The future of African Banking and the impact of mobile money With N’Gunu Tiny, Chairman of the Emerald Group

Technology is changing the world of finance at a staggering pace and Africa is quietly leading the way in mainstream adoption. General infrastructure has been a historical deterrent to the dissemination of financial services in the continent, which made for a largely unbaked population. Today that represents a unique opportunity both businesswise and to social development. Under the leadership of N’Gunu Tiny, Dubai based Emerald Group has been shifting from its traditional portfolio of energy and commodities investments into financial services impacting African economies in a big way. With investments including Makeba digital wallet and more recently Banko Financial Group – an Africa focused inclusive bank, Emerald is quietly becoming a player within the continent financial services, impacting the lives of a previously unbanked population and of local economies. Tiny started up as a lawyer in the UK and dove into international business, oil & gas, mining, and banking law early in his career. His passion and domain over international economic law and business transactions saw him ascend as a Visiting Scholar at Harvard Law School. But Tiny’s drive was “change”, and he soon started to focus on projects making a difference in the continent. We met N’Gunu Tiny for a conversation on how technology is changing the game and how his group is invested in making sure that the digital revolution is inclusive to all Africans – one blockchain at a time.

Fabio Scala: Great to see you Tiny. I always enjoy our conversations and I’m very happy that we have a chance to share some of your insights with FurtherAfrica. Let’s start with Emerald Group. How about you tell us a bit of the story behind the group, its portfolio and the path that led you into financial services?

N’Gunu Tiny: Thank you Fabio, it is a real pleasure to meet you again and I am honoured to be able to share some insights into our journey and future goals. The Emerald Group was founded 10 years ago with the objective of becoming THE partner of choice for emerging markets investments. During the early stages, we essentially focused on investments in traditional sectors, such as Natural Resources. We count clients amongst the leaders in the Oil & Gas sector such as BP, Eni, and Total. But it quickly became apparent that moving our efforts and expertise towards the financial sector was, not only a requirement lead by the ever-changing global landscape, but also because financial services have always been a passion of mine. We started as a merchant bank, offering consultancy, financial advice and funding services to clients such as Goldman Sachs and The Carlyle Group. We then developed our retail banking arm that is tailored to meet the requirement of today’s African economic scenario, based on a low-cost digital platform. And we have many more projects in the pipeline. Financial Services is such an important and integral part of everyone’s life and the advancements in recent years have been hugely beneficial to the sector and to its customers. I can’t imagine a day when I am not impacted positively by Finance and Technology. As a businessman and a father, there came a time when I started looking at investment decisions from 2 angles. The first is business. Does this company, project, entity make business sense? Investing and being a business owner comes with it a huge responsibility, you have people’s lives in your hands and your decisions impact these people. Therefore, all businesses should be able to be profitable and get to a place quickly where they can stand in their own two feet. We see too many businesses being valued, not on ROCE (Return on Capital Employed) or multiples of income, as they should, but on funding raising rounds. We have seen with WeWork how that model is simply not sustainable and actually highly irresponsible. The cycle has gone a little irrational and will likely adjust. These types of business only ever benefit early investors and the founders and tend to end up with later investors being burned followed by huge job cuts and a change of the entire business model. So, for me, the business is able to get to a place where it can take care of itself, is an important factor. My second barometer for investing is the human impact. Does this organisation have a positive impact on society? Accompanying this and having an entrepreneurial spirit, Technology is a natural part of Emerald’s journey. Financial services and FinTech tend to fit into the areas mentioned and thus, for me, it was a natural progression. In relation to Africa, it is obviously my desire to contribute personally to the continent development and growth, and today is the best time. I believe that regulations are slowly becoming more focused around creating fair competition and encouraging innovation as we have seen in the EU with PSD2 (Payment Services Directive 2) and Open banking taking shape. Costs of innovation will marry this regulatory change and created a perfect environment for the sector to shine.

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Source: FurtherAfrica

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