Decode Fintech

International Expansion 101 for Fintechs in Africa

Episode Summary

What should you know before expanding your Africa-based fintech to more countries? We cover everything from how to choose which countries to expand into, to how to hire in different markets, and what to watch out for when incorporating the business.

Episode Notes

What should you know before expanding your Africa-based fintech to more countries?

In this episode, we explore the art and science of launching financial service products beyond your home country, covering everything from how to choose which countries to expand into, to how to hire in different markets, and what to watch out for when incorporating the business.

Our guides through this topic are experienced operators with long experience in expansion: Wiza Jakalasi (Chipper Cash), Marcello Schermer (Yoco), Adia Sowho (ex-Migo), and Maria Rotilu (ex-Branch).


0:00 — Introduction

2:25 — Why businesses expand into new countries

3:35 — Expanding for growth

4:00 — The importance of timing

4:52 — How to pick your next country

7:03 — Prioritizing business drivers

9:49 — The impact of regulation

14:58 — [Paystack Product Alert] Introducing Paystack's verification service

15:57 — Midway recap

16:34 — Navigating incorporation

20:02 — The role of relationships

21:55 — How to think about hiring

23:53 — The best part of expansion



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Episode Transcription

Wiza: [00:00:00] You know the tool for, for writing proposals is a word processor. The tool for expansion is an aeroplane. This is my expansion pro-tip - expansion does not happen in the office. No one should come and tell me that they're doing expansion and they're like sitting in their office at their house. Googling. Not, that's not how it works. 

Mohini: [00:00:25] That's Wiza Jalakasi. He leads the business development team at Hover, a company that helps developers build global products on top of mobile based financial services like USSD and more. But before Hover, he was a very successful international expansion lead at Africa's Talking AT.

Wiza: [00:00:44] My team and I, a team of three, eventually four people, I think we did like 10, 11 plus incorporations and set ups all over the continent in the space of a year. 

Mohini: [00:00:53] Developers across Africa, use ATS API platform to build apps that integrate SMS, USSD voice and other mobile technologies. Wiza is one of our experts as we explore the topic of what fintechs should keep an eye out for as they expand internationally.

Hi, I'm Mohini Ufeli. And this is the Decode Fintech podcast brought to you by Paystack. The Decode Fintech podcast is where the people building Africa's financial infrastructure share what they're seeing on the front lines. In each episode, an operator shares insights on how they're handling everything from product development to marketing in some of the world's fastest changing business environments.

Today's episode is all about international expansion. And one thing I've learned is that you don't know what you don't know. I'm not an expert, but today's guests are, and they are the superpower of this episode. Our conversations were kind of like having a sit down with your wise older cousin who just came back for Christmas with all the tales, after traveling the world. 

We talked about which countries are easy to get set up in, and which ones will give you a headache, how to avoid losing hundreds of thousands of dollars as you kick off your incorporation process and the importance of relationships as you expand. To kick off, we started at the very beginning.

Why should businesses expand and what should they be thinking as they do? The reasons vary. Widening their customer base, growing their revenue, increasing their market share. For some, it's simply in their best interest to launch to a spread of new locations. 

Marcello: [00:02:44] If you're selling these mobile services to companies that want the biggest footprint, you need to have the biggest footprint. And if your customer needs you to be in Gabon, you need to be in Gabon and then opening up in Gabon makes your core product better. 

Mohini: [00:02:57] That's Marcello Schermer. He's currently the head of expansion at Yoco, a company that builds Fintech products to help businesses accept digital payments in South Africa. And he's dedicated quite a bit of his career to working with tech entrepreneurs across the continent.

So he's witnessed his fair share of expansion moves. Another reason he shares is how businesses expand to grow the addressable market, which is the case for lending and credit fintechs like Branch and Migo, who we focus on later in the show. Marcello explains that the strategies for these two kinds of businesses need to be a little different.

Marcello: [00:03:34] If you need to expand to make your product better, you probably want to expand as quickly as you can, and you probably want to be able to quickly grow wherever your customer needs you, but then probably also be smart about having your customers fund your expansion. You would say, “Great. I have a customer that needs me to be in these 15 markets, and then I'll use the revenue from that to open these 15 markets.”

Mohini: [00:03:58] As with everything in life, timing is key. Marcello says there are three major timings to keep in mind - timing in terms of the life stage of the company, timing in terms of the life stage of the market and timing in terms of the life stage of the product. Within those timings, you come across questions like, “how well have you achieved product market fit?” “Is your team ready to handle the stress of a whole new country?“ “Are you all able to adapt to the local culture?” And one more.

