Egypt has a population of over 103 million inhabitants, growing at approximately 2 per cent a year. The enormous growth in population has created a fast-growing retail market, with $250 billion in consumer spending up for grabs. The past few years witnessed a clear uptick in digital payments, yet it is estimated that only 4 per cent of consumer spending is cashless.
Local fintech startups have been increasingly looking to fill gaps in financial services and upping the ante in the consumer spending space, enabling larger segments of society and those outside the formal banking system to gain better access to financial products and cultivate better financial management habits.
"The demographics for the Middle East and North Africa region (Mena) offer a huge opportunity for fintech startups such as ours. We are talking about more than 60 per cent of the population being under the age of 30, compared to one-third in Europe. The population is also extremely tech-savvy and always ready to embrace new technologies. Egypt is no exception, given that 50 per cent of the population is unbanked, with users not getting the true value for money because the traditional banking process is time and effort-consuming, and complex. That's why Egypt is an attractive market for Nexta," says Ahmed Hisham, CEO of Nexta.
Nexta bills itself as a lifestyle banking app. The fintech provides users with prepaid cards, enabling them to transfer payments to one another without the need to set up a bank account while allowing them to track their spending habits and perform better budgeting.
“Taking into consideration the increase in demand for a change in the way financial services are used, there is a vast number of consumer needs that should be addressed. This is where Nexta steps in with its mission, which is to offer digitally native services that help users keep up with their lifestyles and enable citizens of all backgrounds to attain financial liberty,” he adds.
Nexta announced that it has raised $3 million in investment from digital financial services provider e-finance, bringing the total amount raised to $5.2 million since its inception last year. In March this year, Nexta also raised a $2.2 million pre-Seed round led by Egypt-based fintech fund Disruptech, with participation from global investors. The newly acquired funds are expected to "tidy the startup over until its official launch", expected to take place within the coming few weeks.
The announcement came a week after its competitor Telda app announced its official launch after securing a digital licence from the Central Bank of Egypt (CBE) as well as the completion of a $20 million Seed funding round. The nascent digital banking space in the country also boasts Klivvr, a subsidiary of Orascom Financial Holding (OFH).
The three apps are each anchored by banks that have acquired a banking agent licence, recently issued by the CBE.