Egypt’s fintech sector witnessed a significant expansion yesterday as the Financial Regulatory Authority (FRA) greenlit a raft of new licenses for companies leveraging digital tools to offer financial services. The move highlights the regulator’s commitment to fostering financial inclusion and accelerating the digitisation of the non-banking financial sector, aligning with the government’s broader economic objectives.
Among the newly approved entities are established players and emerging startups spanning various segments of the financial landscape. In a notable first, insurance giants Misr Insurance and Tharwa Insurance received the go-ahead to issue zero supplementary car insurance policies electronically. Five non-banking financial companies — Hala Consumer Finance, B-Tech Finance, U Consumer Finance, MNT Tech Holding, and Bokra for Portfolio and Investment Fund Formation and Management — secured licenses to provide their full suite of services using financial technology. Additionally, Manzel Fin was approved as a new startup in the consumer and real estate finance space, capitalising on a recent FRA decision lowering the minimum capital requirement for such digital ventures. Securities brokerage also saw a digital boost, with Telda Securities Brokerage, Beltone Securities Brokerage, and Thndr Securities Brokerage all receiving licenses to offer their services via fintech platforms. Furthermore, Valu, a prominent financial technology powerhouse, has also announced the acquisition of the prestigious fintech license, signaling its intent to further integrate digital solutions into its offerings.
A striking pattern emerging from this wave of approvals is the central role played by Vlens, alongside Valify Solutions. Vlens, which commenced operations in Egypt mid last year after securing FRA approval, specialises in providing essential electronic verification services. These encompass electronic identification, verification, authentication, Know Your Customer (KYC) processes, remote smart contracting for non-banking financial services, and the electronic registration, preservation, and retrieval of digital assets.
The influential position of Vlens in this new licensing round is undeniable. The FRA explicitly stated that the five non-banking financial companies approved for comprehensive fintech operations — Hala, B-Tech, U Consumer Finance, MNT Tech Holding, and Bokra — will conduct their licensed activities “through Vlens Company”. Similarly, traditional players like Misr Insurance and Tharwa Insurance will utilise Vlens for electronic identification, authentication, and digital record-keeping in their new electronic car insurance offerings. Even established firms like Telda and Beltone have partnered with Vlens to facilitate their digital brokerage services. Thndr Securities Brokerage, while also leveraging its internal systems, will work with Valify Solutions, highlighting the presence of at least two key outsourcing providers in this evolving ecosystem.
In practical terms, Vlens acts as a crucial enabler for these newly licensed companies. For instance, a customer seeking a digital consumer finance product from Hala Consumer Finance will likely undergo electronic identification and verification processes powered by Vlens. The contractual agreement for this financing might be concluded remotely through Vlens’s smart contracting capabilities, and all associated digital records will be securely stored and retrievable via Vlens’s platform. This allows companies to onboard customers remotely, streamline operations, and maintain regulatory compliance with regards to digital record-keeping — all vital components of a fully digital financial service offering.
Given that the newly licensed entities are themselves digital service providers, the reliance on a central entity like Vlens for core operational functions positions the latter as a potentially very powerful gatekeeper within Egypt’s rapidly growing fintech landscape. Its technology underpins the ability of these companies to function effectively and meet regulatory requirements in the digital realm.
This surge in fintech licensing comes on the heels of the FRA’s decision last year to grant a one-year extension for non-banking finance companies to meet increased capital requirements. This extension, aimed at strengthening the financial stability of the sector, provided companies with more time to secure the necessary EGP 75 million (approximately USD 1.5 million). The recent flurry of license approvals suggests that many companies have now met these requirements or are on a trajectory to do so, paving the way for their expansion into digital service provision. The establishment of Manzel Fin with a lower capital threshold for digital startups further indicates a strategic push by the FRA to encourage innovation and the entry of new players into the fintech space.
The emergence of Vlens as a key outsourcing partner, alongside Valify Solutions, signifies a maturing of Egypt’s fintech infrastructure. These companies provide essential technological building blocks that allow financial institutions and startups to rapidly deploy digital services without necessarily developing all the underlying technology in-house. While this fosters speed and efficiency, it also concentrates a significant degree of influence within these outsourcing providers.
As Egypt continues its journey towards a digitally empowered financial future, the interplay between the regulator, the newly licensed fintech companies, and the influential gatekeepers like Vlens will be crucial in shaping the landscape. The current gold rush for fintech licenses signals a vibrant and dynamic sector, but the reins of key operational capabilities appear to be firmly held by a select few. The long-term implications of this concentration of influence will undoubtedly be a subject of close scrutiny as Egypt’s fintech story continues to unfold.