While there are many emerging startups around the world, it has become apparent that some places are more friendly towards innovative firms than others. It would seem that the Middle East is making a name for itself in this regard as it has recently been recognized by StartupBlink. According to a June 21, 2020 report, Bahrain and the United Arab Emirates (UAE) were ranked among the top countries for startups.
Significant Startup Growth in the Middle East
The poll considered countries around the world and was titled the Startup Ecosystem Rankings Report. It was published by StartupBlink and generated a score for each country by taking a number of factors into consideration. The data used is obtained from over 50,000 members who work within the startup sector in various roles.
Across the list, there were a number of appearances of countries in the UAE. The nation, for instance, came in 43rd overall and placed 1st in the Gulf Cooperation Council (GCC) for startup development. Bahrain, on the other hand, was ranked 2nd in the GCC.
While the ranking of Bahrain in the GCC is impressive on its own, the country also saw a leap of 20 places on the overall list. The nation was ranked 95th last year and is 75th this year. It was not the only country that has seen its ranking increase, however.
Riyadh, the capital of Saudi Arabia, saw an increase of 213 points on the overall list. This year, they are ranked 281. It was noted that Bahrain had taken great effort to create an environment that allows startups to thrive.
This includes a collaborative startup community and a framework for legal and related support systems. These are particularly important for companies that are in infancy. Some examples of these are Bahrain Fintech Bay, StartUp Bahrain, and Tamkeen, which have aided both new firms and the country’s economy overall.
Fintech Taking Root in the Middle East
While startups, in general, have benefited from the welcoming environment of the Middle East, fintech companies have seen impressive progress there. The Bahrain Fintech Bay, for example, is part of the Fintech Consortium’s global hub network and has over 100 members. These include both fintech firms and public institutions.
These have attracted many multinational firms towards the country. In 2019, Visa announced a partnership with the Bahrain Fintech Bay to support the development of fintech. The focus of the partnership will be to support innovation and educational initiatives as well as the organization of an event that discusses developments in security, payments, and risk.
The UAE fintech space has also seen foreign investment. In May 2020, MasterCard signed a memorandum of association with Hub71, which is a tech ecosystem based in the Abu Dhabi Global Market Square. The purpose of Hub71 is to assist in the incubation of global fintech startups.
As part of the partnership, Hub71 will select startups to refer to MasterCard’s Start Path program. This will help in creating mutual benefit for both the companies already in Start Path and those that are part of Hub71. Besides this, MasterCard is working with financial institutions within the country to provide support and resources for small and medium enterprises.
Efforts in FinTech From Middle Eastern Governments
The support for fintech in the Middle East has not been limited to just investments by private companies. The governments of these nations have also put measures in place to encourage the industry. In September 2019, Abu Dhabi released new guidelines for digital securities.
The guidelines released by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) help to clarify regulations put in place in 2017. According to Ahmed Al Sayegh, UAE Minister of State and Executive Chairman of ADGM, these guidelines are in an effort to stay ahead of the curve. He acknowledged that there have been ongoing changes in the global financial sector and that the authority intended to stay on top of them.
In June 2020, the Dubai International Financial Center announced that they would be investmenting in four fintech firms. The center intends to invest a total of $100 million in various fintech firms over a number of years. The firms chosen were FlexxPay, Go Rise, NOW Money, and Sarwa.
Do you think the Middle East will continue to rank higher on these lists? Is enough being done to encourage fintech? Let us know your thoughts below.