The Dubai International Financial Center (DIFC), the leading financial hub in the Middle East, Africa and South Asia region (MEASA) has set up a $100 million fund to empower fintech start-ups, the most recent move in the free zone’s proposition to position itself as the regional centre for the fast-growing and disruptive sector.
According to the DIFC’s governor Essa Kazim, this consolidation is occurring to make the DIFC the front and center unit for all the financial changes that are happening as well as going to occur.
Purely on a commercial basis
The investment decisions that will be made will be purely on a commercial basis, with no predetermined minimum or maximum amount of investment. Each fintech venture is different from the other, some may need as little as fifty thousand dollars in funding while some others perhaps a little more like two million.
This fund will also seek investment from various other government bodies in the emirate of Dubai to enhance its treasury. But initially, private investors are not a part of this venture.
The initiation of the new fund comes just days after the DIFC announced the beginning of two fintech accelerator programmes, designed to tutor fledgling companies and to make available introductions to more established financial services firms that may be interested in their services.
To catch the attention of other start-ups
This initiative is included along with the Fintech Hive incubator programme that was launched in the month of January this year. This was to catch the attention of other start-ups and investments in the region. Financial centers all over the Middle East, including Bahrain, Saudi Arabia, and Qatar have all initiated similar set-ups.
But the DIFC has no reason to worry about the competition from its opponents, as there is plenty of space in the fintech industry for all of them in the region; especially now when the domain is just starting up and is completely new.
In the United Arab Emirates, there are plenty of private equity businesses and firms that are looking to invest in more mature and profitable companies, but of course, they need the funding. This initiative will help in that zone and hopefully should jumpstart the fintech development in the region.
‘Navigating the New Order’
The initiative was publicized during the inaugural Global Financial Forum (GFF), prearranged by DIFC. The GFF, which took place under the theme “Navigating the New Order”, was attended by over 350 influencers from the financial services industry, which were selected out of hundreds that had applied to attend.
This proposal aims to support the expansion of emergent markets in MEASA and persuade increased trade flow through the South-South corridor, which stretches from Latin America, through Africa, India, South East Asia as well as China.
This initiative is said to transform banking, trade finance and data housing. This programme has the capability to bring financial services as well as banking to those regions that have limited accessibility.