Africa & Middle East Embedded Finance Business and Investment Opportunities – 50+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q1 2022 Update
According to PayNXT360’s Q4 2021 Embedded Finance Survey, Embedded Finance industry in the region is expected to grow by 45.3% on annual basis to reach US$10,359.2 million in 2022.
The embedded finance industry is expected to grow steadily over the forecast period, recording a CAGR of 27.8% during 2022-2029. The embedded finance revenues in the region will increase from US$10,359.2 million in 2022 to reach US$39,820.0 million by 2029.
Strategic partnership with global players to drive financial inclusion through embedded lending in the Africa and Middle East region
In the Africa and Middle East region, there is a large proportion of the young population who do not have access to financial services. Targeting such consumer demographics, firms are entering into strategic alliances with global players to drive financial inclusion in the region. For instance,
• In June 2021, Aafaq Islamic Finance entered into a strategic partnership with The Social Loan Company, a Singapore-based artificial intelligence-powered cutting-edge, big data-driven credit enablement platform company.
• Under the collaboration with The Social Loan Company, the firm is planning to launch embedded lending services, thereby offering credit to the underserved young population in the region.
• Notably, The Social Loan Company has had a phenomenal upward trajectory through its flagship embedded lending brand CASHe in India over the past four years.
PayNXT360 expects more such strategic alliances with global players in the embedded lending industry over the next four to eight quarters, which will subsequently drive the growth of the market in the Africa and Middle East region from the short to medium-term perspective.
Strategic collaboration with online and offline businesses will be the key to driving the growth of embedded lending in the Africa and Middle East
To provide an increasing number of consumers and businesses with embedded lending solutions, PayNXT360 expects that strategic alliances with both online as well as offline businesses will be the major driving factor for the growth of the industry in the Africa and Middle East region. Notably, buy now, pay later (BNPL) firms have adopted this strategy widely in the region. For instance,
• In the Middle East, BNPL firms are aggressively partnering with various businesses across industry verticals. Dubai-based Tabby, for instance, has partnered with 2,000 global brands, which also include small and medium-sized businesses in the region. Similar, Tamara, the Saudi Arabian BNPL firm, has entered into a strategic collaboration with 1,000 merchants to offer consumers short-term loans in the UAE as well as Saudi Arabia.
While the BNPL sector is growing strongly in the online space, PayNXT360 expects that strategic partnerships in the offline space will remain a key factor in driving the industry's future growth in this region. This is primarily because businesses are reopening again as the effect of the global pandemic subsides and consumers return to physical stores. Consequently, future growth will be driven by partnerships with offline retailers in the region.
Embedded insurance market gained a huge traction in mobility sector in the Africa & Middle East region
The Africa & Middle East region witnessed significant growth in the embedded insurance demand by the mobility sector. Moreover, the embedded insurance market has already crossed the growth stage in the mobility embedded insurance product life cycle and now are moving towards the maturity stage at a considerable pace. The market witnessed numerous collaborations among ride-hailing, driver-sharing, and embedded insurers. For instance,
• Uber (India) launched in-ride embedded insurance for its drivers and delivery partners across Saudi Arabia in 2018.
• Additionally, in In December 2019, UAE based ride-hailing app Careem (Uber’s subsidiary) launched in-ride insurance for passengers and drivers across 15 cities. The insurance policy will cover up to $20,000 in expenses incurred due to death or major injury sustained during a Careem ride.
The developments mentioned above show that the mobility sector has provided embedded insurance to its clients and drivers for years. Additionally, the market for mopeds and e-bikes is expanding rapidly due to the surge in food and grocery delivery requirements due to the Covid-19 pandemic. As a result, insurtech firms have been drawn to capitalize on the expanding market for usage-based insurance for e-bike and moped fleets.
Market participants are introducing new products through newly obtained funds. The launch of new products will assist fleet businesses by providing flexible and seamless embedded insurance options. For instance,
• In August 2020, Israel-based mobility insurtech firm Bambi Dynamic raised US$ 6 million led by MS&AD Ventures and backed by existing investor The Phoenix Insurance Company. The newly raised funds were utilized to enhance its offerings across the mobility sector.
