Viola Llewellyn is the co-founder and president of Ovamba Solutions Inc, a pioneering African first “FinTech” company that provides technologies, online platforms and mobile apps that serve African SMEs. She tells Ogojiii why innovation must be impactful and the benefits of an African-Nordic region business partnership.
Story: Belinda Otas
Ogojiii: Innovation is a driving force on the African continent, from business to education, what are your expectations and hopes when it comes to how they are designed to create long lasting impact?
Viola Llewellyn: Innovation for innovations sake misses the point. It’s for the very reasons you have mentioned above – “impact” – that drives Ovamba. In our case, innovation takes up where banks are not able to provide innovation to meet the needs of SMEs. We expect to see the “unserved” served and included in the mainstream of opportunities. We hope that by innovating to meet the challenges of growth, we can boost SMEs who are the drivers of GDP on the continent.
Ogojiii: Ovamba does not fund its customers the typical way one would expect because of the way it is structured and designed to serve those that you work with. One feature in your service is what you term innovative Sharia compliant finance products, eCommerce, and logistics services. Could you elaborate on what this is?
Viola Llewellyn: Ovamba is a funder of transactions. We make capital available for customers who need to buy stock or inventory and need support services to store and move that inventory within supply chains. Put simply, Ovamba funds companies so that they can buy and sell more of their goods to their customers. The FinTech element relates to the technological innovations we have created to address the financial service needs of our customers. Africa’s main activity is trade. People, countries, groups, companies all trade with each other. The importation of goods from domestic and international sources plays a large role in the choice of activities favoured by micro, small and medium enterprises. We designed our business model to help customers increase sales of goods as a way to boost their revenue and profits. More trade leads to more growth. The innovation around the Sharia concepts allows Ovamba to be nimble and to serve Islamic traders who are often left out of mainstream finance because mainstream finance does not always meet the ethical requirements of Islamic business – which is trade oriented. Sharia focuses on ethical elements that Ovamba believes fits the natural trading dynamic of Africa. Ovamba’s commitment to SMEs goes beyond helping them to source and buy inventory. We support their success by bringing them closer to their customer base geographically with warehousing and logistical support and we assist the informal sector with innovation that supports financial, digital and functional literacy. It has been a very effective method of helping customers. Customers are able to get pre-approved on our website for funding within 60 seconds. They can get payments to suppliers within five working days if all conditions are met. Customers have been able to go from only importing one container of goods due to cash restrictions and storage limits to having the financial and logistical support to import three or four containers to sell to their willing and waiting customer base. It helps customers to plan and manage cash flow, and it has helped our customers to take advantage of price point discounts based on purchase size.
Ogojiii: Does this approach not contradict the sustainable development design and model that people are more familiar with on the continent?
Viola Llewellyn: Not in the least. Ovamba’s ethical approach to funding and choice of sectors focuses on discouraging those extractive industries that are a barrier to transformation and manufacturing on the continent. Ovamba does not fund primary extractive industries, oil and gas, mining, timber etc. Ovamba also does not fund alcohol, tobacco, firearms etc. Sustainable goals that are important to Ovamba centre on independence of business to drive employment and GDP growth. The use of technology allows women and other sub-groups to have an equal opportunity to be assessed for risk and served with the capital they deserve based on their suitability and the health of their businesses. It’s sustainable to encourage independence rather than foster unhelpful forms of aid and charity. The International Financing Corporation has a prime directive to boost the SME sector in emerging markets and address literacy. That’s exactly what Ovamba does.
Ogojiii: When your company’s business structure was being designed, was it with the “African sustainability” (resource efficiency) element in mind?
Viola Llewellyn: Absolutely. It was with the idea that we would approach our algorithm and risk measurement by taking into account a sensitivity to Africans at a deep cultural level. Ovamba takes into account ethnic and tribal groups and the characteristics that may apply to these different groups in different cities and countries. We don’t believe that Africa is one amorphous group – there should be respect to the nuances of each separate ethnic group.
Ogojiii: How is Ovamba’s approach to the challenges faced by SME’s on the continent, especially in the countries where Ovamba currently has operations different to what was on the ground before you came into the market?
