INTERVIEW: Noqood Holding looks to expand in Egypt, create lending company for SMEs

Doaa A.Moneim , Thursday 12 May 2022

Over the past five years, Egypt has witnessed a boom in the fintech sector, with venture capital investments rising to $159 million with 32 deals concluded in 2021, up from only $1 million raised in 2017 from three fintech deals, according to the Central Bank of Egypt’s (CBE) recent fintech report.

Deputy CEO & Group CFO of Noqood Holding Ahmed Maged

Ahram Online spoke with Ahmed Maged, Deputy CEO and Group CFO of Noqood Holding, a non-banking financial provider, about Egypt’s fintech landscape and the potentials of the local market to attract new investments.

Noqood Holding launched its operations in April in cooperation with the state-owned E-finance.

Ahram Online: How do you perceive the fintech landscape in Egypt?

Ahmed Maged: The past decade saw strong momentum in the financial technology sector locally and globally. The technological evolution and the use of artificial intelligence positively affected all industries and related operational models (health, transportation, education, banking, etc). Egypt is ranked as one of the big five countries in Africa in terms of funds invested in fintech, which indicates the attractiveness of the Egyptian market. According to our studies, investment in fintech grew by 300 percent in 2021. 

AO: What are the potentials in the Egyptian market that have helped fintech grow?

AM: Government direction and strategy is a crucial element for sector stimulation and growth. Financial technology is the main pillar of the digital transformation and “cashless society” strategy adopted by President Abdel-Fattah El-Sisi and the National Payment Council. The demographics in Egypt and the global economic challenges following COVID-19 call for the digitisation and decentralisation of financial services, and this has led to the rise of new products and services with fully automated, real-time processes and high consumer demand. Consequently, over the past few years, the amount of local and foreign investment and the number of newly established companies grew dramatically. New governmental bodies like Fintech Egypt and the Fintech Hub were established by the CBE to incubate and develop new technological innovations and entrepreneurs, and NClude Fintech Fund was established with contributions from highly ranked institutions in the banking and financial sector.

AO: Tell us about your business in Egypt.

AM: We established Noqood Holding in 2021 with EGP 50 million issued to mainly provide nonbanking financial services to further invest in financial technology-based projects, startups, and SMEs. The group consists of three operating subsidiaries: Noqood Fintech S.A.E to manage and invest in fintech-based projects and SPVs; Noqood Digital Solution S.A.E, operating mainly in software development services to serve the group internally; and Kash Now S.A.E as a special purpose vehicle to operate customised cash flow digital services that aim to fulfil real business needs and gaps inside organisations’ operational models.

We started our operations through Kash Now, serving B2B/B2B2C segments with Salary Advance, which allows employees to claim an advance on their salaries any time before their pay date. The market is full of companies seeking instant settlements and other fintech solutions, which further encourages the adoption of the Corporate Online Card solution that serves startups and SMEs with instant cash access to both governmental and local/international online payment venues.

AO: Is there any kind of cooperation between your company and the Egyptian government?

AM: All our services are customised and provided in cooperation with the state-owned financial services provider E-finance group, which represents the backbone of the government’s financial and digital network and the main arm of executing the national digital transformation strategy. Moreover, we have accessed the fintech hub established by the CBE and are currently studying and discussing different opportunities and cooperation strategies. We have also been a part of the Fintech Talks radio program released during the holy month of Ramadan.

AO: Which regulations does Egypt need to adopt for more successful fintech business?

AM: Having specially customised laws and regulations is crucial to maintaining a linear, sustainable, and healthy sector and for protecting consumers and other stakeholders’ rights. The CBE is currently in the process of finalising the Fintech Law with the legislature and the Financial Regulatory Authority.

AO: What are your plans for the Egyptian market?

AM: We are planning to expand our cash flow digital products and to achieve a footprint in Egypt through reputable and professional key accounts and customers. Moreover, we are planning within the fourth quarter of 2022 to apply for the Financial Regulatory Authority license to establish and operate an SME lending company to provide third party services through our subsidiary Noqood Digital Solutions at the beginning of 2023.

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