Viaka #9: Building culturally-relevant Fintech services
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Hi everyone, this is Hani. This week, we’re shining the spotlight on Agel, an Egyptian Fintech startup. I spoke with Ahmed El Sherbiny, a Co-founder of Agel.
Agel Quick Stats
Founded: 2021
HQ: Cairo, Egypt
Key Individuals: Ahmed El Sherbiny, Co-founder; Abdelrahman Saeed, Founder/CEO
Raison d’être: Agel is a Fintech startup that seeks to empower MSMEs through financial services that expand access to efficient technology for MSME clients. Agel’s products are Sharia-compliant and focuses on cultural relevance in Egypt and the region.
Ask: Agel is looking for connections to “investors who are interested in Islamic finance, ethical investments, and greater risk diversification, as well as senior advisors with fintech and/or risk and credit modeling experience for underbanked sectors in in emerging markets.”
I got the chance to chat with Ahmed about Agel’s story, and their goals for the future. Here are some of the insights from our chat.
What is Agel and how/why did it come to life?
Agel is a culturally relevant trade-financing platform empowering MSMEs growth via technology, through availing on-demand merchandise credit limit for merchants within Agel's industry focused B2B networks. Our Mission is to facilitate MSMEs access to tailored financing products in less than 48hrs through a product that is built on three pillars:
A product that minimized the manual touchpoints; hence, improving unit economics and accelerating grants.
A credit scoring system that is based on multiple alternative data points.
A Sharia-compliant product that matches the culture of the Muslim community, and industry focused financial products that are market relevant.
What is your personal story and relation to the problem (alongside your founders)
We as Co-founders got to connect a couple of years back when we were first invited to Egypt's first Fintech retreat and since then we became friends and we were always discussing market opportunities, until one day Abdelrahman was assisting in the family business which focused on the manufacturing and wholesale of textiles were he witnessed first for himself how local manufacturers are facing liquidity constraints due to their inability to access any kind of working-capital or trade financing, at that time I was serving as an Assistant District Attorney at the Egyptian Prosecution in a major commercial district where I saw for myself how liquidity issues that resulted from devaluation of the currency followed by the spread of Covid-19 hugely affected local MSMEs.
What market are you attacking? Are you adding on or trying to replace current offerings?
Our research and validation phase concluded that Egyptian MSMEs are completely underserved when it comes to financial services in general and specifically in funding, this can be traced to two main reasons;
A culturally relevant product:
Muslim communities as Egyptians have a firm belief that non-asset-backed borrowing contradicts with the core stipulations of their religion, as there are several verses that condemn (“Riba”)’, which literally means “increase, addition and surplus”. These originate from a pre-Islamic practice whereby the amount due was doubled if the debtor proved unable to repay the debt at maturity. Therefore, we have developed our asset-backed lending product to match the need of the culture we operate in.
Market relevant product:
We at Agel have reshaped the traditional financial services business model, operational model, and customer experience to unlock a unique finance avenue for (“MSMEs”), with a core proposition of availing industry-agnostic merchandise credit limit for Merchants within customized industry focused networks. Our products are only focused on the size of the business, we take it a step further to design financial products based on the industry norm to meet the merchants' needs in their normal trade cycles.
We have started with the textiles industry, and currently piloting in the pharmaceuticals industry.
What are you looking for from the Viaka community?
We are looking to connect with investors who are interested in Islamic finance, ethical investments, and greater risk diversification, as well as senior advisors with fintech and/or risk and credit modeling experience for underbanked sectors in in emerging markets.
Where will that take you?
The Egyptian economy is built on MSME, as according to the Egyptian Ministry of Planning (95+%) of Egypt's GDP is generated from hard-working MSMEs employing less than (10) workers in the economy, which makes this sector the main contributor to the Egyptian labor force. Further, the World Bank economic report tackling Egypt has reported that the size of MSMEs trade revolves around nearly (1 Billion USD) of trade movement annually; therefore, we at Agel believe that there is great opportunity to expand the product offering for MSMEs beyond the standard working capital and investment loans.
We at Agel aim to provide ‘one stop shop’ for MSMEs through understanding the particular needs and preferences of MSMEs, and developing tailored approaches to overcome the historical challenges that always stood as a barrier to serve this segment. While focusing on having a social impact that revolves around
Empowering MSMEs growth: bridging the gap between MSMEs and Traditional Financial Institutions, which encourages and develops this sector that entails combating market volatility and lays the foundation for a sustainable economy.
Accelerating Financial Inclusion: pushing technology to MSMEs every day operation one step a time to adapt them to uses and benefits of technology, eventually digitalizing their full operations.
Contribution to job creation: MSMEs in Egypt and the MENA have always been a significant employer and contributor to GDP.
Eradicating Informal Economy: through assisting MSMEs in accessing resources whether financial or operational as well as raising their financial awareness we enable them into slowly adopting a more entrepreneurial approach, which will lead to them transforming from the informal economy to registered businesses, eventually accelerating economic growth and thriving the GDP.
Raising Financial Awareness: instead of feeding clients predesigned products, we focus on educating our clients to surge financial literacy and empower MSMEs to adopt the right financial plans and choose the product that fits their needs.
Promising Opportunities from Our MENA Partners
Below are a list of opportunities curated from the Viaka’s MENA partners.
For Founders
Plus.vc invests in early-stage founders (up to Series A) that have a MENA background or connection, but are founding their companies outside of MENA.
For Investors
Desert Farms is raising $3m to start large-scale production, and currently connecting with early-stage investors in FoodTech
For Advisors
Roadie Music, an AI-powered music tuner and education app, is looking for someone with experience building a SaaS business, preferably a previous founder with digital marketing and go-to-market expertise and a strategist. This opportunity can be compensated.
If you would like to get involved with any of the opportunities above, please fill out the form below and indicate what opportunity you are interested in in the “Reason for Joining” section.
Exciting Announcements From Our Network
Below are a list of updates, wins, and asks emanating from members of the Viaka Network in the “West.”
A message from talented network member Faisal Qureshi: “Hey! I’m a rising senior at Berkeley studying Data Science and Economics and, unfortunately, I was let go from my data science summer internship this week due to funding issues. I am skilled in analytics, ML, and engineering and I’m looking for any opportunities in the data space. If you or anyone you know is looking for interns, please email me at: faisalq@berkeley.edu”
Ur My Type, a top-performing relationship app on a mission to make dating and finding friends online more meaningful using personality types, is looking for angels and early stage VCs to raise $150K. The app has seen nearly half a million downloads since January 2021 and has a higher App Store rating, as well as Average Engagement Time than Tinder & Bumble. If you’re interested, please contact firas@ur-mytype.com.
ABANA is partnering with the empowerME Initiative of the Atlantic Council to host a virtual webinar conversation about recent events concerning cryptocurrency. Five world experts will discuss the recent crash in cryptocurrencies and its impact on the Middle East. For more information, visit this link.
If you’re a member of our Network and would like to share your own update next week, email info.viaka@gmail.com.
That’s it for this week. Thank you!
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