Marcello: [00:04:27] What would happen if your CEO had to spend a month outside of your home market, trying to figure out a new market. Would the company still be able to run without a problem or not? And if the answer is no, then you're probably too early to expand.

Mohini: [00:04:52] Now when a company has determined that they're ready, all the boxes are checked and internally they're looking good to go, Adia Sowho what tells us how to go about picking the next country? 

Adia: [00:05:02] I think, look for similarities, you can't just decide to go and do business in Antarctica. Where are you actually going to start? Like, where?You don't even have the clothes to function properly in a place like that. 

Mohini: [00:05:15] So clothing is an important part of that next country checklist. Got it. At the time of this interview, Adia was the VP of Growth at Migo, a cloud-based platform that offers credit as a service to large businesses and offers loans to individuals. Migo started off in Nigeria. And can you guess what country they went to next? Brazil. So I had to ask Adia. 

Adia: [00:05:37] We already were working between Nigeria and San Francisco. So then do you make operations more complicated by going to Asia. No, cause then nobody's sleeping in the company, right. And somehow all of you have to work together, even if asynchronously.

Mohini: [00:05:54] But there's more to this Nigeria-Brazil relationship than time zones, similar climates and their love for football. 

Adia: [00:06:00] Were there options in Africa? Of course, but you know, sometimes you kind of look at the competitive environment and think through to which countries require the least amount of internal adjustment.

And in this case, Brazil and Nigeria are almost twinning with this credit problem, right? They have almost the same number of adults that lack access to credit. Their GDP is a little bit higher, but it also has a pretty massive informal economy. It also lacks the penetration from the formal credit networks.

The conditions that at least allowed Migo to successfully launch in Nigeria were available in Brazil at a similar quantum. 

Mohini: [00:06:45] And it's really that logical. When it comes to picking a next country, it’s  less a case of proximity and more a case of market, economic and cultural similarities. A case of making sure that the drivers of the business exist in this new country.

To take a deeper look at what it means to thoroughly prioritize the business drivers. We spoke to Maria Rotilu, who was General Manager at Branch when we caught up. Branch is a fintech that determines credit worthiness using mobile phone data. And then disburses loans to individuals based on that data. Branch’s expansion is strongly tied to their company mission to give world-class financial services to the mobile generation. And you can draw a clear line from that mission to how they think about the countries that they're in.

Maria: [00:07:37] I think one thing that was very appealing for Nigeria was just obviously the adult population. There's this conversation that population is not a determiner of market. But for a product like Branch, to an extent it is, because we are giving loans, loans of different sizes. So that kind of increases the target addressable market size. We also thought about like things like the KYC infrastructure, 

Mohini: [00:08:01] Know your customer, AKA KYC guidelines exist to reduce the likelihood that some Yahoo boy in a business center can jack your accounts and make off with money in your name. In Nigeria, the Central Bank implemented the bank verification number, AKA BVN as a measure to limit such fraudulent transactions.

It's one of the strongest KYC details a customer can provide. 

Maria: [00:08:23] There are markets where you can't exactly like identify who someone says they are. And the BVN obviously was a very huge determining factor. We also thought about things like the payments infrastructure, you know, we start with loans in most of our markets. If we cannot disburse those loans easily and we cannot receive repayments for them, then it's, you know, it's pointless. We also look at a few things like the credit Bureau strength. What do the default rates look like in that market? What's pretty much the appetite for digital financial services in that market?

So Nigeria was, you know, went green on all, you know, most counts. 

Mohini: [00:08:59] And that’s what it looks like when you've prioritized the drivers that matter most to you and done all your due diligence on what's available in your potential new country.

In that process, you might realize that the commercial realities are so different from your home country, that it ends up affecting even who you hire. Maybe in Nigeria, you needed two engineers and a customer success associate. And then you want to go to Togo and you realize that you need perhaps two accountants. Having experienced that firsthand, Wiza explains that it can feel counterintuitive because... 

Wiza: [00:09:31] You think expansion is like, you know, copy-pasting my model and copy-pasting my operational structure from here to this country. But because of the regulatory environment and the nuances around customer behavior in each country, you might need to set up a totally different looking company that does the same thing. 

Mohini: [00:09:48] And that brings us to this next part, which can absolutely be a headache. I'm talking about regulation. The rules vary so wildly, even for neighbors like Nigeria and Ghana, and this impacts pretty much everything from how long it takes you to get set up, to how much you need to have in your corporate bank account, even to who your first hires are as we mentioned. There's one practice that Branch has to help figure all this out, even further. When they've narrowed down a country with serious potential, the expansion manager goes there on what they call a Greenlight trip. Expansion manager surveys the market, meets people, makes connections, and if it all looks good, they run a small pilot to determine whether or not to go ahead and do a proper launch.

