Bahrain Wants To Lead The Fintech Revolution

Fintech startups are welcome in Bahrain as the country moves up the digital ladder:

Bahrain, the country of white sands and blue waters, is turning attractive also for foreign fintechs. The smaller Arab island country is shaping itself to become a fintech hub, competing with the UAE which has already made strides in nurturing startups. Even as most of its neighbors are chasing sectors beyond oil production, they have chosen related sectors like refining etc. Bahrain is chasing futuristic branch growth in the fintech sector and desires to become the platform for technology-related innovation in the Gulf. Over time, it hopes that its homegrown startups can cater to the whole of Middle East as well as African markets.

But, why fintech? Bahrain has always been a banking hub and is home to 406 financial institutions, the highest in the Middle East. Its 113 banks have an envious asset size of $192 billion. In addition to banks, other financial institutions like investment firms, insurance companies and broking firms, together contribute 17% to the country’s GDP. It is the second largest contributor to the economy, as oil makes up for 20%.

LITTLE INNOVATIONS

In spite of its large base, technology driven innovation in the sector has been abysmally low. There are less than 10 fintech companies in the country, and its population continues to rely on bank-based offerings in payments and other fintech areas, far away from the revolution that other parts of the world are experiencing. While a few global fintech firms operate in the country, there is neither large-scale innovation nor growth, in the area.