Aside from the political situation – the military assumed power in 2011 – the country is plagued by frequent power cuts, high levels of unemployment, including a third of those aged between 15 and 24 years and 34% of graduates, and contrasting levels of digital inclusion. Moreover, about 95 percent of Egyptians live along the Nile, on less than 5% of Egypt's territory.
These challenges will only grow as the population rapidly expands. Given this situation, it's no wonder that the country's president, Abdel Fattah el-Sisi, has identified overpopulation, along with terrorism, as the two biggest threats facing the country.
With just under half of Egyptians online, 49 million or 49% of the population, there remains considerable scope for growth. This opportunity will be of interest to both international and domestic operators.
"As soon as people start to use digital financial services and see the benefits, things will change a lot," argues Gamal Khalifa, head of microfinance at Egypt's Financial Regulatory Authority. "They'll find these services to be secure and easy to use. They'll be able to receive and make payments, receive loans, and save money on transport costs."
Moreover, those who do have accounts seldom harness their full potential. Ayman Ismail, the Abdul Latif Jameel Endowed chair of Entrepreneurship at The American University in Cairo's School of Business, told ZDNet last year, "Most debit cards are used for payroll, with very little use in purchasing or online".
"Similarly, access to credit is limited, both for consumers and SMEs," he said. "Banks traditionally have been conservative in extending credit. Most of their deposits go to investing in government treasury bills, with safe returns."
Egypt's fintech sector currently consists of about 40 companies – including startups, financial institutions, and micro-finance providers, as well as incubators, hubs and investors. It's an area we can expect to see grow considerably, in terms of products and investors, in the near future.
Aside from this societal need, Egypt's adoption of mobile – which in many instances has seen consumers bypass the wired internet altogether – provides a foundation for optimism.
This take-up isn't altogether surprising when you consider that the average mobile internet connection in the country is 16.95Mbps, compared with 6.74Mbps for fixed connections.
Between 2014 and 2017, the percentage of the population using mobile money leapt from 1.1% to 22.8%, and there are 20 million active mobile-payment accounts in the country. The Egyptian Central Bank aims to double that figure in the next two years.
"Peer-to-peer transfer, bill payments, microfinance, payroll, pensions, and social-security payments, merchant purchases, online purchases," as well as "local and international remittances", are all mobile-driven activities that Ayman Ismail highlights as giving Egyptian fintech momentum.
Egyptians spend an average of nearly eight hours – seven hours and 53 minutes – a day online, some way ahead of the world average of six hours and 42 minutes. However, with less than half of the population online, Egypt's full digital potential will go unrealized until that situation changes.
In terms of emerging technologies, PwC estimates AI could be worth $42.7bn to the Egyptian economy by 2030, equivalent to 7.7% of GDP.
Google and Bain & Company in a 2019 study project that e-commerce will grow by 33% annually to become a $3bn market by 2022. "At 2.5%, Egypt's e-commerce penetration of total retail sales is [already] comparable to that of India and Indonesia."
However, according to the World Bank, only 3.5% have made online purchases or paid bills online, compared with just under a third, 32%, who have made an online purchase via mobile.
Could Egypt be a sleeping tech giant, with the potential to have a large domestic, regional and global impact? One thing's for sure: Egypt is changing fast. Its market size, coupled with a young tech-savvy population, mean that it's far too big to ignore.