So all the planning and homework is great, but remember, (Wiza:  the tool for expansion is an aeroplane) and at some point you just have to get up and go.

Now, we're going to take a quick trip around the continent with Wiza as our pilot, and he's got to show us exactly how widely regulation can differ across African countries.

Wiza: [00:11:05] You look at a market like The Gambia. The Gambia is tiny, population hovering around 2 million people. But they've got four telcos there who are heavily competing. It's really, really incredible. And so you want to set up something in telecoms and the Gambia. You go to the regulator, the telecoms regulator, and you apply for a license and a short cord certificate. You can get it in two days. If you're trying to get the same thing in Nigeria, Lagos, center of excellence, it took us two and a half years at my previous firm to get the same thing that, um, I went to The Gambia and got in two days. 

You cannot walk in. You as Mohini, you cannot walk into Addis Ababa today and say I want to start a business as Mohini. You'll not be allowed. The Ethiopian law does not permit that to happen. So you must get an Ethiopian person or entity that is going to make these 50% of your, um, uh, ownership for that entity in that country. Imagine my surprise. I found out at the airport. 

Mohini: [00:12:05] Fun fact, the Kenyan government's 2020 ICT policy has a similar clause, licensed companies, and the ICT sector must have at least 30% substantive, Kenyan ownership.

Wiza: [00:12:18] Apart from the local shareholding. If you're going to do something in technology or telecoms, it means that you're bringing in at least a hundred thousand dollars in investment. In addition to the local partner. if you really want to do it alone, the Ethiopian investment commission will let you do it alone as a wholly owned subsidiary of a foreign entity. But it means that you're bringing at least $200,000 in investment capital upfront. And that has to be in the bank in Ethiopia before your papers are issued. 

Incorporating a company in South Africa is most challenging after Ethiopia for me. It takes quite a bit of energy. You require a local resident director. The company incorporation process itself is not as complicated, but opening a bank account in South Africa is the hardest thing I've ever had to do. In terms of banking. The regulation is completely different in South Africa. You don't need a license to set up a USSD service in South Africa. Amazing. One of the only countries. In Uganda, you need $10,000 to do that. $10,000 a year in Uganda actually. 

Then there's like talent and hiring expectations. What do people expect from a job. You're hiring in South Africa and you're not offering a financing plan for BMW or Mercedes Benz. You're not going to get anyone's attention because especially young people there have access to credit.

So you're coming in with your Lagos attitude, where everyone is taking boda boda, okada everywhere and you want to hire. And this like 22 year olds associate is telling you like, “ah, so what about like vehicle financing option?” And you need to be respectful of that because you know, they're not coming from a place of entitlement or a place of being stubborn, which was my initial reaction. My initial reaction, I was like, “oh my goodness. these people are spoiled.” But I quickly realized that it's just the way things are there. And you must, you must respect that if you're going to integrate into their society. You have to like mould your company to fit into the country that you're expanding into, as opposed to trying to expand your company as it is.

Forcing the market to adjust to the internal structures that you've built because you're...they’re too rigid, definitely leads to failure. 

Mohini: [00:14:20] And that's a key point, adaptability. For any country you're heading to, Wiza recommends checking out the Geert Hofstede cultural dimensions, which I'll link in the show notes.

It's a model for assessing the impact that a society's culture has on its values and how citizens act based on those values. There are six dimensions in total and they range from an uncertainty avoidance index to individualism versus collectivism. And each country is given a score on a scale of zero to 100. Definitely worth a peep, even just for fun.

Toba Adedurin: [00:14:58] Hi, this is Toba, Media Associate at Paystack. This episode will continue in a moment, but I'd like us to chat for a bit about what we do at Paystack. Paystack powers, payments, and growth for some of the most interesting fintech companies operating in Africa. As a fintech, you probably have hundreds of signups a day, maybe even thousands, and because of KYC regulations, you need to collect customer information.

But how do you know that your customers are who they say they are? How do you verify the information they've given you. With Paystack’s identity verification, APIs, you can verify a customer's bank account, phone number and BVN. To learn more about Paystacks identity verification service, visit Once again, that's Now let's head back to the show.

Mohini: [00:15:57] Before we tackle the next bit, let's run through our notes so far shall we? First getting expansion right is about getting timing right. Timing of company, market, product. Once that set and you're on the hunt for country number X, keep an eye out for business drivers, cultural and economic similarities, and definitely watch out for regulation.

