Innovation for Climate Adaptation in Africa.

The British Embassy in Egypt celebrates milestone achievements in climate finance, and new UK-Egypt bilateral agreements

Posted on by TIMOTHYRADIER

04 October 2022, CAIRO – Today, the British Embassy in Egypt hosted an event marking “One Month to Go to COP27”, celebrating the UK and Egypt’s growing green partnership.

The event marked the launch of the UK’s Climate Finance Accelerator in Egypt, a new programme which will help low-carbon projects access the funding they need. Attendees also witnessed the signing of a Memorandum of Understanding (MoU) between FSD Africa and the Egyptian Financial Regulatory Authority (FRA), to help make the financial sector in Egypt more sustainable.

The event began with opening remarks from British Ambassador to Egypt Gareth Bayley, followed by a keynote speech via phone conference from Minister of Environment Dr Yasmine Fouad, who said that the Climate Finance Accelerator is essential and critical mechanism for financing climate change.

The event also included a panel discussion on climate finance moderated by the CFA team. Panellists included Dr. Dalia Abdel Kader, Chief Sustainability Officer CIB, as well as other experts in the field.

The Climate Finance Accelerator is already making a difference elsewhere in Africa and around the world.  It is great news that Egypt will now feature as part of this innovative approach to help low-carbon projects secure investment. Climate financing is one of the key demands for COP27, and with the introduction of such a programme in Egypt, we show that we are not only listening, but also taking action. I am also particularly proud to witness today the signing of the Memorandum of Understanding between FSD Africa and the Financial Regulatory Authority to help make the Egyptian financial sector more sustainable. Such achievements showcase the real strength of the UK and Egypt’s growing green partnership.”

Gareth Bayley, British Ambassador to Egypt

New partnerships to enhance Egypt’s financial market

Posted on by Kihingu Inc

Enhancing Egypt’s efforts on ESG, strengthening local and regional insurance businesses and supporting investments towards innovation for climate resilience.

Egypt’s financial market is set to benefit from announcements made by the UK government in partnership with FSD Africa in enhancing activities aligned to decarbonisation, resilience, and natural capital.

Through a series of stakeholder engagements and high-level meetings with leading institutions and policymakers, the partners identified and committed to supporting Egypt’s efforts in climate risk management and human development by paying special attention to the country’s vulnerable populations.

Since 2016, Egypt has undertaken a series of reforms aimed at strengthening the local economy and attracting foreign investments. These reforms have helped the economy avoid many of the adverse impacts of the Covid-19 pandemic. As the Egyptian economy looks to recover and respond to new challenges, including the economic impact of the war in Uk initiatives such as those announced this week will further boost national efforts for building a more resilient economy.

Key highlights of the engagements include:

Support towards innovation for climate resilience

Egyptian-based tech start-up Baramoda won a Fintech x Climate Resilience Startup challenge. The challenge sought to identify solutions working to improve the resilience of climate-vulnerable communities in Africa.

Baramoda’s solution focused on maximizing the efficiency of agri-waste management by addressing soil pollution and agricultural waste. Baramoda innovates organic soil improvers and fertilizers from different types of agricultural waste. This tailored compost is made from organic and natural components for the health of Egyptian land.

Recently, FSD Africa announced similar support for Africa-focused fintech startups with solutions that enable climate resilience in the most vulnerable communities.

FSD Africa also participated in an eye-opening investor roundtle with leading Egyptian venture capitalists hosted by the American University in Cairo (AUC) Venture Lab discussing Climate Resilience solutions.

Sign-up for The Nairobi Declaration

FSD Africa recognises the contribution insurers can make to climate change and in producing better outcomes for the continent. To this end, the organisation has urged Egypt-based stakeholders to commit to the Nairobi Declaration on Sustainable Insurance as a first step toward creating a sustainable insurance industry and building resilience for the continent.

The partners have stressed the importance of all businesses across Africa in engaging with the net-zero ambitions, agreeing that by playing its role, the insurance industry will be critical in building a sustainable environment for the future.

MoU with the Egyptian Financial Regulatory Authority to advance the implementation of ESG principles in North Africa

FSD Africa is in advanced discussion with the Egyptian Financial Regulatory Authority (FRA) to jointly drive the integration of ESG principles across the insurance sector in Egypt. Through the MoU, FSD Africa and the FRA will directly engage with local insurers and, in due course, work together to deliver the Africa Climate Finance Leadership Course in North Africa.

