The Impact Of The Middle East’s Fintech Boom On Economic Inequality In The Region
Recently, a collection of social enterprise and entrepreneurship experts convened at Amity University in Dubai for the second annual National Treasure Conference, a gathering focused on the role that socially responsible for-profit ventures should play in achieving the Sustainable Development Goals set by the United Nations in 2015. One conversation that was surely on the minds of many of the participants: will the Middle East’s fintech boom increase -or decrease- economic inequality?
History tells us that any new technology can lead to one of two diametrically-opposed social outcomes: the technology can help balance the distribution of global wealth, or it can deepen economic and social inequality. The financial technology (fintech) revolution in the Middle East has led to just such an inflection point, but to what end? Will the new crop of fintech companies increase or decrease the staggering levels of inequality in the region?
The past decade has shown that fintech can be a powerful force for equality. Blockchain, data analytics, and mobile phone technology are evolving at breakneck speed and have shown potential to bridge the gap between the rich and the poor. Safaricom’s mobile-money platform, M-Pesa, reaches an estimated 96% of households in Kenya, and is credited with lifting at least 200,000 Kenyan households out of poverty. The Indian mobile wallet, PayTM, has nearly 200 million users, including women and rural families that can now participate in the digital economy. Will the Middle East produce companies of the same caliber and social impact? There is certainly an opportunity, thanks to three factors.