Committed to diversifying its oil-dependent economy through financial services among others, the largest Islamic financial market in the world has rolled out a fintech accelerator program as its financial regulators rev up their digitization efforts in line with its national agenda.
Fintech Saudi, an initiative by the Saudi Arabian Monetary Authority and Capital Markets Authority, is launching an accelerator program in collaboration with Flat6Labs, a regional start-up program and investment management company. Present in Egypt, the UAE, Lebanon, Bahrain and Tunisia, Flat6Labs has invested in over 250 start-ups with over 1,000 entrepreneurs.
Up to 10 fintech companies will be selected to participate in the three-month Fintech Accelerator program, connecting start-ups with investors and industry professionals for mentorship and coaching. The start-ups will also have an opportunity to pitch at regional and international events. The program is scheduled to commence on the 15th November 2020, with applications closing on the 25th October.
“The Fintech Accelerator is an important milestone for Fintech Saudi. Over the last year, we have seen a threefold increase in the number of fintech companies operating in Saudi Arabia and we want this trend to continue and contribute to the goals of Saudi Vision 2030. We are therefore delighted to collaborate with Flat6Labs to launch the Fintech Accelerator program that will provide entrepreneurs with the key skills, support and access they need to grow their fintech business in the Kingdom,” said Nejoud Al Mulaik, the director of Fintech Saudi.
Peer-to-peer financing platform Raqamyah and savings platform Hakbah are among the Islamic fintech companies licensed by the Saudi regulators over the last year.
Guided by Saudi Vision 2030, the Kingdom’s financial authorities have been pushing for market reforms, liberalizing the financial markets with hopes of attracting foreign dollars and sector growth. Fintech has been a core focus of the regulators. And their efforts are gradually yielding positive results: between 2017 and 2019, the value of fintech transactions grew by over 18% each year, reaching over US$20 billion in 2019. The figure is expected to exceed US$33 billion by 2023. The political will to advance the fintech agenda could bode well for its Islamic finance sector, the largest in the world according to Moody’s Investors Service. As at the end of March 2020, Saudi Arabia housed US$339 billion-worth of Islamic finance assets, a large margin over Malaysia which recorded US$145 billion-worth of Shariah assets. The rating agency forecasted for Islamic financing in the Kingdom to account for approximately 80% of system-wide loans over the next 12–18 months, from 78% last year and 70% in 2013.