JUMO’s CEO for the Africa region and Pakistan, Buhle Goslar, reflects on four lessons learned during the company’s five years of growth. She first shared these thoughts in a keynote during Copenhagen Fintech Week 2020.
‘When thinking about scaling a business, your inspiration can greatly influence your success. Back when JUMO started in 2015, mobile money was beginning to move beyond its origin story with M-Pesa, especially in Tanzania and Uganda, but for the most part, the old problem remained: two billion people were financially excluded across the globe, with the majority in Africa. Among the growing segment of MSMEs, you still had a credit gap — under 8% of adults were covered by credit bureaus, meaning they had no formal financial identities and were as a result ineligible for formal credit products. So, we knew that the problem we were leaning into was one with massive scale. JUMO’s inspiration was to be found in a single question. The question we asked ourselves was: How can these people, many of them entrepreneurs, be brought into the formal economy?
We began to experiment, looking at the problem creatively and trying out a lot of different approaches. We knew that in order to reach the market, we had to build for the lowest common denominator. In our markets, this meant that our products had to work on a very basic feature phone, as internet costs were and still are prohibitively high in Africa. Working with what existed in the market gave us insight and momentum. We knew that there was great potential in the problem and spent a lot of time asking ourselves what the anatomy of growth could look like. What, in our model, we asked, are the necessary conditions for success? Where those conditions don’t exist, how could we create them?
During this journey, we learned a few hard lessons.
Lesson 1: Meet customers where they are
This requires creativity, collaboration and humility. In our case, we do a lot of immersive research and consider the customer’s full life context while designing our products. Don’t assume your customers want your product. For them, the best store of value might be a goat or cow. You first need to understand why that is. If your product does not seem right to them, it shouldn’t seem right to you.
Meeting customers where they are can also mean a change in your business model. We could have gone direct to the customer, but customers were already on mobile networks — so we formed partnerships.
Lesson 2: Don’t mistake the map for the territory
JUMO is currently live in seven markets and has four new markets coming online in the next year. We learned early on that each market has its idiosyncrasies and paid our school fees to learn them and improve our products and ways of working accordingly. If you keep at it and build momentum, your work at the coalface will pay off.
Lesson 3: Understand your market and push boundaries
In Ghana, our biggest market, mobile money transactions went from 210M GHS in 2018 to 780M GHS the following year. Growth is happening at an astonishing rate. In some markets, we’ve seen 30% month-on-month growth in merchants starting to accept mobile payments. When you’re in the business of shaping the future (as most tech companies are), you’re either moving fast and pushing the boundaries or becoming irrelevant. For JUMO being a part of the solution for merchant payment growth is a key part of our future.
Lesson 4: Remember that the whole must be greater than the sum of its parts
Figure out what’s essential. Each component of the business model needs to be contributing the most that it can at all times. One major problem we realised early on was that our cost of capital — lending off our own balance sheet — was too expensive given the type of customer that we wanted to reach. So we had to innovate and ask ourselves: How can we source more affordable capital by bringing banks onboard, together with institutional capital, and making the economics work better for the end customer? That set us on a journey to understand banks better and figure out how to onboard them. In other words, by modifying our platform to be multisided, we created the necessary conditions for ourselves to succeed. You need to always be optimising, trying to do more with less, trying to balance the tensions between scale, reach, and profitability. This is especially important in markets like ours where there isn’t a lot of public financial infrastructure and where access to the right capital can be a challenge.
JUMO works in historically unmapped markets to deliver something important in the lives of our customers, giving them financial access, choice, and privacy. Our customers spend their lives working to provide for themselves and their families. It is an honour for us to have the opportunity to make that process easier. Yes, it’s about tech and data and financial resilience and building sustainable economies. But when it comes down to it, it’s really mostly about people’s lives. Thinking about them at an individual level as we design our products is what will move the African continent forward.’