Somaliland:Meet The Somali-Born UK Entrepreneur Transforming the Money Industry
Dr. Ismail Ahmed is the Somaliland born, London educated entrepreneur, who has taken the money transfer industry by storm. Founding his company WorldRemit only six years ago, the tech-start up was already estimated to be worth £320million in 2015 and continues to expand at a rapid pace.
However, the success of WorldRemit did not happen overnight. Rather its winning business formula is undoubtedly due to Ahmed’s extensive experience and knowledge of the money transfer industry, gained from personal, academic and professional perspectives that is unparalleled within the industry and provides him with a serious edge.
Growing up in Hargeisa, Ahmed says his interest in remittances began early as he learnt the fundamental importance that remittance money held for beneficiaries. With a brother in the Gulf sending money home, Ahmed notes that his family were “quite reliant on remittances,” and he witnessed “first-hand how remittance money transformed Hargeisa” enabling it to become “one of the fastest growing cities in East Africa.”
It was as a student in London pursuing his post-graduate studies that Ahmed experienced the money transfer industry as a sender for the first time. He recounts the process of sending money back home as being both costly and time consuming “for what was often only a small amount of money.”
With an interest in remittances sparked from personal experiences, Ahmed sought to progress his understanding of the industry and dynamic of remittances further through a PHD. During his time in London, civil war had broken out in Somalia and he recalls that “Hargesia was totally destroyed,”. Through his PHD he sought to understand “how people survived during the war” and what role remittances played in their lives. He realised that remittances had become a source of livelihood to those in Somaliland,” and that their usage changed from primarily being “about building houses to… being about survival.”
Ahmed argues that remittances are “certainly more beneficial than international aid” primarily because “these transfers are direct to the beneficiaries, which you certainly cannot say [that] for aid.” In this realisation he was certainly ahead of the curve, picking up on the social significance of remittances long before many international organisations.
Dr. Ahmed’s research and academic knowledge led him to be recruited by the United NationsDevelopment Programme to help companies adapt to the new stringent regulations on money transfer companies introduced following 9/11. Whilst his time at the UN ended sourly, with Ahmed turning whistleblower against internal corruption, he notes that it did also provide him with some critical insights, leading him to realise that the “old model (of money transfer companies) was not made for the 21st century”. The tight regulations introduced meant the system of cash transfers was not only inefficient, but also the inability to trace cash meant that it was susceptible to criminal manipulation, and not adequate for the new laws regulating transfer businesses.
It is these experiences, as a beneficiary of remittances in Hargeisa, a sender in London, a PHD researcher, and UN worker, that enabled Ahmed to understand the business of money transfer companies and what the industry needed.
By identifying what he saw as the two main problems facing money transfer companies: “the high cost of sending money” for migrants and “the challenge of compliance,” and overcoming these obstacles Ahmed created a money transfer business fit for the 21st century, one which caters to a need and has huge potential for growth.
The key to his success? Going digital. By bringing all services online and digital he was able to cut costs and facilitate a high level of compliance. Going digital also enabled WorldRemit to tap into a vitally important and rapidly expanding technology: mobile money. Ahmed notes “there has been a huge growth in mobile phone ownership and also mobile money,” in the past three years particularly in Africa. Anyone with a basic feature phone is able to access a mobile money account; this is bringing financial inclusivity to a huge number of unbanked people. He argues that the huge success of mobile money, particularly in countries such as Zimbabwe, Uganda, Tanzania, Ivory Coast and Nigeria, “is driving these economies cashless.”
He recollects visiting Hargeisa recently and being able to pay for almost everything from a car wash to vegetables with mobile money, he states it is the “closest to a cashless city anywhere in the world.” Ahmed notes that “three years ago we were doing hardly any transactions to mobile money accounts, now it is a third of WorldRemits money transactions.”
Of course, Ahmed points out that setting up WorldRemit, as with any tech start-up, wasn’t without its obstacles. As a money transfer company Ahmed notes that WorldRemit was forced to juggle coming to terms with a huge number of international and local regulations and the normal tech problems that tech start-ups face. For these reasons he argues that “the only way to succeed in such an environment is to hire world class talent,” it is hiring mistakes that he cites as some of his main faux pas early on in the business.
Ahmeds foresight in going digital has enabled WorldRemit to corner a rapidly expanding part of the market and will facilitate indefinite growth. Looking to the future his ambitions certainly remain high, he hopes to see WorldRemit become “a leading truly global digital money transfer business,” similar to the type of expansion his idol Mo Ibrahim’s business, Celtel, enjoyed. For those looking to get into business or aspiring to Ahmed’s success he argues “there are more opportunities to build a business today than at any other time,” just “explore the options of going into business,” but “it must be something you are passionate about.” Certainly Ahmed’s passion for remittances has spurred WorldRemit’s success, and combined with his foresight in going digital has made the company’s expansion seemingly unstoppable.