Author: FRANK KANEWed, 2017-11-15 03:00ID: 1510689694235897500
DUBAI: The Dubai International Financial Center (DIFC) has launched a $100 million fund for investment in financial technology, the fastest-growing sector of the global financial services industry.
The fund will be invested from the UAE hub’s own internal resources, but may also get backing from other Dubai government entities, though private-sector bank finance has been ruled out.
Essa Kazim, the governor of the DIFC, announced the fund at the DIFC’s Global Financial Forum.
Other financial centers in the region have also identified fintech as a growth area.
Kazim said: “The fund is to help establish, grow and upscale startup and growth-stage fintech firms looking to access markets in the Middle East, Africa and South Asia. The fund will leverage the DIFC’s fintech ecosystem consisting of attractive experimental licenses, market-leading pricing and collaborative spaces.
“There is immense opportunity in this market, and this will be one more step toward shaping the future of finance in the region,” he added.
Earlier this year, the DIFC announced its dedicated fintech premises, dubbed the Hive, which aims to accelerate growth in the sector, in collaboration with local and international banks. The first 11 fintech firms at the Hive were announced recently.
Kazim said that the fund “is set up, it’s there, it’s supported from our own internal resources. We are ready to spend money, but it depends on the opportunities,” he added, insisting that investments would be decided by certain criteria.
The fund would be available for small- and medium-sized startup ventures, he said.
“It’s $100 million in total, so you would be thinking of smaller companies. It’s not $1 billion in Uber, it’s not that. It’s really to support the startups, the smaller sized companies. Some companies probably need around $50,000, and some maybe need $1 million or $2 million,” Kazim added.
Fintech has emerged as a growth area since the DIFC announced a 10-year strategy to triple in size by 2024.
“In certain areas, probably, we have passed our targets but other areas we are probably lacking a bit. One area is employment. Although the number of licenses are on track, attracting companies, and our offices are fully leased out in terms of DIFC-owned buildings, we could still do more in employment. But it’s not significant. We will catch up as we go further,” Kazim said.
“If you look at our own statistics, prior to the drop in the oil price we were averaging 150 companies licensing a year. After that, the average jumped to 300 companies a year.”
Main category: Business & Economy