An interview with Dare Okoudjou, founder and CEO of MFS Africa
With a young population and a budding tech scene, Africa holds much promise for investors and business leaders alike. But for a continent made up of 54 countries, all with their own challenges and opportunities, what does it truly mean to do business in Africa? The European spoke with Dare Okoudjou, founder and CEO of pan-African fintech, MFS Africa to find out more.
Tell us about yourself and your journey to starting
Dare Okoudjou: MFS Africa was born out of the frustrations I experienced as a Beninese emigrant seeking to keep in touch with family and friends in Africa. Throughout my time studying at INSEAD business school in Paris and learning the corporate way in PwC’s telecommunications and media practice during the “dot-com boom”, there was one fundamental change – making calls back home. At first, it was truly a struggle to make calls to Africa, but gradually there were major improvements as the international telecoms network developed, and eventually it became a simple process. And this led me to ask myself – if making calls across borders can be so easy, why was it so difficult to send money in the same way?
Africa has continued to outpace the rest of the world when it comes to mobile money services, what is the driver behind the rise of the sector and what needs to happen for digital payments to be a viable alternative
Like a lot of strengths, Africa’s leadership in mobile money came out of a weakness. Conventional banking has never made huge headway on the continent, with only five bank branches per 100,000 people in sub-Saharan Africa. By contrast, mobile phones are everywhere, with penetration in Africa at 73% – providing unfettered access to the internet and money transfer services.
Africa can now lay claim to nearly half of the global total of registered mobile money accounts, with nearly 400 million in total. But mobile money is beginning to push up against the limits of African regulatory and technical infrastructure. Our young and optimistic population is keen to drive new ideas forwards and do business without borders, but regulatory systems can make it complex to transfer money across national borders.
Regulations have historically limited innovation in finance. How has MFS Africa navigated the African regulatory terrain and how does that influence the MFS Africa offering?
African regulators are in an unenviable position. Central banks work with bank-centric regulations based on Western banking systems while overseeing markets where technological innovations are pushing the cutting edge of payments. The legacy of regulations created for banks means that the regulators contend with the challenge of retrofitting document-heavy processes for the new mobile-first reality in a continent where sometimes there is no complete citizen registry or formal proof of address documents.
MFS Africa engages with regulators to demonstrate the technology, showcase our world-class compliance function, and explain how digital channels actually support regulators’ mandates, from financial inclusion to lowering risk of money laundering. Historically regulators have viewed fintech solutions as a threat to banks, but over the last several years, it’s become clear that the real competition is cash. When it comes to cross-border transactions, cash is expensive, risky, and opaque, whereas mobile money and digital payments are traceable, affordable, and convenient.
What advice would you give other international enterprises looking to do business in Africa?
I encounter a common mistake when talking to non-Africans about Africa – whether they mean it or not, they often slip into talking about it as if it were one big country, rather than 54 individual ones. For international businesses looking to establish a lasting and impactful presence here, it’s important to understand those nuances and to get a feel for the local context. In my own experience, nothing beats having people on the ground – it’s why we’ve established a 70-strong team of people with in-depth local knowledge of the countries where we have a presence. I’d urge any international businesses looking to tap into the dynamism of Africa to seek trusted local partners here and approach it with the mindset of doing business with Africa rather than in Africa.
What role do you see cross-border payments playing in Africa’s continued development?
From a business perspective, most African countries are sub-scale. To make an enduring impact and drive forward Africa’s development, African ventures need to be able to grow beyond their home markets. The difficulty of making transactions across borders has been a brake on our ambitions for far too long, and it’s this that drives us to pursue our vision of a mobile money hub that takes all the pain out of these payments. It’s why we’ve partnered with the likes of Visa and MoneyGram, opening up this hub to ever more networks so that more businesses and consumers can easily make international transactions, and it’s why we acquired Beyonic and brought these capabilities to more small businesses in Africa.