Digitising Traditional Money Circles: An Interview with MoneyFellows CEO Ahmed Wadi

It was a few years ago when Ahmed Wadi - in a turn of event that’s familiar to a lot of us - maxxed out his credit limit while living in Germany, leading him to come up with the idea for MoneyFellows. “I had used the maximum amount available to me from formal financial institutions, and I was recalling the ‘gam’eya’ tradition from back home in Egypt,” he remembers. “Of course,I couldn’t find one in Germany - it’s not in their culture.” Gam’eyas - sometimes known as money circles - are a traditional form of financing where in a group of people each pay a predetermined monthly amount into a pot, and each of these participants take it in turns to cash out the total money at the end of each month. “Eventually I found and entered a gam’eya in Egypt while i was still in Germany, but there was a lot of hassle in getting the money to and from Egypt,” he says. It was then that he wondered, why couldn’t this whole process be digital? From finding a suitable money circle for the amount of money you can pay in - and would like to cash out - to sending and receiving money seamlessly, MoneyFellows was soon born in the summer of 2018.

The MoneyFellows app is pretty simple. You create a profile and go through an onboarding process, which includes a financial assessment which determines each user’s maximum limit of money circle they can join. From there, each user can browse the available money circles by searching and filtering by monthly payment, total cash-out and the cash-out schedule most suitable to them. Once you’ve joined a money circle - and that money circle is complete - there are several ways to both send and receive money, including bank transfers, credit card payments, mobile wallets and Fawry. Some corporate companies have also signed up with MoneyFellows, allowing their employees to have their money circle dues directly taken from their salaries.

An age old tradition in Egypt, and across other African and Arab countries, gam’eyas rely on face-to-face interaction and trust built between people you know well and can rely on to pay their dues in full, and on time. Needless to say, digitising this trust was one of the biggest challenges MoneyFellows faced when starting up. “Our assessment tools and processes are the core of the service we provide,” explains Wadi. “It’s up to us not to give someone a limit that they can’t afford, but at the same time not to give them a limit too low that the whole process isn’t worth it for them. So the technology behind our assessment tool needed some time.” Wadi continues to explain that building trust between MoneyFellows and their potential users also needed a huge marketing push. “We’re changing to change a culture that has been engrained for thousands of years. People usually only enter into money circles with very close friends and family members. It’s difficult to build a trusted brand, especially when it comes to your own money. So we launched a referral programme, so that new customers are recommended by their own friends and family, to help break that barrier.”

Beyond that, MoneyFellows taps into a sector of society that are either unbanked or underbanked and often that means they are less technologically-literate too. So the usability of the MoneyFellows app is absolutely core to its success. “We had to iterate a lot in the product, to make sure that the whole process, from the assessment to joining a circle, was as simple and as straightforward as possible,” continues Wadi, about the hard work put into the UX and UI of MoneyFellows. And the hard work has paid off - the app currently counts over 150,000 active users since their launch in June 2018, and have since then added 200 corporate partners to which offer salary deduction pay-in processes for their employees to seamlessly join money circles through the app.

“FinTech is an exciting industry to be in right now, but at the same time it’s challenging because it’s highly regulated,” explains Wadi. “On the other hand, when you’re talking about innovating in that sector, there’s often no regulatory framework for the new thing you’re trying to introduce. It’s kind of a chicken-and-egg problem. Do we launch and grow and risk the eventual regulations slowing us down, or do we raise capital and wait for the regulations to come? Investor confidence vis a vis regulations was one of the big challenges for us.” It seems like that challenge has been overcome as MoneyFellows managed to raise a huge $4 million Series A round earlier in June 2020, following a $1 million pre-series A in August 2019.

“We’re aiming to launch of a few new add-ons to the core MoneyFellows products, as well as expand our user base into more governorates in Egypt,” says Wadi about how the big investment will be used to grow their business. “We’re also planning to expand into new countries around Africa, and we’re in talks with some big Telecom companies in the GCC area to white label and sell them our software to integrate into their own services.”