What is Musoni, who is it for, and what problem are you solving for them?
Musoni is the leading digitalisation partner for microfinance institutions around the world. We provide a multi award winning cloud banking system that is now used by 75 microfinance organisations across 18 countries, predominantly in sub-Saharan Africa and SE Asia. Our solution has been consistently proven to help these organisations to improve efficiency, reduce costs, and grow rapidly. In particular, we specialise in helping organisations to digitalise. By removing the headache of managing technology, we free up time for microfinance organisations to focus on their clients and operations.
There are more than 1.5 billion people around the world who still do not have access to financial services. This means they don’t have a safe place to store their money, can’t access a loan to invest in their business, and can’t safeguard against risks through insurance. One of the reasons so many people are excluded from the financial sector is that financial institutions are stuck using out-dated and expensive technology, or using no technology at all. This is where Musoni comes in.
How and why did you come to found Musoni?
Before starting Musoni, the team founded a microfinance institution in Kenya and were directly involved in operations. As a result, we had first-hand knowledge of what it’s like to run a microfinance organisation and quickly saw how transformative the right technology could be. We spent a year researching existing solutions but were not able to find one that helped organisations to easily leverage the latest technology at a reasonable price point. That’s why we started Musoni.
We now support organisations around the world and have teams based in the Netherlands, Kenya and Myanmar. The lessons we learnt setting up and running a microfinance institution have been combined with these global experiences. All of this has fed straight back into the solutions we provide.
What do you see to be the main advantages and disadvantages of founding and growing a ‘frontier’ business?
Working in frontier markets means that it’s possible to achieve significant impact quickly. The pace of change is exhilarating. With the right foundations in place (such as a modern cloud banking system), organisations can grow very rapidly in just 12-18 months. One organisation we support in Myanmar grew from zero to 180k clients in just three years.
Frontier markets also come with less standardisation. Every financial organisation we work with is different. To be successful, we choose to approach each project as a partnership, adapting our business and providing extensive support during the implementation and first year of going-live. Over time, this also brings rewards but it’s hard work initially. This is why we see ourselves as a digitalisation partner to financial institutions, rather than a software vendor.
Another aspect of growing a frontier business is the number of markets that we’re exposed to. This shapes a unique work environment with numerous possibilities for professional development. Equally, individual markets are often not large enough to single handily drive our growth. They can also come with unique, single country risks. For example, in Zimbabwe, many of the financial institutions we support have had a very difficult three years with major political and economic challenges. At Musoni, working across 18 different countries helps to diversify these risks, while also providing a large enough market for growth.
What is the key to successfully managing a team across several geographies?
We have offices in the Netherlands, Kenya and Myanmar and so straddle multiple continents and time zones. We’re very lucky to have great people in all of our offices and so have not found growing and managing the different teams to be overly challenging. Before COVID-19, we spent a lot of time travelling between the different regions, and I have lived in both Kenya and Myanmar (recently spending 18 months living in Yangon, setting up our SE Asia office). However, in the last ten months, nobody has been able to travel, and while personally frustrating, the impact on the company has not been too significant. With modern project management and internal communication tools, everyone is connected at all times, and there is a lot of visibility regarding work that’s going on which makes it easier to all pull in the same direction.
If you could give young entrepreneurs in frontier markets one piece of business advice, what would it be?
The key to being successful in frontier markets is to involve local knowledge from the start; knowledge of the market and your clients but also of the staff that you will recruit. Everywhere we work, we see highly capable and motivated people that are eager to join the journey of growing a business. Building a successful team and culture requires a true interest in what makes people move, and the exciting challenge of bringing different cultures together in a shared business goal. At Musoni, we have dedicated regional teams with knowledge of each local environment. Our management team have all lived in the countries where we work, and until COVID-19 we spent a large amount of time in the field with our end customers.
The final piece of advice is not specific to only frontier markets; having a strong co-founder is invaluable. Someone to bounce ideas off, share the big decisions with, and navigate the rollercoaster that is growing a company. Musoni was co-founded by Sander (our CTO), and myself. We’d been working closely together for a few years beforehand and there was a natural synergy between Sander’s experience working in banking technology, and mine in microfinance. No doubt there are many successful companies with lone founders, but I’ve always found that starting off as a team makes the journey more enjoyable.
What is the most important source of value-add (aside from capital) you seek from an equity investor?
We look for investors who are always thinking of ways to help the company to grow, and willing to directly support us in doing so. We’re fortunate to have some excellent institutional investors and each help us with their networks and expertise. For example, Goodwell arrange an annual CEO summit for the management teams of all of their portfolio companies. It’s a great opportunity to share ideas, discuss challenges, and learn about new markets. Alterfin work closely with many MFIs around the world and have supported us with warm introductions to potential clients, advice on the market in general, and connections with their regional teams, making it easier to launch into new markets. Most importantly, we look for engaged investors who are willing to actively share their knowledge and experience to grow the company to new heights.