The Africa Climate Finance Leadership Course will enhance the capacity of regional policymakers, regulators, academia, and financial market participants to support climate-related projects. The training will also provide guidance for these regional actors to access climate funds from global sources and fast-track capital mobilization for climate projects across North Africa.

FSD Africa is committed to working with regulators and government agencies to identify, mitigate and manage climate risks and opportunities. Through our new partnerships, Egypt and its neighbouring countries will have an opportunity to significantly address the risks of climate change and accelerate the transition to a high-potential green economy.
Mark Napier, CEO – FSD Africa

The Arab Financial Inclusion Innovation Prize returns for its third edition

Posted on by Kihingu Inc

Take financial inclusion to the next level

The Arab Financial Inclusion Innovation Prize (AFIIP) is back to scout and support the most innovative solutions that can make financial services more accessible and affordable for the low-income and MSMEs in the Arab world.

AFIIP is offering prizes of up to $60,000 USD in cash and technical support to ideas, products and services that can improve financial inclusion in the region.

Since 2018, the Arab Financial Inclusion Innovation Prize has identified over 200 innovators in the region. AFIIP has supported solutions span the financial services sector, from start-ups to incumbent institutions, operating in microfinance, digital payments, financial literacy, digital identity, and beyond. AFIIP provides winners with multi-year technical support and gives them access to a global network of thought leaders and investors to help take their ideas to the next level. Applications are judged on their impact, feasibility and marketability by a panel of world-class experts.

This year, AFIIP is also providing additional resources to innovations that can generate green outcomes. There is a second stream to the prize looking for financial solutions that can help mitigate the risks of climate change, increase environmental resilience for the low-income and MSMEs, provide sustainable opportunities to the underserved and enhance the green finance ecosystem of the Arab world.

The call for applications is now open, with the support of SANAD Technical Assistance Facility, FSD Africa and UK aid from the UK government and Spectrum Digital Holdings.

Visit www.afiip.org to learn more and apply.

Together, we can put financial inclusion at the heart of innovation in the Arab world.

Winning AFIIP gave us the opportunity to prove our vision. Two years on, their team continues to engage us in a wide-reaching and fruitful network.
Valify Solutions, 2019 winner

 

11 startups showcase solutions to address COVID-19 challenges in Egypt at DFS Lab demo day

Posted on by Kihingu Inc

The demo day was hosted by the Central Bank of Egypt in collaboration with the Financial Regulatory Authority, supported by FSD Africa, through UK aid from the UK government.

Key Facts

–11 FinTech companies were selected from a competitive pool of applicants to build solutions for participating Egyptian banks and financial institutions to address COVID-19 related challenges

-The FinTechs were paired with a bank or financial institution for an innovation sprint to rapidly develop products and services to address specific challenges brought on by COVID-19

-Participating banks and financial institutions have an opportunity to move forward with potential solutions as a result of the demo day

Eleven FinTech companies showcased innovative solutions at a virtual demo day that addressed challenges for Egyptian banks and financial institutions due to the pandemic. The eleven companies spent three days working closely with participating banks and financial institutions in a virtual innovation sprint which culminated in the demo day, facilitated by DFS Lab, a digital commerce investor and accelerator. Under the host of the Central bank of Egypt and in collaboration with the Financial Regulatory Authority, banks and financial institutions participated in the innovation sprint and demo day to identify potential products and services they could bring to market. The innovation sprint and demo day were supported by FSD Africa, through UK aid from the UK government.

COVID-19 has made the need for alternative financing and credit solutions more urgent, and more vital. It is fantastic to see the success of this UK-supported virtual innovation sprint, and the creative solutions developed. From digital payment systems to flexible finance, these solutions will help businesses to bounce back stronger.
James Cleverly, UK Minister of State for the Middle East and North Africa

Stephen Deng, Partner at DFS Lab said:

“Our aim with the COVID-19 Innovation Sprint in Egypt and the resulting demo day was to positively impact end users by connecting banks and financial institutions with companies who can move quickly to solve COVID-19-related challenges and bring these products and services to market. Some of the challenges companies worked to solve include making it easier for people in rural areas to sign up for bank accounts or other financial services, or easing the process of data access for regulators so they can make timely decisions.”

