Exclusive Interview with Firas Ahmad
On AzamPay, Sarafu, and AzamPesa
Firas spoke with us on June 6 and 14, 2024. We covered his journey from studying in the United States to building companies in Tanzania.
Get the full Atoms & Bits Magazine by clicking here to read Ahmad’s complete answers to 12 important questions.
Our conversation explored how his time at Harvard and Georgetown shaped his business approach. Firas shared insights on founding Sarafu, AzamPesa, and AzamPay - three key players in Tanzania's fintech sector.
He discussed the challenges of bringing new financial technologies to East Africa and his vision for digital payments in the region. Firas also provided advice for young entrepreneurs and his thoughts on Tanzania's growing innovation ecosystem.
The magazine also covers:
Total funding raised by Tanzanian startups in the first half of 2024
Profiles of key ecosystem support organizations
Fastest-growing Tanzanian tech companies
Most popular Tanzanian apps by user numbers
50 anonymized messages from Tanzanian tech leaders
Tech stacks used by five Tanzanian startups
Much more on Silicon Dar and Silicon Bongo
You can listen to this interview next week on Substack, Apple Podcasts and Spotify. Subscribe to The Atoms & Bits Audio Experience for more content.
Background
Firas Ahmad leads AzamPay and Sarafu and co-founded AzamPesa, three businesses changing how Tanzanians do business. As Group CEO, he's helping bring digital payments and e-commerce to a country where cash is still king.
Mr. Ahmad's journey to Tanzania's tech scene started at Georgetown and Harvard universities in the United States. He says this education gave him a different way of thinking (mindset).
"In Tanzania, the education system and work environment push people towards a very narrow mindset," Firas explains.
"You can only do one thing, and there's only one way to achieve your goals. In contrast, the American system gives you a much wider view of what's possible."
This broader outlook has shaped his approach to entrepreneurship in Tanzania. He's not just copying ideas from other countries. Instead, he's creating new solutions for local problems.
AzamPay, one of Ahmad's companies, helps businesses accept digital payments. It works with local banks and mobile money services. "We're making it easier for businesses to receive money, make payments, and manage their finances," says Ahmad.
His other company, Sarafu, is changing how small shops buy their stock. It provides a digital platform for shop owners to order supplies and pay for them online. This is making Dar’s supply chain more efficient and transparent.
Changing Business Habits
Ahmad's companies are already changing how Tanzanian businesses operate. He shares an example from Sarafu:
"When we launched, we required retailers to order and pay on our app. Everyone said no at first. Even my own team wanted to open a call center. But I insisted on changing behavior for scalability."
This decision paid off. After a year, the ordering patterns changed dramatically.
"Initially, 95% of orders were placed between 11 AM and 3 p.m. But after a year, 60% of orders were placed between 8 PM and midnight. Customers realized they could place orders any time, especially when not busy with customers."
Challenges in a Cash-Based Economy
Despite these successes, Firas faces significant challenges. Tanzania's economy still relies heavily on cash.
"About 97% of point-of-sale transactions are still cash-based," Ahmad explains. "This is partly due to the fees associated with digital payments. Both merchants and consumers often bear the cost."
To address this, his team is trying new approaches. For example, with AzamPesa QR code payments for ice cream vendors, they're not charging the seller. Instead, they add a small fee for the consumer.
"This works because ice cream is an impulse purchase," Ahmad says. "The convenience factor can justify the small additional cost."
Untapped Opportunities
Firas sees immense potential for innovation in Tanzania, particularly in areas that address everyday needs.
"Social commerce is growing quickly, but it's still informal," he explains. "You might have an Instagram page, then someone sends a WhatsApp message, you exchange a peer-to-peer (P2P) transfer, and a Boda Boda delivers the product.
According to him, “Those are innovations that have happened organically because people need to transact. There's a lot of potential to scale these activities and create more value for consumers."
However, Ahmad is realistic about the challenges. "Tanzania's discretionary income is limited, with a GDP per capita of around $1,100," he notes. "This means we need to focus on essentials like food and daily consumables, which have tight margins and competitive pricing. It's not a slam dunk - you'll have to figure out how to make it work."
Despite these challenges, Ahmad sees opportunity. "Compared to Kenya, which has received a lot of investment in these spaces, Tanzania is still far behind," he says. "There's an opportunity to catch up and build digital infrastructures that can facilitate commerce and improve life for consumers."
While his expertise is in fintech and e-commerce, Firas acknowledges potential in other industries. "There are likely opportunities in other sectors, like agriculture and energy," he adds. "But I'm not an expert in those areas."
Leadership and Team Building
Ahmad's approach to leadership focuses on two key areas:
"First, you need to set a vision and be the keeper of that vision," he explains. "Everybody in your company should know where the company is going and what role they play in achieving that goal."
"Second, and equally important, is finding the right people to work in your company.”
His recommendation is that, "You need to hire people who are aligned with that vision and whose self-interest matches the company's interest."
This approach is especially important in Tanzania, where Firas notes that the professional culture is different from more developed markets.
"In a small company or startup, you need people to think beyond their specific task. They have to understand how their job fits into the larger process and make sure that process gets done, not just their individual job."
Managing Remote Teams
Ahmad emphasizes the need for hands-on management, even in unfamiliar areas.
