The changes happening in the Middle East and Africa (MEA) with respect to fintech and wider digital transformation have been noted. The Fintech Times sits down with Hassanein Hiridjee, CEO of the Axian Group to talk about the African digital transformation and the major impact of fintechs on emerging economies.
Hassanein and his brother Amin are the third generation of entrepreneurs in the Hiridjee family. After graduating from the École Supérieure de Commerce de Paris (ESCP Europe) in 1997, Hassanein returned to Madagascar—his homeland—and gradually began taking the reins of the family’s half-century-old business. In 2015, this same business became the Axian Group, and refocused on becoming an African champion in the telecoms, energy, financial services, innovation & fintech and real estate markets not just in Madagascar, but across all of Africa.
The group now operates in key sectors of industry and actively contributes to sustainable growth and innovation in several countries across the continent. Hassanein believes that overcoming the many challenges of development requires ethical, inclusive and sustainable economic growth that creates positive impact for the greatest number. This is even more important in Axian´s environment because today, 60% of Africa’s population still has no access to electricity and 90% have no access to basic finance and banking services.
For our global audience, can you explain what the digital and fintech landscape across the globe currently looks like
Fintech represents the latest, unprecedented intersection between the once-separate worlds of finance and technology, where the latter is helping make access to finance more ubiquitous. From simple money-transfer apps to interfaces that deliver all the services that a bank would, digital platforms are adapting to consumers´ appetites for simplicity and convenience. However, this movement was always anchored to the banking system—leaving out massive swathes of people who do not have access to banks, especially in rural areas. A logical adaptive step was to create a financial infrastructure that is not tethered to banks but gives people the same access to finance. Thus, mobile money was born. Backed by institutions´ faith in its potential and responsiveness to regulatory needs for implementation, it has flourished in Africa. Cryptocurrencies are also an extension of this, but speculating on them has proved divisive among regulators and investors because their valuation dynamics are poorly understood.
How does this alter in your country?
According to the IMF, as recently as 2020, 30% of adults had access to formal financial services and 5% had access to credit. Furthermore, the informal economy comprises about 40% of GDP. Such a market is sub-optimal for banks´ administrative burden—but a fertile one for mobile money operators (MMOs).
We launched MVola in 2010; Orange Money soon followed. MVola leads the market largely, but mobile-money as a whole must remain customer-centric: we must work with other MMOs to bolster convenience and utility to clients. Since MMOs have somewhat mastered the basics of mobile banking, interconnection now informs innovation in mobile financial services.
MVola, the country´s first MMO, first helped the populace via money transfers for payments and remittances. The next challenge: expanding access to credit in a country where people are generally reluctant to get into debt.
How have you developed your subject matter expertise and helped to share it across in your base country?
I’ve had the opportunity to surround myself with experts and successful business leaders who shared their experiences and avant-garde ideas. What we do, have already been thought-through within my teams and the partners before being brought to market; particular attention is given to the customer-centricity of our services. Our model, proven to be effective and sustainable in Madagascar, has successfully been replicated in other countries where the Group has a foothold, along with our disruptive thinking.
Innovation is paramount to bringing state-of-the-art financial solutions that respond to the needs of the local communities while also attending to their economic development. I always say that Africa is the land of opportunities and with its young people, knowledge and experience sharing are key to the digital economic transformation of Africa.
What are the future trends and predictions you see happening in your country? And the region as a whole?
The focus must be on adapting financial solutions to the future needs of markets we operate in. This will be made possible through interconnection with other actors in the market. Regulators must standardise processes and be General Data Protections Regulation (GDPR) Compliant to enable rapid progress in African Fintech.
I believe that secure transactions and ensuring proper KYC procedures through biometric data will accelerate credit applications, account opening and transactions. At the same time, it’s also about balancing products and services that match clients’ demands with offering adapted solutions to merchants.
The mobile money market has grown immensely in the sub-Saharan region. Now, it is about building interfaces that go beyond money transfers or payment facilities; It’s about digitalising banking services for accessibility and that’s what we intend to do. We want to bring along local actors to modernise consumer habits.
Any advice or recommendations you would give to other future fintech companies and entrepreneurs based in the MEA region?
First: time is of the essence! Better a live service now slowly perfected gradually than a perfect plan on paper. Listen to your users, identify their needs and be proactive in identifying needs they will have in the future and you will have long-term customers. This has been key to our success—fintech is extremely dynamic so if you do not, someone will and you will lose your customers.
Also, think big! Try new things, scale what works and scrap what does not. Be easy to disagree with, because sometimes people who disagree with you may have considered something you did not! Invest in young people as well: they have consumer habits!
Last but certainly not least: never, ever put your customers at risk! Invest in keeping their money secure, because trust is hard to build and easily lost—losing a client´s trust IS losing a client.