Mark Napier; CEO of FSD Africa said”This year fintech has been able to show its value in the financial sector’s fight against COVID-19. FSD Africa is proud to support the COVID-19 Innovation Sprint and the eleven FinTech organisations that were selected from across the world to build solutions in collaboration with key actors in Egypt’s financial market. These solutions will have a direct and positive impact on people’s lives – from providing digital solutions to the need for cashless payments to creating new ways for businesses to access credit in order to survive the pandemic. We wish them wel”

The participating FinTech companies are:

  •  Flutterwave: a global digital payment platform with expertise in providing access to payment schemes across Africa, Europe and North America via a single integration process for acceptance and disbursements of digital payments.
  •  CreditFins: building MENA’s first Credit Card management app that helps customers analyze their spending, get access to educational content and settle their debt faster and cheaper.
  •  TurnKey Lender: provides a loan management solution to automate the application processing, credit scoring, decision making and underwriting processes to manage different types of lending.
  •  Finllect: a financial wellness app for Gen Z to build credit, prequalify for financial services and automate their finances, enabling underserved, low-income, and unbanked consumers to build a free credit score in minutes.
  •  Valify: building foundations and guiding legislation towards the implementation of electronic KYC as a standard practice for remote customer on-boarding.
  •  Dor-e: a customer experience platform that allows customers to book and track their place in line remotely while giving banks and businesses a real-time view of branch performance
  •  Digify: provides Digital Identity Verification Solutions, end to end e-KYC management systems.
  •  Elucidate: an independent RegTech for financial crime risk assessment.
  •  Enterprise Tiger: a digital omni-channel suite of software products for banking and 
financial services institutions including an omni-channel digital contact to customer 
software and an omni-channel digital end to end delinquency management software.
  •  Dayra: a fintech company empowering businesses to offer financial services such as 
pre-paid cards, micro-loans and micro-insurance to their unbanked gig workers and 
customers.
  •  NEC Payments: a licensed and regulated payment services provider and card 
processor that provides vertically-integrated Banking-as-a-Service and offers digital banking, transaction processing, financial control and compliance technology solutions under licensed and SaaS distribution models.

Participating banks and financial institutions have an opportunity to move forward with potential solutions developed by the eleven FinTech companies as a result of the demo da

DFS Lab announces fintech and digital economy design sprint to address COVID-19 challenges for the financial community in Egypt

Posted on by Kihingu Inc

The three-day innovation sprint will take place in March, 2021

DFS Lab, a digital commerce investor and accelerator that partners with early-stage digital economy startups in Africa, announced it will facilitate a virtual innovation sprint in March 2021. The sprint is hosted by the Central Bank of Egypt, in collaboration with the Financial Regulatory Authority and is supported by FSD Africa, through UK aid from the UK government. This event will offer participating startups an opportunity to bring their solutions to market via a relationship with Egyptian banks and financial institutions and other solution-seeking organizations.

Startups focused on digital commerce and finance, including cashless payments, identity, digital invoicing and supply chain payments, regulatory interactions, and other commerce tools are responding to changes in consumer demand. Many of these innovations could be deployed in the fight against COVID-19.

Stephen Deng, Partner at DFS Lab said:

“Under the host of the Central Bank of Egypt and in collaboration with the Financial Regulatory Authority, DFS Lab has partnered with FSD Africa on a COVID-19 innovation sprint that aims to unearth, develop, and refine FinTech solutions tt directly address the pandemic in Egypt. This event will bring together Egyptian banks and financial institutions that are seeking solutions to COVID-19 with international and local innovators who are rapidly creating the products and services to help Egypt’s financial sector solve current COVID-19 challenges.”

FSD Africa believes FinTech startups, with their energy, focus and expertise, can play a transformational role in tackling the unprecedented challenges that Egypt is facing as a result of COVID-19. The innovation sprint, hosted by the Central Bank of Egypt and implemented by the DFS Lab, will provide a platform to showcase the many existing innovations that can be adapted and scaled up to support the country. We hope that this sprint will be just the beginning of long-lasting and sustainable relationships built between all players and allow FinTech to be part of the COVID-19 solution.
Mark Napier, CEO of FSD Africa.

