Middle East & Africa Banking-as-a-Service Market Poised for Growth: Projected to Reach US$ 109.02 Billion by 2030 with a 7.4% CAGR

Middle East & Africa Banking-as-a-Service (BaaS) Market Overview

The Middle East and Africa (MEA) Banking-as-a-Service (BaaS) market is on a robust growth trajectory, valued at USD 66.14 billion in 2023, and projected to reach USD 109.02 billion by 2030. This growth translates to a compound annual growth rate (CAGR) of 7.4% between 2024 and 2030.

Current Market Dynamics

Despite appearing modest compared to other leading regions, the BaaS sector in the MEA is supported by several vital trends:

• Demographics: With a population exceeding 460 million, approximately half under the age of 26, there is a significant demand for innovative financial solutions, particularly among tech-savvy younger generations. This demographic trend is a primary driver of the adoption of BaaS platforms.
• FinTech Landscape: In 2022, around 470 FinTech companies in the Middle East raised nearly USD 2.1 billion in venture capital, up from just 30 companies raising USD 78 million in 2017. This surge demonstrates a growing confidence in the region’s FinTech ecosystem.
• Investment Focus: The bulk of funding has been directed towards active segments within FinTech, particularly payments and exchanges, which account for approximately 80% of all FinTech activity in the region. Other growing segments include insurance, online banking, fundraising, RegTech, blockchain, and cryptocurrencies.
• Central Bank Initiatives: According to the Bank for International Settlements, 80.5% of central banks are involved in central bank digital currency (CBDC) initiatives, with countries like the UAE, Saudi Arabia, and Israel leading the way. The introduction of CBDCs enhances regulatory control and promotes the growth of BaaS.
• Embedded Finance: Companies outside the traditional financial sector are increasingly adopting BaaS through embedded finance, allowing them to integrate banking services into their existing offerings. The embedded finance sector is expected to grow fivefold, from USD 22.4 billion to over USD 270 billion by 2027.

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Segment Analysis

By Service

The FinTech segment led the BaaS market in 2023, with an anticipated growth rate of 8.1% during the forecast period. The segmentation by service includes:

• Banking IaaS
• Banking as a Platform
• FinTech SaaS
• Non-Banking Financial Companies (NBFCs)

By Enterprise

• Small and Medium Enterprises (SMEs)
• Large Enterprises

Regional Insights

The United Arab Emirates (UAE) stands out as a leading hub for FinTech innovation, comprising 23.5% of the region’s FinTechs. Following closely are Morocco (12.5%) and Egypt (10.5%). The UAE is ranked 25th globally in terms of competitiveness for BaaS market players, reflecting significant advancements in ICT infrastructure and a conducive regulatory environment.

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Key Players in the Market

Several companies are at the forefront of the Middle East & Africa BaaS market, including:

• Sarwa.Co
• Beehive
• NOW Money
• Telr
• Mamo Pay
• Felix
• Jingle Pay

Future Outlook

This research provides stakeholders with a comprehensive understanding of the MEA Banking-as-a-Service market, highlighting key trends, growth opportunities, and competitive analysis. The report incorporates historical data and forecasts, along with an examination of external and internal factors influencing market dynamics. It serves as a valuable guide for investors and companies looking to navigate the evolving landscape of BaaS in the Middle East and Africa.

In summary, the MEA BaaS market is positioned for significant growth, driven by demographic trends, increased investment in FinTech, regulatory advancements, and the integration of embedded finance solutions.

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