Dare Okoudjou is on a quest to make mobile money a service that’s taken for granted.
“If I pick up my phone now in Johannesburg and you give me your cell I will call and not question if it will work,” he says. “You will take it for granted that you can dial my number, and it will work. Why isn’t the same for money?”
As a former telecom engineer, Okoudjou recalls a time when making a phone call from Johannesburg to the U.S. wasn’t taken for granted either.
“I want someone in China to be able to send money to Nicaragua without question,” he says.
Today, Okoudjou is founder and CEO of South Africa-based MFS Africa, a leading Pan-African Fintech company that operates the largest digital payments hub in Africa. The company does B2B, B2P, and P2B payments from one mobile network to another, and companies that connect to MFS Africa’s API can access over 170 million mobile money accounts in Africa. Okoudjou sees the company’s role as putting together a “network of trust” that creates the pathways “so people on one side, in Zambia or London or New York, can transact with people on the other side,” he says.
Born and raised in Benin, West Africa, Okoudjou began his career in the telecom industry. He worked in Morocco, France, and finally the U.S., where he worked for Price Waterhouse Coopers in telecom consulting and was part of a team that launched the prepaid option for a Moroccan mobile network. When he realised that consulting wasn’t for him, he decided to attend INSEAD to get his MBA. One day, he came across a small article in the Financial Times about Africa’s largest telecom company, MTN, and the launch of MTN Banking.
“A light went on for me,” he says. “As a telecom engineer, I understood how we could use the technology to move the money around, and as someone who grew up in Africa and knew the difficulty of moving money around, I could understand what a huge impact it would make.”
Okoudjou called MTN and started a discussion that ended with him becoming an employee. He moved to South Africa in 2006. It was an exciting time to be in Johannesburg – the “African renaissance” was on everyone’s lips and the city vibrated with the build-up to the World Cup. Until then, other than his time in Morocco, most of his work experience had been outside of Africa, and now he was helping to build MTN Mobile Money. As he progressed in his work, he began to see how this could completely transform not only domestic money transfer, but the distribution of financial services across emerging markets.
Okoudjou credits his telecom background for allowing him to see the potential for mobile money.
“I didn’t have any of the usual baggage coming from the banking industry. Crossing telecom and banking, I could see how it would play out and I would have those conversations at MTN,” he says. “I said to myself, `Someone is going to get this right. It may not be me, but it’s clear it’s going to happen.’ I could see a `before’ and `after.’”
In 2010, he left MTN and went out on his own to launch MFS Africa.
“Some people have an idea of a product and then start a business around it. I needed to see a change in the world and needed to find a way to get there with a business,” he says.
For the first six months, Okoudjou determined how to put together the key elements of mobile money systems and the essentials of money transfer, including the ability to determine KYC information, input the sender’s address, credit and debit accounts, and confirm the sender’s identity. Next, MFS Africa started partnering with mobile networks. By 2014, MFS Africa was connected to ten million mobile users.
“It had become clear that international remittances were inefficient in general but particularly inefficient in Africa,” Okoudjou says. “While everyone is completely outraged by the fact that it costs seven percent to move money globally, back then it was 20 percent in Africa.”
MFS Africa continued to connect mobile money platforms to each other. By the end of 2018, the network had grown to 170 million mobile users in thirty markets in Sub-Saharan Africa. Soon Okoudjou began to see his vision come to life: It became possible for someone in Benin to send money to someone in Cote d’Ivoire and take that for granted.
But despite those victories, Okoudjou still experienced difficult moments as an entrepreneur.
“Business school teaches you that cash is king. You find out that’s not true – cash is king, queen, prince, and princess,” he says. In 2017, Okoudjou began fundraising for a “B” round, seeking institutional investors to bring an element of credibility and governance. While Okoudjou expected to raise the funds by March 2017, they had given themselves until June 2017. June passed, and then July and August, and by the time September came, they still hadn’t raised the money. Everyone took salary cuts. With limited resources, the company prioritized keeping the top 20 clients happy, then the top 15, then top ten, all in an effort to keep the best clients happy and the company afloat.
“Eventually the kindness of strangers worked,” he says. An investment fund that had a relationship with one of MFS Africa’s angel investors had planned to invest alongside other funds as this was their first foray into Africa, but after watching the company for a full year, they were ready to invest without another fund leading.
“They said to us, `If you can do this without money, what would it look like with money?’ Okoudjou says. “We got $4 million to start and then raised $14 million by August 2018.”
Okoudjou says once you experience difficult financial moments, you become resilient. What he says affects him more is losing someone important from his team of 70 employees.
“I find those moments harder than when you are running out of money.”
When asked about the recent news that MTN and Orange, the largest mobile operators in Anglophone and Francophone Africa, are teaming up to launch Mowali, a continent-wide mobile money interoperability joint venture which allows users send money between mobile money accounts across different providers, Okoudjou takes a moment to reflect.
“Of course, we would prefer they wouldn’t tie up, because we would lose some market share as it’s ancillary to what we are trying to do,” he says. “But if this makes it quicker and we don’t have to do it one by one and we can access it - because we are already accessing Orange in several countries - it makes it quicker. Just like any competitor in the market, it forces us to be better, move faster, and to continue with efficient execution and delivery. The industry is taking time to achieve the vision and that’s good for all of us.”
That focused vision extends to MFS Africa’s plans for approaching blockchain.
“We have a cautious approach because in Africa the regulators do not see it well. In the background we are experimenting and exploring and seeing where it can help,” he says. “For me it’s like the internet in 1994 – we could see the possibilities, but it took ten years to see the businesses. Sometimes I feel we are there with blockchain. We are excited about things that can simplify settlement and what blockchain can do in health and agriculture.”
Okoudjou says he is looking forward to the Global Money Transfer Summit (GMTS) 2019 conference being held March 26 and 27 in Cape Town and the opportunity to meet and network with peers.
“Money transfer is a business of trust, because at any time, someone is out of pocket. So, there has to be trust among the practitioners, and IAMTN brings people together in a safe environment to meet the people you are dealing with. It’s always good to shake hands with people who have your money and vice versa,” he says.
As the industry experiences changes brought by derisking, price pressure, regulation in mobile money and blockchain, Okoudjou says he is looking forward to exchanging ideas and different perspectives and learning how people are planning to respond.
“This is the first time GMTS is coming to Africa and we are excited to be a sponsor,” he says. “It’s important in money transfer to be most real and visible in Africa, and we can shed light on the African case when it comes to money transfer. Seventeen percent average cost to send money is a problem. It will be interesting to have all stakeholders grapple with that, and to unpack what we are doing about it as a global industry.”