Khazna: Revolutionizing Financial Inclusion in Egypt
Egypt has long grappled with a significant portion of its population lacking access to traditional banking services, leading to a heavy reliance on cash transactions and informal lending. In 2019, Khazna, a fintech startup, emerged on the scene with a mission to address this issue by offering tailored financial services to low- and middle-income workers. Their offerings include salary advances, digital payments, and microloans, providing much-needed financial solutions to employees and contractors.
Recently, Khazna secured a substantial $16 million in pre-Series B funding, bringing their total funding to over $63 million. This investment will fuel their expansion plans, including the pursuit of a digital banking license in Egypt and entry into the Saudi Arabian market.
From our previous coverage in 2022, where Khazna had just raised a $38 million Series A and amassed over 150,000 customers, the company has experienced significant growth. Today, their user base has surpassed 500,000 individuals, half of their target by the end of 2022. Co-founder and CEO Omar Saleh revealed that Khazna focuses on serving workers earning three times less than Egypt’s minimum wage, offering them affordable financial tools.
A key aspect of Khazna’s strategy is integrating financial services directly into payroll accounts, with approximately 100,000 users receiving their payroll through the platform. This integration allows for seamless access to services like loans and insurance. Additionally, Khazna extends lending services to gig workers and pensioners, with this product contributing to the fintech company achieving profitability.
Towards Becoming a Digital Bank
While Khazna provides a range of services such as bill payments, buy now pay later, medical insurance, and rent-to-own products, its focus on payroll and lending signifies a strategic move towards becoming a comprehensive digital bank for underserved communities in Egypt. However, a crucial element missing from their current model is access to customer deposits, which would significantly reduce borrowing costs and enable more affordable loans.
To address this challenge, Khazna is actively working towards obtaining a deposit-taking license in Egypt. This license would allow the company to accept customer deposits, ultimately enhancing its funding capabilities and positioning it as a differentiated player in the market.
Saleh emphasized the importance of securing a banking license from Egypt’s Central Bank by mid-2026, following the regulatory framework established in July 2024 for digital banks. Simultaneously, Khazna is eyeing expansion into Saudi Arabia, where there is a growing demand for consumer finance solutions.
Expansion Plans and Future Prospects
The decision to prioritize Saudi Arabia stems from its strong connection with Egypt, particularly the significant Egyptian expat population in the country. Khazna sees an opportunity to offer cross-border financial services, leveraging the Egypt-Saudi remittance corridor and combining credit offerings with foreign exchange solutions. Additionally, the robust capital markets in Saudi Arabia, particularly the Tadawul stock exchange, present an attractive landscape for Khazna’s future growth.
Khazna aims to have 40-50% of its business coming from Saudi Arabia within the next four years, positioning itself for a potential public listing on Tadawul. This strategic move not only supports their expansion plans but also offers early-stage investors a clear pathway to a high-value exit.
Despite macroeconomic challenges faced in Egypt in recent years, Khazna’s funding round reflects renewed investor confidence in the region. The company welcomed participation from global and regional investors, indicating a positive outlook for their future endeavors.