All of this homework can and should totally take place way in advance of any actual moves. 

Alrighty. The next item is not sexy at all, but the way you handle it can make a huge difference in your company's finances. 

Wiza: [00:16:34] One of the first steps that goes into expansion is incorporating a new entity. 

Mohini: [00:16:40] Incorporation! It's got implications for how much you pay in taxes, the kind of access you have to capital, local direct requirements, et cetera.

Wiza: [00:16:48] I wish I had known the actual implications of our operational structures at the time.

Mohini: [00:16:53] Wiza says this part is boring, but once he said the cost implications could come in at hundreds of thousands of dollars, I was tuned in. So here's what happened. 

Wiza: [00:17:02] In our case, we had like a holding company for the group, that holding company then held another holding company that we use for operating companies. And then that company was the one that we would use to incorporate these various subsidiaries across the continent. 

Mohini: [00:17:17] Applying such a structure is helpful for centralizing investments. So if you're raising funds, all the funds could be received in the parent holding company, which owns all the operating companies that are set up across the different countries. It's neat and tidy. Another reason is for tax efficiency purposes. Wiza explains that with this structure, you could then set up a corporation in a country like Mauritius that signed double tax avoidance agreements with 46 States worldwide about 18 from Africa. And that could save you from paying extra in taxes. You do want to be wary of how you do this because some investors might read this as a sign that you're trying to evade taxes, and that could negatively impact your ability to raise funds. 

Wiza: [00:18:01] It also has an implication for like your investment. So say for example, you're a pan-African company and your headquarters and you're holding company’s in Nigeria. And then you wanted to raise dollar investment from the US, with the Nigeria naira perpetually in freefall. It presents very interesting challenges for investors to send money to that country. So you might want to set up like a Delaware C Corp. 

Mohini: [00:18:25] What does a Delaware C Corp have to do with access to international investments?

Fun fact, if you're a startup incorporated outside the United States, and you're trying to get into Y Combinator (the famous American startup accelerator), you must have a us entity registered. And chances are a majority of these international startups they get into YC are incorporated in Delaware. Paystack is one example.

So why Delaware? For one Delaware doesn't impose any citizenship or residency requirements on the owners of C Corps and you can incorporate remotely. So it's convenient for founders. On the investor side, investors feel more confident dealing with a state that has clearly established corporate law practices in case anything goes wrong.

As opposed to however the local law might be set up in a country that's foreign to them. So interacting with a Delaware C Corp eases the amount of legal due diligence that investors have to do. They can exit with confidence when the time comes. There's a host of other benefits and it can be a little tricky, but really valuable. 

Wiza: [00:19:28] And you know, this is a lesson that I have learned the hard way, uh, to the tune of several hundred thousand dollars.

Mohini: [00:19:39] Clearly it's important to get all this right from the beginning, because it'll only get more complex as a company scales. If it all sounds like a lot, you might consider looking up Stripe Atlas - Stripe’s platform for launching a startup from anywhere in the world.

Now that a lot of the technical stuff is out of the way. Let's talk about relationships. 

Wiza: [00:20:02] This one’s a bit controversial, but I believe it's true. I think like one of the biggest factors is like the extent to which you know people in that country. Because for technology businesses specifically, there isn't really a refined structure in many African countries for assessing you. You’re usually one of the first or second movers in that industry. So there's no basis of expertise for which you’re going to be evaluated by the internal structures within that country. 

Mohini: [00:20:28] So relationships is one key part who do you know on the ground? How can you leverage their network? Another side to this that highlights the importance of relationships and asking the right people certain kinds of questions is that countries also have varying cultural, racial and gender norms. And you want to navigate that with the help of as much local context as possible. For instance, take Adia’s experience in Brazil while at Migo. 

Adia: [00:20:57] I think my first trip, strangely enough, I don’t think I actually did business with any woman. So I was always the only woman in the room. Almost always the only black person in the building. Unfortunately, the social class of people of color in Sao Paulo is typically not high. So from what I heard, you are unlikely to see a person of color in any office. They may be cleaning the office but they’re not in the office, but you cannot decide not to do business because you don't see your type there. I guess that's where your Nigerian grit comes out. Right. That even if you don't see your type, you sha go there and get the damn thing done. So what I'm just saying is that when you're walking into a playing field and you just don't know, find people to tell you 

Mohini: [00:21:38] and people that tell you, if you're lucky, some of these people are already your teammates.