Viola Llewellyn: As you know, Africa is divided by zones, Ovamba’s presence in Douala, Cameroon has an impact on the CEMAC zone. Before Ovamba came along, there was no solution in the CEMAC region that gave a pre-approval of funding as quickly as Ovamba. There was no online platform or mobile app purely dedicated to helping SMEs to fund their businesses. Banks provide bank accounts and some varying types of online banking that are NOT designed for small businesses. MFIs which are prone to instability and closure would have treasury restrictions from the Central Bank stating what their lending limits for the month would be. Ovamba’s solution addresses velocity of capital and decisions, which helps SMEs especially in the case of international importations and customs clearance. The Mobile App and Ovamba’s website are award-winning innovations (Best Lending and Financing Company in Africa 2016 By Fintech-Africa). They were designed to fill the gap in services left by the very nature of Africa’s approach to banking regulation which is designed to support big business, not growing SMEs. Ovamba’s eCommerce and logistics innovations is an activity that banks cannot and probably will never be able to replicate or get involved in. It’s not in their mandate to buy, sell and store goods for their customers. Ovamba understands that SMEs need to be able to address limitations relating to accommodating more stock than their businesses have been used to. Not all SMEs can afford to build or rent additional warehouse space, Ovamba provides them with flexible warehousing space and logistical support so that they can build momentum in their business at controllable costs.
Ogojiii: In what ways do you see the African Nordic business platform and connection creating opportunities for both regions in the future and for change in business partnerships?
Viola Llewellyn: New partnerships create the potential for new possibilities. Some global markets have not had a chance to interact with the private sector in Africa. The first barrier to engagement is usually lack of knowledge or familiarity. In the case of Africa, there’s the extra task of dispelling myths and stereotypes. As innovation increases on the continent and the middle-class appetite for goods and services mounts, there’s an opportunity to reach out to new partners who can embrace the private sector and the investment opportunities therein. The Africa Nordic Business Platform’s niche is key to helping Nordic businesses identify the right opportunities and the right partnerships. Africa is HUGE! You need help to know where to begin. They have taken an intelligent approach to providing transparency and support to Nordic businesses, and they understand the culture of risk perception that sometimes governs Nordic business practices. The two cultures and business ecosystems need help finding where to begin.
Ogojiii: What excites you about Africa Innovates and the idea of bringing the Nordic region to the business table with Africa?
Viola Llewellyn: Ovamba had a great experience with bringing Japanese investors to Africa. They had not had this sort of private sector engagement before. They found themselves exposed to real entrepreneurs with real businesses. Ovamba’s use of innovation to connect investors to SMEs and manage the entire investment and funding process seamlessly and with transparency was a great assurance to them. We expect to repeat the process with the Nordic region.
Ogojiii: What are some of the best business and innovation practices, which you think Africa and the Nordic region, can exchange for a more fruitful and balanced partnership for the future?
Viola Llewellyn: It’s always best to start with what is familiar. Nokia and ICT come to mind. Africa is a big consumer of communications products and services. Communications drives trade as well. Africa as a growing region is asset rich but liquidity constrained. The Nordic region has liquidity but asset opportunities are not returning in the double digits as much as Africa is right now. This is a match worth exploring with a company like Ovamba.
Ogojiii: Africa is much bigger than the Nordic region, given your experience of both worlds, what has the Nordic region got to offer the African continent and what can it learn from the continent at the same time?
Viola Llewellyn: Interestingly and despite Africa’s large population (approximately 1.1billion people), the issue is that the start-up ecosystems has yet to push growth stage companies through to the investable stage at a volume that compares to outside Africa. This is an opportunity because the addressable market for private sector investment is still on its way. This will give the Nordic region a period of adjustment that may match the growth of the continents private sector. There’s a great opportunity and room for partnerships.
Ogojiii: What does the business environment in Africa give you, which you don’t get in Europe and other parts of the world?
Viola Llewellyn: High Return on Investment (ROI.) Legacy business – what we innovate is in virgin territory. We get to impact in large swathes. We are operating in a leapfrog environment where we can get to world-class excellence in half the time that Europe and other parts of the world did (see mobile phone, payments, water tech, renewable energy exploration etc.) Everything that Ovamba does has social impact blended with profitability. Everyone we serve or partner with benefits. We are in an environment where we are shaping the business ecosystem and impacting GDP in so many ways.
Ogojiii: What do you find exciting about the innovation space across the sub-Saharan African continent?
Viola Llewellyn: Seeing the rise of tech hubs and incubators means that some of us are securing the future for hundreds of years to come. These are the seeds that will become the tech culture of tomorrow. Innovation will be the conduit for business growth and a mature services & manufacturing ecosystem on our continent. It’s exciting.
The interview was done as part of Ogojiii’s media partnership with Springboard’s African Nordic Business Conference in Helsinki, Finland.