Nala - Design Thinking in Action

One of the most significant benefits of the podcast that I am running with Dharmesh Mistry has been the incredible people we have chatting with on our show.

Both Dharm and I were born in East Africa and have a genuine interest in Sub-Saharan fintech. We have talked to several founders and CEOs of Fintechs from Ghana, Burundi, Kenya and Tanzania.

The rapid adoption of mobile technology has ushered in the start of a revolution in personal and small business finance. But what is striking about this revolution in Africa is the focus on solving customer and societal problems.

I was recently introduced to Benjamin Fernandes, a fintech founder from East Africa. Benjamin lives in Dar es Salaam in Tanzania. In many ways, Benjamin represents this fintech revolution that is happening in Africa.

He is young, highly educated and on a mission. After studying in the US, Benjamin worked at the Bill and Melinda Gates Foundation. However, he could see the pace of change in Africa and decided that his future was with the opportunity in Tanzania. The opportunity is vast.

Fundamentally, Africa has been able to leap-frog over fixed-line networks and adopt mobile. This was a key driver for China's transformation. But Africa has a crucial advantage over China; its population is young. The median age in Africa is 18 years old, according to Bill and Melinda.

On returning to Tanzania, Benjamin decided to crystallise his thinking into a proposition; he needed to talk to people. So he chatted to people using semi-structured interviews. Benjamin talked and talked and talked. In the end, he interviewed over 600 people. From this, he identified real problems that needed to be solved. He then built a domestic payments product in Tanzania and Uganda that scaled to 250,000 customers in less than a year and a half. 

Over time, and sifting through the data, Benjamin could see that there were large numbers of people receiving money from abroad. The UN estimates about 1 in 7 people globally are financially supported by a migrant worker. 

But it is very costly and takes a long time (days or even weeks):

• $48 billion was sent from overseas to family and friends in Sub-Saharan Africa in 2019. Of this, almost $3.3 billion was lost in fees. Africa is still the most expensive region in the world to send money to.
• Apparently, despite the massive growth in technology across the world, it would be faster to go to a bank in Dar es Salaam, take out cash, get on a plane to Kampala in Uganda and hand-deliver the money than it would be to send money electronically through some of the existing systems.

People who had moved abroad were sending money back to East Africa - lots of money. For example, the UK to Kenya is an important money corridor worth $billions. This money is often hard-earned. In his interviews, Benjamin talked to a Kenyan lady who had bought up three children independently. She was a housekeeper for a British family, who had moved back to the UK, and she had gone to the UK with them. She said that her life was dedicated to her children, giving them the best opportunity, and 60% of all she earned was being sent back home to Kenya. 10% of that money was going on fees.

However, her story isn’t uncommon; despite the growth in technology players such as Transferwise/World Remit etc., about 80% of remittances sent to Africa are still made at physical stores. 

The scene was set - based on this insight, Benjamin founded Nala. Nala's mission is to help people get money across borders quickly and in the most cost-effective way possible. Using a mobile app, users can send money instantly to mobile wallets in Kenya, Uganda and Tanzania.

Nala was founded on insight, and the way life is being bought to life is through a design thinking process. The team are collaborating with customers and potential users every step of the way.

They have some gnarly problems to solve, the main being trust. Few people have heard of Nala. If you are separated from your family and send money back to them, you want to know that the money will arrive safely.

For Benjamin, a foundational principle to building that trust is making the Nala app function and work as simply and efficiently as possible. To do that, they are iterating with a user group.

I was flattered to be asked to be part of that user group.

I was invited to a Zoom session, where Benjamin, Nala’s CTO, Nico and Nala’s COO, Ngosha, joined the call and watched as I downloaded the app and made my first payment. I narrated my experience and verbally identified any areas of concern. The service uses open banking to facilitate payments.

The setup was incredibly straightforward and smooth, and within minutes, a mobile phone in East Africa had received a few shillings from my ï¿¡1 transfer. Some minor issues confused me. We chatted these through, and the next day when I went back to the app, it had been updated in line with some of my suggestions; apparently, I had been talking sense!

I love this - this is design thinking in action.

Their insight which is snowballing, will help them as they consider marketing and positioning. Building trust and making Nala the automatic choice for people sending money abroad is the challenge they face, and it is not an insubstantial one. But they are very much pointing in the right direction.

In 2020, the WorldBank predicted a sharp decline of international remittances to Africa; however, the opposite happened. Kenya, for example, recorded the highest ever inbound remittances in 2020, hitting $3bn in inbound remittances.

I can remember as a child in Kenya; we would go on a hand-pulled ferry. The workers would shout Harambee as they pulled the ferry across the river. Harambee means “all pull together” (it is the Kenyan national slogan). I am borrowing it for the user experience community - it is great to see this design thinking spirit, the new Harambee, between a business and its customers.

Asante Sana to Benjamin and the Nala team for letting me play a small part in their incredible story!

NALA is currently in private early access beta mode. If you are interested in being part of this story, I know that Benjamin and the team would be delighted to have you. Check out iwantnala.com or sign up for the early beta access.