"I've had to get involved in all different departments at one time or another," he says. "I've learned how to manage IT (information technology) departments despite not being a technical person.
Firas further recalls, "I've had to figure out legal and regulatory issues, sales and marketing, everything."
He also stresses the importance of staying close to the ground:
"I spend time in the market. I'll go talk to customers and find out what's going on. That's how I recognized we had a real problem with late deliveries and had to reorganize our logistics."
Lessons from Other Markets
Firas’s experience in other countries has informed his work in Tanzania. He shares an example from Bangladesh:
"I was friends with one of the founders of Bkash, one of the larger mobile money companies in South Asia. They grew very quickly, capturing a big market share before the telcos even got into the money business."
This experience helped shape his approach with AzamPesa in Tanzania:
"We thought we could bring competition to the mobile money market based on value, not just access. We saw an opportunity for different values to be created, and we're building those out now."
Regulatory Environment
Mr. Ahmad discusses the legal framework for fintech in Tanzania:
"One challenge we faced was with USSD access, which is crucial for mobile money services. I actually wrote an article about this to communicate to regulators and stakeholders that this is an issue we need to think about differently.”
He continues, “My argument was that, with respect to financial service access in a market like Tanzania where smartphone adoption remains limited, the USSD menu is essentially a public utility that requires oversight similar to electricity or fuel."
Firas suggests potential improvements:
"Regulators face a host of challenges given the speed at which technology changes. Whenever regulators can listen to companies and hear what the underlying challenges are, I think it is very helpful. I believe the regulators in Tanzania do this quite well and are very open to engagement from industry.
“This is in part why we established TAFINA (the Tanzanian Fintech Association),” he says, “relevant regulators (such as the Bank of Tanzania) received it well.”
Firas adds, “It means communication goes both ways. Industry should also be open to understanding government needs, especially when it comes to funding public infrastructure and building out the country."
Ahmad also points out the need for clarity:
"Sometimes there can be overlapping jurisdictions or conflicting requirements, which can be challenging for startups to navigate."
Advice for Young Entrepreneurs
Based on his experience, Firas offers advice to aspiring founders in Tanzania:
"My advice is to first get the best job at the most professional company you can for at least a couple of years.”
He wants you to, "Get well-trained in moving up that corporate ladder. This will give you the rigor and professionalism you need, which you won't likely learn in a startup."
Firas also emphasizes the importance of understanding the local market:
"Focus on solving real problems, not just chasing the latest tech trends. Understand your market deeply. What works in Silicon Valley or even Kenya might not work here. Be prepared to experiment and pivot."
Ahmad also highlights a key difference in the Tanzanian business environment:
"Remember, in Tanzania, capital controls the country, not labor. Access to capital is almost impossible here. You either have capital or you don't. Even for the startups you see in Tanzania right now, I'm a privileged startup coming from the AZAM group. It is difficult to compete with me in certain areas because of my access to capital."
Personal Interests and Causes
Firas gave us a glimpse of his life outside of work:
"I spend a lot of time with my family—my wife and three boys. They're all growing up now. I'm also basketball player; I played in high school. Even in Tanzania, I have a group of friends I play basketball with once a week at the Starlight Arena. I also read quite a bit."
He also discusses his involvement in community support:
"I've been involved with supporting an orphanage in Goba (a ward of Ubungo District in Dar es Salaam). My kids outgrow clothes and shoes; sometimes they come back with extra candy from Halloween. I'll take some of this stuff and give it to a colleague who lives near the orphanage."
This personal involvement has inspired a broader initiative:
"We're thinking about how to enable support for these types of orphanages or small community programs for disadvantaged people, especially from other countries. We're exploring ways to facilitate this through digital methods, directly connecting supporters with those who need help."
Writing and Knowledge Sharing
Firas explains his motivation for writing and sharing his knowledge online:
"Writing clarifies thinking. You can't claim to have thought about something deeply unless you've been able to write out exactly what your argument is.
He told me that, "As soon as you start writing, you have to focus on the argument—what you are trying to say."
Ahmad sees his blog posts and articles as resources:
"For example, I was at a Bank of Tanzania (BoT) conference, presenting on AzamPesa. A director asked questions, and I could easily explain and send them an article I had written on the topic. When you write something down, you have to be very clear, so another person can read and understand exactly what you're saying."
Vision for Tanzania's Digital Economy
Looking into the future, our magazine's first issue headliner shares his vision:
"I see Tanzania becoming a leader in innovative fintech solutions (like M-Pesa) designed for emerging markets. We're not just copying models from the West; we're creating solutions that address the unique challenges and opportunities in our market."
He envisions widespread changes:
"I see a future where digital payments are the norm, not the exception, even for small transactions. Where small business owners have access to the same digital tools and market information as large corporations. And where the informal economy becomes more formalized, leading to greater financial inclusion and economic growth."
Firas emphasizes that this vision goes beyond technology:
"It's about changing behaviors and creating the right incentives. That's why we're focusing on value creation rather than just competing on price."
Get the full Atoms & Bits Magazine to read Ahmad’s complete answers to 12 important questions.
Absolutely 👏👏👏.. safari ya jamaa inainspire sana... Hvi ndo inavyotakiwa vijana wasomi wa kitanzania tuwaze