Fintech and Entrepreneurship Boosting in Developing Countries: A Comparative Study of India and Egypt

Abstract

Financial Technology or what is so-called “Fintech” is one of the prominent sectors that have been introduced by the Fourth Industrial Revolution at the beginning of the second millennium. The Fintech sector is providing a variety of innovative digitized financial activities in the aims of improving and facilitating traditional financial services as they are often faster, cheaper, easier to access. The rise and development of Fintech sector in today’s world is playing a crucial role in increasing the financial inclusion levels among individuals as well as among businesses, especially the Micro, Small and Medium Enterprises (MSMEs). Higher financial exclusion has a major negative impact on poverty and income distribution in societies. About 2.5 billion people and over 200 million businesses are still excluded from the formal financial system which is restraining economic growth, job creation and employment opportunities [13]. Similarly, in India, the figures of the unbanked population counted for 190 million adults without a bank account [13]. For a population size of more than 98 million people, 77% of adults in Egypt are not having a formal bank account [30]. The main objective of this study is to understand how the digitization of financial services can play a major role in increasing inclusive growth and entrepreneurship with a special emphasis on the Indian and Egyptian cases. This study is based on a theoretical and conceptual framework. The study examines various archival, reports of national and international organizations. The findings of the study are showing that the Fintech sector is having immense opportunities for enhancing entrepreneurship and economic growth in developing countries. The Fintech sector in Egypt is still new but rapidly expanding. In comparison with the successful Indian Experience, the digital financial ecosystem in Egypt is facing a major shortfall.