Interview with Ismail Ahmed: Founder of WorldRemit International (R:Ed)

Ismail Ahmed is the Founder and Executive Chairman of WorldRemit, an international remittance service paving the way for digital money. Originally from Somaliland, Ismail has secured over $220 million dollars of funding and has acquired many accolades, including being named EY Entrepreneur of the Year. Right4Education (R:Ed) met Ismail Ahmed at the LSE’s annual Africa Summit, a 2-day event focused on Africa’s Future Frontiers.

R:Ed: Please give us a quick introduction to your life and work:

Ahmed: My name is Ismail Ahmed, I am the founder and Executive Chairman of WorldRemit International money transfer business.

R:Ed: How did you end up setting up WorldRemit? What is the story behind it?

Ahmed: I have been involved in the business for many years, before that I was a researcher at the University of Sussex where I did some research work on remittances, and I have been, since I came here, sending money back home regularly. And so, I had a first hand experience of the costs and inconvenience faced by hard working migrants who often have multiple jobs, who often travel multiple hours to send someone some money. So the idea of WorldRemit was to digitize remittances, to come up with an easy system which makes sending money easier and faster. So, we have an app people download and can send money using a few types, and we’ve recently received the opportunity to work with the successful mobile money services like M-PESA. So that enables recipients to get their money on a mobile money account, so it’s increasingly mobile to mobile. And the beauty of that is, people can share money easily. So, because of digitization people are now sharing money frequently and we’re present in 47 countries in Africa.

R:Ed: This two day conference is about breaking down frontiers and looking more globally across Africa, and the world. How do you think things like mobile money are going to improve business across countries in Africa, and from Africa to the rest of the world?

Ahmed: The beauty of digitization is people who were previously literally putting the cash under the mattress can now store money on a mobile phone. And what that does is it makes making payments a lot easier and simpler so somebody who runs a small business doesn’t need to travel to a wholesaler to buy goods, they can negotiate on the phone, and then pay for the goods, which can be delivered to the shop, whereas with cash, you have to be physically present to pay for goods and services. What mobile money is doing that it will be easier for African businesses to trade across borders.

What used to complicate countries working within Africa was the reliance on banking, which was using the issue of the swift system your money that’s going to be going through New York. Now with mobile money and services like ours, it has increasingly becoming easier for businesses to wire across borders so definitely I think that that would really help the integration of African economies.

R:Ed: What do you think this will do to the prospects of African economies in the next 10 years?

Ahmed: Africa’s increasingly moving to a cashless economy. A good example is Somaliland, which is now closer to a cashless economy than anywhere  else in the world, which has a lot of benefits. So in the next 10 years we think a large part, I would say 50% of African GDP will be cashless, and that is the scale of the impact for economies like Nigeria in particular, or Ghana and Kenya. So I think that that trend will continue and then it will therefore be easier for businesses to attract investment, particularly micro-enterprises. And there’s a projected hundred billion dollars of annual funding which the World Bank says in 5 to 10 years Africa will attract. So, that would only be possible with digitization. So a small business now in Ghana can use social media now (Facebook, Whatsapp…) to raise money from guys for abroad and something like our app makes that so easy. So if somebody likes an idea from the village that they can now easily transfer $10 $20 within a few taps. That was almost impossible in the past, when everything was cash. I definitely think that the future is cashless in Africa.

R:Ed: You say that cashless economies work to halter corruption. Could you expand on that?

Ahmed: I mean that’s what we’re already seeing where the cash was largely anonymous, and even in remittances, those who were involved in terrorism financing, money laundering, corruption, it was easy to bribe an agent collecting cash or a tiller for a bank. But now, when money becomes digital, there is a paper trail. Whereas when somebody goes to a cornershop, we don’t know where they got their money from. There’s no trail. They can fake a photo ID to satisfy the agent. That’s not the case with digitization. What the telcos can do is that they can see how many transactions the person has received since the day they open up an account, how they use that money, where they go… So, due to this incredible wealth of data, especially with artificial intelligence, it is easy to analyze that data and come up with patterns and then retrace and prosecute somebody who’s been involved in corruption.

And I think we’ve already seen the benefits of that, because when we started, more than 90% of our transactions were cash. We used to see a lot more fraud. Now, with mobile money we’re actually seeing that even attempted fraud has significantly dropped. Because in some markets like Somaliland, if the telco blocks your mobile number, which is really like your digital identity, there is a stigma attached to it. Can somebody live in Hargeisa without mobile money? It is not worth the risk. The power of the crowd has built a level of trust, nobody dares to get involved in those things.

An example is what happened in Afghanistan where because of mobile money services, police officers who were corrupt were caught because of the history of the transactions. That’s where the huge benefit of digitization is. The Nigerian Central Bank is making cash expensive, so forcing people to use mobile money or banks. The idea is to fight corruption or fraud. And then that is already benefiting a Nigerian economy. So I think that that is the trick, that’s really probably one of the biggest payoffs.

R:Ed: My final question is about entrepreneurship. What would be your advice for someone who doesn’t necessarily have a business degree, but has a great idea?

Ahmed: You don’t need a degree today to set up a business or there has never been a better time to set up your business, particularly in the technology areas, or the technology enabled businesses. Buying a server used to cost a fortune in the past, but now software like Cloud Computing allows somebody to just pay tiny amounts of money to put whatever information you want to in the cloud. Smartphones enable someone to create an app, which can go viral through social media. So the cost of setting up a business, or a startup is so low now in many sectors. Therefore, I think you need an idea, you need to learn what you want to do, but you don’t need a lot of money to build a successful business. If anything, I should have started my business sooner.

Copyright: Right4Education