The innovation sprint will culminate with a demo day where Egyptian banks and other financial institutions are able to see the solutions startups present and can choose to move forward, bringing products and solutions to market.,

Savings groups and women’s financial inclusion

Posted on by Kihingu Inc
Join us in celebrating International Women’s Day 2018!

Through our #PressforProgress campaign, we are proud to share information about our partnerships that are supporting women’s economic empowerment in a variety of ways.

 

 

The SEEP Network is a collaborative learning network that supports strategies for vulnerable populations, especially women, to participate in markets and improve their quality of life. FSD Africa has partnered with SEEP to build and apply knowledge and evidence on savings groups in order to improve the ability of these groups to reduce vulnerability and enhance access to economic opportunities amongst their members, especially women and the rural poor.  Research shows that savings groups contribute towards women’s economic empowerment by expanding access to basic financial services and support networks. They serve as a means for women in marginalised environments to smooth out uneven cash flows and become more resilient to shocks.

To learn more on how saving groups have enhanced women’s financial inclusion, read this briefing note by David Panetta from the SEEP Network.

Crowdfunding in motion: seven things we learned about P2P markets in East Africa

Posted on by TIMOTHYRADIER

Less than a month ago, on 15 June 2016, the crowdfunding industry in East Africa came together for the first time in Nairobi. This East African Crowdfunding Indaba & Marketplace was co-hosted by FSD Africa and the Kenya Capital Markets Authority, and attended by 65 representative from across the crowdfunding industry in Kenya, Rwanda, Tanzania and Uganda.

But, what did we learn? We boil it down to seven key points:

