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Venture Capital Investments on the Rise in Saudi FinTech

Saudi officials inaugurating the Financial Technology Center (Asharq Al-Awsat)
Saudi officials inaugurating the Financial Technology Center (Asharq Al-Awsat)
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Venture Capital Investments on the Rise in Saudi FinTech

Saudi officials inaugurating the Financial Technology Center (Asharq Al-Awsat)
Saudi officials inaugurating the Financial Technology Center (Asharq Al-Awsat)

The governor of Saudi Central Bank (Sama), Fahad al-Mubarak, announced that growth in financial technology companies (FinTech) contributed to the provision of crowdfunding and deferred payment activity, amounting to $533 million.

Mubarak noted that the participation of FinTech companies in payments increased the total number of operations in national payment systems to 5 percent by the end of January 2022, compared to 2.5 percent last year.

Speaking at the Financial Technology Center opening in Saudi Arabia, Mubarak indicated that the number of financial technology companies increased from ten in 2018 to 80 companies, with seven in the insurance sector.

According to the governor, the financial technology sector witnessed a remarkable increase in the volume of venture capital investments, with a cumulative value of about SR2.02 billion, through more than 45 investment deals.

Mubarak said in his opening speech that utilizing new technologies and accelerating the growth of financial technology undoubtedly contributed to building and developing new business models and practices.

“We firmly believe in the importance of integration between all parties and the need for concerted efforts to develop this sector under an ambitious national strategy within the Financial Sector Development Program,” said Mubarak.

Meanwhile, CMA Chairman Mohammad al-Kuwaiz explained that the real impact of financial technology on the financial services sector and the entire economy has become tangible.

Kuwaiz explained that Saudi Arabia seeks to become the hub of FinTech, hoping the Financial Technology Center will develop applicable business models for the financial sector and all its beneficiaries.

Fintech Saudi Arabia has officially opened the first of its kind center in the Kingdom, located in King Abdullah Financial District in Riyadh.

The project comes as part of the efforts of the Saudi Central Bank in cooperation with the Capital Markets Authority to stimulate growth in the financial technology sector in the Kingdom.

The Center includes two main sections, with co-working spaces, private offices, meeting rooms, event spaces, and an innovation area that meets all the needs of entrepreneurs and emerging financial technology companies.

The Center will provide entrepreneurs and people with innovative and pioneering ideas to communicate and collaborate to contribute to the development of the financial technology system in Saudi Arabia.

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Iran's Rial Hits a Record Low, Battered by Regional Tensions and Energy Crisis

An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
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Iran's Rial Hits a Record Low, Battered by Regional Tensions and Energy Crisis

An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)

The Iranian rial on Wednesday fell to its lowest level in history, losing more than 10% of value since Donald Trump won the US presidential election in November and signaling new challenges for Tehran as it remains locked in the wars raging in the Middle East.

The rial traded at 777,000 rials to the dollar, traders in Tehran said, down from 703,000 rials on the day Trump won.

Iran’s Central Bank has in the past flooded the market with more hard currencies in an attempt to improve the rate.

In an interview with state television Tuesday night, Central Bank Gov. Mohammad Reza Farzin said that the supply of foreign currency would increase and the exchange rate would be stabilized. He said that $220 million had been injected into the currency market, The AP reported.

The currency plunged as Iran ordered the closure of schools, universities, and government offices on Wednesday due to a worsening energy crisis exacerbated by harsh winter conditions. The crisis follows a summer of blackouts and is now compounded by severe cold, snow and air pollution.

Despite Iran’s vast natural gas and oil reserves, years of underinvestment and sanctions have left the energy sector ill-prepared for seasonal surges, leading to rolling blackouts and gas shortages.

In 2015, during Iran’s nuclear deal with world powers, the rial was at 32,000 to $1. On July 30, the day that Iran’s reformist President Masoud Pezeshkian was sworn in and began his term, the rate was 584,000 to $1.

Trump unilaterally withdrew America from the accord in 2018, sparking years of tensions between the countries that persist today.

Iran’s economy has struggled for years under crippling international sanctions over its rapidly advancing nuclear program, which now enriches uranium at near weapons-grade levels.

Pezeshkian, elected after a helicopter crash killed hard-line President Ebrahim Raisi in May, came to power on a promise to reach a deal to ease Western sanctions.

Tensions still remain high between the nations, 45 years after the 1979 US Embassy takeover and the 444-day hostage crisis that followed. Before the revolution, the rial traded at 70 for $1.