Digital transformation has been a priority across the world and has also hit the top of the list across Africa, especially now with COVID-19. In Africa, 77% of all jobs in Africa are created by small, medium and micro enterprises (SMME)’s and account for almost 50% of the GDP, according to the World Bank. 81 million SMME’s based in Sub-Saharan Africa have a credit need of $132 billion, according to the International Finance Corporation (IFC). There clearly is an opportunity to help bridge and create new innovations in the continent – not just importing global fintech solutions but also have unique African home-grown ones. Dr. Thabo Lehlokoe, the Executive Chairman of South African headquartered Tafari Capital gives The Fintech Times a bit of insight.
Dr Lehlokoe, Bsc (Nul), MbChb (Wits), EDP (WBS) is a seasoned leader and businessman with 28 years’ experience. He started as a medical doctor, both in South Africa and England and later transitioned into business in 1998 through being one of the Co-founders of Primary Healthcare startup called Carewell. He then went on to start another startup in the Information Security space in partnership with a Belgian company called Ubizen in 2000. He then joined Siemens Business Service in 2003 as the Account Director of South Africa’s first Public Private Partnership in IT Outsourcing worth R1.2b over 10 years. He rapidly moved through the ranks to become Market Development Director in 2005.
Since 2006, he has taken the entrepreneurial route, investing and chairing IT and Telecoms companies like Swicon 360 (SAP HR Platform implementer), Seemahale Telecoms in partnership with Motorola and later Arris. He bought and still owns Fibretronic Sales which is a Telecoms infrastructure and services provider. He was a 15% shareholder and non executive board member of Coriant in South Africa. He is a former Vice President of the Information Technology Association and its representative and Business Unity South Africa. He was a member of SADIBA and South African Communication Forum where he represented his company. With a group of other founders, He co-founded Tafari Capital and has been its chairman over the last four years, taking it from concept to launch. He is a well-rounded entrepreneur with experience working with local and multinational companies at board and executive levels and is similarly at home in a startup environment.
For our global audience, can you explain what the digital and fintech landscape across the African continent currently looks like? How does it alter in South Africa?
This is a particularly exciting time with regard to the digital and fintech landscape in Africa. Africa has leapfrogged the teething stages of online banking, going straight to mobile and digital banking. This is due to the fact that the vast majority of “digital natives” in Africa access the internet via their mobile phones, making it a primarily mobile-first continent as compared to the rest of the world which is omnichannel. This mobile-first economy has had the greatest impact on GDP growth of 6% per annum compared to APAC at 1.4% and South America at 4% .This mobile environment has led to serious entrepreneurial innovations in the digital and fintech space in the world for financial inclusion with solutions like M-pesa in East Africa. Secondly, the growing activity in setting up a $1 trillion common market across the continent which presents a huge opportunity. The opportunity that presents itself is that Africa has a young population with a median age of 19.7 years most of whom are “digital natives”, who are more and more being urbanized, seeking housing opportunities and having an impact in the rise of new cities and expansion of existing ones.
How have you developed your subject matter expertise and helped to share it across South Africa?
What is more interesting now is that we are being approached by established banks and IT companies to partner with us because of our novel approach to Financial Inclusion. Our development team is using some of the most up to date tools to build our solutions in an agile manner allowing us to produce new solutions much quicker than our competitors. This acknowledgement by the incumbents is a testament to the forward-thinking that our team has had in identifying the gap in the market and developing homegrown solutions to addressing them. This innovation is leading to flexibility and agility in addressing local problems which make it difficult to be addressed through the large cumbersome and expensive banking software which is neither easy nor cheap to customize. The opportunity it presented us is to be able to develop world-class technology at a much lower cost than in the west, making partnering with us or even buying our solutions a very attractive proposition.
What are future trends and predictions you see happening in the region? And specifically with your company?
With the proposed economic integrations of the continent, I foresee immense unlocking of cross border trade value and cooperation by African tech start-ups leading to more innovation and spearheading trade beyond borders. Our company was started with the continent in mind with possibilities of spreading across the emerging markets. More of our solutions will be adopted by the world as we focus on homegrown solutions and spreading to the world.
Any advice or recommendations you would give to other future fintech entrepreneurs based in the Middle East & Africa (MEA) region? Particularly with respect to fintech and the wider digital sector?
My advice is that Africa and the Middle East are alive with possibilities. We must focus on unearthing the opportunities created by the disadvantaged environment that we have been living with for a long time. There is huge opportunity for fintech, insuretech, agritech, edutech which for far too long we have been left behind. It is time we use that to our advantage. We have been importing solutions from overseas for too long and it time that we use our technical prowess to solve our own problems and use these talents to export our solutions to the world. Individually, our countries are small but together, they form a huge market of 1.3 billion people so when we design solutions, we should do so with this broader market in mind.