  • East African crowdfunding markets are on the move. Crowdfunding markets in East Africa remain nascent, but are growing. According to forthcoming research by Allied Crowds and FSD Africa, crowdfunding platforms (donation, rewards, debt and equity) raised $37.2 million in 2015 in Kenya, Rwanda, Tanzania and Uganda. By the end of Q1 2016, this figure reached $17.8 million – a 170% year-on-year increase. Today, there are no platforms located in Tanzania, 1 in Rwanda, 1 in Uganda, 3 in Kenya, 10 in South Africa, with a further 55 located beyond these countries, but doing business within them. Ths platform landscaping report is scheduled for publication in July 2016.
  • East Africa’s platforms report promising progress. Since its launch in September 2012, M-Changa has raised $900,000 through 46,000 donations to 6,129 fundraisers. Popular uses of M-Changa donations include: medical expenses (24%), business activities (24%), education expenses (12%), and funeral expenses (7%). The platform also reports 100% year-on-year growth rates. Since the launch of its pilot phase in December 2015, Pesa Zetu has dispersed c.1,200 loans via mobile phones to low income Kenyans – of loan sizes between $20 and $100 – to test its credit models, processes and technology platform. So far, Pesa Zetu has dispersed c.$59,275 in total. Scale-up in Kenya is planned for Q4 2016. Since its inception in March 2015, LelapaFund has screened over 350 SMEs in East Africa and beyond, and engaged over 30 in due diligence and investment readiness processes in Kenya. Pending regulatory approval, it hopes to open access to its first deals on the platform in 2016. During the event, each platform reported regional ambitions.
  • Global crowdfunding markets are growing fast but also evolving. According to primary and secondary research by CGAP, the finance raised by crowdfunding platforms worldwide increased from $2.7 billion in 2012 to an estimated $34 billion in 2015. This figure is expected to reach $96 billion by 2025 in developing countries alone. Today, there are approximately 1,250 active platforms globally. They typically fall into four typologies (donation, rewards, debt and equity), but hybrids are fast emerging. In the UK, up to 40% of the capital raised by P2P platforms is institutional in its origin.
  • East Africa’s MSMEs express a demand for alternative finance, but they’re not always investment-ready or able to locate financiers. According to LelapaFund research, c.45% of Kenyan start-ups sampled require between $10,000 and $50,000 growth capital, while c.40% require between $50,000 and $250,000 for expansion/export (22%), marketing (23%) and product development (29%). For Kenyan SMEs, c.50% of firms sampled require between $100,000 to $500,000 for expansion/export (40%), marketing (21%) and product development (29%). Both start-ups and SMEs received more capital from friends and family than banks. Vava Coffee reported difficulties locating and accessing sources of non-bank finance, especially as a female entrepreneur. The firm also highlighted the importance of data and evidence when raising finance because it demonstrates a track record. LelapaFund has committed significant resources to identify investment-ready SMEs for its platform. Of 350 Kenyan SMEs screened, less than 10% proceeded to due diligence phase. Financial literacy training for SMEs, low cost due diligence models, improved signposting of SMEs to sources of investment and the use of Company Registry data were suggested as means to address a lack of investment-ready SMEs in the region.
  • There are both commercial and development opportunities for crowdfunding platforms in East Africa. Through their use of technology, crowdfunding platforms have the potential to mobilise and allocate capital more cheaply and quickly than the banking industry and development agencies. This could lead to the disintermediation of both through increased efficiency and competition, as well as increased access to finance for low income individuals and growing companies. Where mobile phone technology is currently used to provide micro-savings and micro-credit in East Africa, interest rate spreads remain significant – c.3% p.a. for saving, and c.90% p.a. to lend. This presents a market opportunity, particularly for P2P debt finance platforms.
  • Crowdfunding risks and the regulatory environment. Globally, many crowdfunding markets are not yet regulated. The unique nature of crowdfunding models means that they straddle traditional payments, banking and securities laws. In jurisdictions where financial industry regulators are not consolidated into a single unified authority, platforms may also straddle regulating departments. In some countries, such as the New Zealand, the United Kingdom (UK), and the United States, crowdfunding is subject to special tailored regimes. In the UK, for example, the Financial Conduct Authority has developed a Regulatory Sandbox, which provides a safe space for innovative firms to test products and services with real consumers in a real environment, without incurring all of the normal regulatory consequences of engaging in this activity. In East Africa, there is no specific regime for crowdfunding regulation. Instead, sections of existing banking and securities legislation are used, but are open to interpretation. However, there is evidence of innovation. In Kenya, for example, Section 12A‪ of the Capital Markets Act provides a safe space for innovations to grow before being subject to the full regulatory regime. During the event, the Kenya Capital Markets Authority, Rwanda Capital Markets Authority, Uganda Capital Markets Authority, and CGAP’s consumer protection specialist expressed cautious optimism about the future of crowdfunding markets in East Africa, noting particularly risks around: inexperienced borrowers and investors, digital fraud, data protection and non-performing loans/investments.
  • There’s appetite to do business and to learn more from across East Africa. A total of 65 participants attended the Indaba & Marketplace from all corners of the East African market: a) supply-side (crowdfunding platforms, impact investors and micro-finance institutions such as Pesa Zetu, M-Changa, LelapaFund, Novastar Ventures, Letshego Holdings), b) demand-side (SMEs and consumer protection specialists such as Vava Coffee, EcoZoom, Burn), c) business service providers (data analytics firms, law firms, market intelligence firms and technology providers such as Anjarwalla & Khanna, IBM, Zege Technologies, Allied Crowds, Digital Data Divide, Open Capital Advisors, Genesis Analytics, Intellecap), d) rule-makers (regulators and policy makers such as the Kenya Capital Markets Authority, Rwanda Capital Markets Authority, Uganda Capital Markets Authority, UK Financial Conduct Authority), and e) donor agencies (market facilitators, think tanks and aid agencies such as Access to Finance Rwanda, CGAP,  FSD Kenya, FSD Tanzania, FSD Uganda, UN Women).

So, what’s next?

First of all, for more facts and figures, please find all the presentations delivered during the crowdfunding indaba and marketplace here.

Second, we’re keen to move beyond discussion towards new partnerships and deal-making. With this in mind, please find a full list of participants here. If you’d like specific contact details then email Fundi Ngundi (fundi@fsdafrica.org), who will ask permission from the counterpart before connecting you.

Third, through partnership, FSD Africa will continue to support the development of crowdfunding markets in East Africa. The Allied Crowds platform landscaping research is scheduled for publication in July 2016. A regulator support exercise has been launched and will conclude in September 2016. It will be led by Anjarwalla & Khanna and the Cambridge Centre for Alternative Finance. Where beneficial to the poor and the wider crowdfunding market, FSD Africa will also provide light touch support to platforms themselves. If there’s demand, there could be scope for a follow-up Indaba and Marketplace in early 2017. If you’d like to collaborate then please be in touch.

Lastly, thank you to all the speakers, panelists, facilitators and participants for your lively contributions last week. Albeit steadily, crowdfunding markets are on the move in East Africa!