Khazna: A Fintech Solution for Egypt’s Unbanked Population

A Digital Solution for Financial Inclusion

A large portion of Egypt’s population lacks access to traditional banking, forcing many to rely on cash transactions and informal lending. Khazna, a fintech startup founded in 2019, is tackling this issue by offering financial services tailored towards low- and middle-income workers. The company provides solutions like salary advances, digital payments, and microloans to help employees and contractors access much-needed financial services.

Scaling Up and Expanding

Khazna recently secured $16 million in pre-Series B funding, bringing its total funding to over $63 million. The investment will support its expansion plans as it prepares to apply for a digital banking license in Egypt and expand into Saudi Arabia.

Growth and Milestones

When we covered the fintech in 2022, it had just raised a $38 million Series A with over 150,000 customers across its products. Today, Khazna has grown its user base to over 500,000 people.

On the Path to Becoming a Digital Bank

Khazna provides other services like bill payments, buy now, pay later, medical insurance, and a rent-to-own product. But by embedding itself into both payroll and lending, it is strategically moving towards becoming a full-fledged digital bank for Egypt’s underserved communities.

Challenges and Opportunities

However, one thing is missing: unlike traditional banks, Khazna doesn’t have access to customer deposits, making it expensive to fund loans. So far, Khazna has relied on wholesale debt financing in dollars (USD) and Egyptian pound (EGP) to fund its lending operations.

To reduce borrowing costs and offer more affordable loans, Khazna is now working to obtain a deposit-taking license in Egypt. This license would allow the startup to accept customer deposits, enabling it to lower its cost of funds.

Expansion Plans

Khazna is targeting mid-2026 to secure the banking license from Egypt’s Central Bank, which laid out its regulatory framework for digital banks in July 2024. As the six-year-old fintech gets started with that process, it’s simultaneously setting sights on Saudi Arabia, where there is a growing demand for consumer finance solutions.

Not-So-Imminent IPO

Another reason Khazna is prioritizing Saudi is its strong connection with Egypt, notes CEO Omar Saleh. With nearly three million Egyptians living in Saudi, the Egypt-Saudi remittance corridor is one of the world’s largest, presenting an opportunity to offer cross-border financial services, combining credit-led offerings with foreign exchange (FX) solutions.

Conclusion

Khazna’s mission is to provide financial services to underserved communities in Egypt and beyond. With its recent funding round, the company is well-positioned to expand its offerings and reach a wider audience. As it navigates the complex regulatory landscape and prepares for its next phase of growth, Khazna is poised to make a significant impact in the fintech industry.

FAQs

Q: What is Khazna’s target market?
A: Khazna’s target market is low- and middle-income workers in Egypt and Saudi Arabia.

Q: What services does Khazna offer?
A: Khazna offers salary advances, digital payments, and microloans to help employees and contractors access much-needed financial services.

Q: How much funding has Khazna received?
A: Khazna has received over $63 million in funding, including its recent $16 million pre-Series B round.

Q: What is Khazna’s goal for its digital banking license?
A: Khazna aims to secure its digital banking license in Egypt by mid-2026, which would enable it to accept customer deposits and reduce its cost of funds.