The Africa & Middle East embedded payment industry is going through a trial phase, and incumbents in the payments market ecosystem must evolve to stay relevant in the industry, as the everchanging demand from clients is making the current system outdated.
Established and new-age fintech companies have invested heavily in embedded payment solutions in the last four to six quarters, resulting in market growth.
Moreover, customers expect e-commerce platforms to provide a smooth buying experience. Embedded payment can be the solution to this ever-growing client requirements. This also allows the companies to provide value-added benefits to clients and increase loyalty. Consequently, PayNXT360 expects strong market growth over the next four to eight quarters.
The embedded payments industry is still in its nascent stages of development in most of the big economies such as Egypt and the UAE. However, in the last six to eight quarters, it was observed that a spike in the number of start-ups in the embedded payment market, spurred by the collaborative efforts of the governments and other stakeholders, enhanced the payment systems.
The region has several diverse factors driving the market growth, including a vast economy, a large young population, and an abundant skilled workforce. As a result, the region has enormous potential to grow its fintech industry in 2022 and beyond.
This report provides regional insights into key trends and drivers along with a detailed data centric analysis of market opportunities in embedded finance industry at regional and country level. Region and countries included in this report are:
1. Africa & Middle East
6. Saudi Arabia
7. South Africa
9. United Arab Emirates
This report provides regional insights, along with an in-depth data centric analysis of the Embedded Finance industry in the Africa & Middle East, covering 50+ KPIs for each region and country (350+ charts and 300+ tables in all). Below is a summary of key market segments:
Embedded Finance Market Size and Forecast
Embedded Lending Market Size and Forecast
• Embedded Lending by Consumer Segments, 2020 – 2029
-- Business Lending
-- Retail Lending
• Embedded Lending by B2B Sectors, 2020 – 2029
-- Embedded Lending in Retail & Consumer Goods
-- Embedded Lending in IT & Software Services
-- Embedded Lending in Media, Entertainment & Leisure
-- Embedded Lending in Manufacturing & Distribution
-- Embedded Lending in Real Estate
-- Embedded Lending in Other
• Embedded Lending by B2C Sectors, 2020 – 2029
-- Embedded Lending in Retail Shopping
-- Embedded Lending in Home Improvement
-- Embedded Lending in Leisure & Entertainment
-- Embedded Lending in Healthcare and Wellness
-- Embedded Lending in Other
Embedded Insurance Market Size and Forecast
• Embedded Insurance by Industry, 2020 – 2029
-- Embedded Insurance in Consumer Products
-- Embedded Insurance in Travel & Hospitality
-- Embedded Insurance in Automotive
-- Embedded Insurance in Healthcare
-- Embedded Insurance in Real Estate
-- Embedded Insurance in Transport & Logistics
-- Embedded Insurance in Others
• Embedded Insurance by Insurance Type, 2020 – 2029
-- Embedded Insurance in Life Segment
-- Embedded Insurance in Non-Life Segment
• Embedded Insurance by Type of Offering, 2020 – 2029
-- Embedded Insurance in Product Segment
-- Embedded Insurance in Service Segment
Embedded Payment Market Size and Forecast
• Embedded Payment by Consumer Segments, 2020 – 2029
• Embedded Payment by End-Use Sector, 2020 – 2029
-- Embedded Payment in Retail & Consumer Goods
-- Embedded Payment in Digital Products & Services
-- Embedded Payment in Utility Bill Payment
-- Embedded Payment in Travel & Hospitality
-- Embedded Payment in Leisure & Entertainment
-- Embedded Payment in Health & Wellness
-- Embedded Payment in Office Supplies & Equipment
-- Embedded Payment in Other
Embedded Wealth Management Market Size and Forecast
Reasons to buy
• In-depth Understanding of Embedded Finance Market Dynamics: Understand market opportunities and key trends along with forecast (2019-2028).
• Insights into Opportunity by end-use sectors – Get market dynamics by end-use sectors to assess emerging opportunity across various end-use sectors.
• Develop Market Specific Strategies: Identify growth segments and target specific opportunities to formulate embedded finance strategy; assess market specific key trends, drivers, and risks in the industry.
• Get Sector Insights: Drawing from proprietary survey results, this report identifies opportunities across embedded lending, embedded insurance, embedded finance, and embedded wealth sectors.
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