They may have been hired in-country. And so they come equipped with nuanced knowledge of the locale. In this next part, Maria shares what it means to hire new team members who are switched on.

Maria: [00:21:55] I have a philosophy, and I think this is a philosophy across Branch as well. That the first three people you hire or the first few people you hire will shape the rest of your, would I say team. Um, so when we do these green light trips, where we have to run like pilots, we tend to hire just a small team of people. When you're hiring the initial sets of people, you pretty much just want people who are, there's a word I like to use. It's called, like you're switched on. And I don't know what it means, but I can identify it in people. It's a hunger for knowledge, it's a, you know, really critical thinking. It's. It's, you know, someone who's like really connected to what you're trying to do, and they're very smart. They have some experience and they're very fast learners. And if you get it wrong, um, then there's this whole process of trying to fix it and trying to get other people that just kind of slows the whole thing down.

Mohini: [00:22:48] Hiring switched on team members can go a long way, but Adia also recommends looking out for individuals who are well-rounded and she explains why. 

Adia: [00:22:58] There's something we used to do in consulting called the pizza test. The pizza test is essentially, if you were stuck in an airport with this person, would you actually call them and say, “let's go and get pizza.” And so that's something that is beyond the skills that the person has acquired. Like, can you actually sit down and have lunch with this person? And there’ll be gist. And you won't be like, “God, let me quickly get my food and get up outta here.”

Mohini: [00:23:21] And when it comes to expansion time, you're managing time zones with the office back home, having people work interesting hours, playing interesting varieties of roles. It's #thatstartuplife all over again. 

Adia: [00:23:33] People are going to have to really like talking to each other to be like, man, it's 5 o’ clock. There’s Third Mainland, I need to go on this dude wants to be talking about what? You know, so you have to like make sure that you find as many possibilities for alignment as possible.

Mohini: [00:23:48] And from then on it's you and your team making magic. 

Those first months bonding with a new team in a new country could be some of the best memories of your entrepreneurship experience. It kind of feels like being back in college again. Working hard, pulling all nighters. And if you're lucky, you get to play hard as well.

There's just something about discovering a place and learning with teammates that you respect, all towards a greater entrepreneurial goal, that is very rewarding. Wiza knows what I'm talking about. Here's his response when I asked him about his favorite part of this whole, 

Wiza: [00:24:25] The people like... There are so many amazing people on this continent. You meet other young black people in their like, you know, mid to late twenties and the conversations that they have are very like pan African, because they're exposed and they've seen the world, etcetera. So you think, you realize like that in all of these cities, there are people who have sense, but then the conversations are always taking place in the isolation. So we haven't really realized that like all of us are saying the same thing. But it makes me very optimistic for the future, because then it means that like the significance of these political borders that were put in the 54 African states, um, starts to become less relevant as people age. I no longer view myself, like as a Malawian, living in Kenya, doing business mostly in South Africa and Lagos. I'm just like, uh, I'm an African doing business in Africa and living in Africa, like this is my home.

And I've gotten to the point where I am at home in many cities in many different ways.

Mohini: [00:25:23] This episode was released about nine months into the COVID pandemic in 2020, and international travel had taken a severe dip as a result. We checked back in with Wiza to see if his views had changed regarding the airplane as a tool for expansion. And he said they haven't, especially because a market like Africa is so highly relational and people have a culture of doing things in person.

So he expects that once the pandemic is over, people will go back to traveling. This makes sense, because at some point, international expansion requires an on the ground presence, especially on a continent where many cultures value physical FaceTime, that probably won't change. But in the process of getting ready to expand, what will evolve is your understanding of your product and your market, and how you contribute to the larger ecosystem, whether in Africa or outside the continent.

And that brings us to the end of this episode. Thank you for listening. And a huge thank you to Wiza Jalakasi, Marcello Schermer  and Maria Rotilu  for making the time to share their knowledge with us. In the next episode, we head down a way different path to speak with Steve Amaza, the customer success lead at Paystack. Steve breaks down how to hire amazing customer success experts. How to empower a support team with tooling and the metrics has team tracks to drive results. 

Every week we share a tightly curated debrief of the most important FinTech news from around the continent, as well as jobs, events, and much more. To subscribe kindly visit Once again, that's

Decode Fintech is brought to you by Paystack. Paystack helps Africa's most successful fintechs build powerful, scalable financial service products with the industry's best documented APIs. Please visit to find out more. 

This episode was produced and narrated by me. Edited by Temitope Olaleye, Bankole Oluwafemi.

I'm your host Mohini Ufeli. Once again, thank you so much for listening and see you in the next episode.