To explore how fintech companies can support small business growth, CNBC-TV18 spoke to Faisal Toukan, Co-Founder & CEO of Ziina; Islam Shawky, Co-Founder & CEO of Paymob; and Ahmad Coucha, CEO of Flapkap.
Edited Excerpt from the Discussion:
Q: What is the most significant way that fintech has impacted businesses in emerging markets?
Toukan: When it comes to fintech in emerging markets, what’s happened recently is that it has democratised finance. What I mean by that is, with the advent of automation, AI, and self-service, you can provide a personalised experience for every SME or small and medium business as if they were an enterprise customer. Four years ago or so, that was not the case.
Shawky: Fintech has provided access to the tools to help SMEs adopt digital transactions, which are essential for them to grow.
We’re at an inflection point between a phase of enablement where SMBs and consumers didn’t have the tools to pay digitally. Now we’re moving into this activation phase, where they have started to have these tools. Now, it’s time to get them to transact — this is where all the tools, vertical SaaS solutions and use cases become extremely important.
Coucha: For us, the most exciting impact of fintech is widening SMEs’ access to finance. SMEs represent the majority of the businesses created, the number of people employed, and a big part of the GDP of our region, however very small part of the finance goes to them, and fintech has been able to leverage all the growing alternative data sources to be able to widen the access to financing. And this is one of the most impactful areas for SMEs from fintech.
Q: Ziina is revolutionising payments in the UAE. How do you approach tailoring fintech solutions to these regions to cater to the specific needs of businesses?
Toukan: A really interesting number about the UAE is, two years ago, there were 3,00,000 SMEs in the UAE. Today, there are around 6,10,000. And by 2030, there are set to be around 1.1 million. So, a massive, growing segment of these small businesses needs very, very personalised needs to grow their business.
What you have to do when you’re working with SMEs, especially at that scale, is build solutions that are very, very self-service. What I mean by that is everything from how you educate the customer about the product from the moment they see it on a billboard to the moment they see it on the app store to the moment they sign up. They get these automated emails, it needs to be very, very customised towards their journey and their needs. Again, it goes back to what we discussed before, but this is all done through automation. So, the way to personalise things is to do something called a product-led strategy and lead with the product journey first, then advertising, marketing, and sales second. So that’s how you do it.
Q: Paymob has empowered many small businesses with digital payment solutions. What are the most common challenges businesses face when they adopt fintech, and how does Paymob empower them?
Shawky: We want to help SMBs grow, and we do this by helping them get access to as many funding sources as we can. So, in Egypt, we accommodate more than 40 modes of payment. From wallets and instalment plans to card schemes. The more the payment methods, the higher the probability of the product getting sold, and the higher the revenue or profit for the business.
Q: Flapkap focuses on providing financial solutions for SMEs. What is that one underappreciated fintech tool that small businesses must use to scale effectively?
Coucha: The superpower of SMEs now is that most of the transactional data is from third-party providers. So now, if I have a little shop, a little retail shop, I’m running a POS machine on which 80% of all the transactions are being captured. Perhaps I’m running a restaurant on an aggregator, like a delivery platform, and I have a big part of the volume of my sales going through it. This is ultimately the biggest gem that the SME is creating for lenders because, once you have this data, when we get access to it, we’ll be able to understand your business, and underwrite it.
My biggest advice is, try to digitise. Go with the flow and don’t try to resist it or you will become obsolete; have access to fewer financing solutions and other value-added services, and you will fall behind. It’s not even like you’re building an advantage, but you would be falling behind.
Watch the accompanying video for the entire discussion.
