Business school case study: banking on the unbanked

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.Hassan Bourgi, co‑founder and chief government of Djamo, is wrestling with a strategic alternative. His firm has develop into one of many main bank card issuers in francophone Africa, however competitors is intensifying.Bourgi’s choices are: double down on Djamo’s core Ivory Coast market to strengthen its place earlier than increasing regionally; speed up its entry into Senegal, Burkina Faso and Cameroon to seize first‑mover benefit; or launch new monetary merchandise equivalent to micro‑lending, which might enhance revenues however elevate regulatory and credit score‑threat issues.Selecting the flawed trade-offs might gradual momentum in a market that’s lastly attracting international fintech curiosity.After finishing his grasp in administration at Eada in Barcelona and later constructing and promoting his profitable start-up Busportal in Peru, Bourgi had returned to Ivory Coast in 2019. Right here he discovered a banking system nonetheless designed for the few — greater than 120mn adults throughout francophone Africa have been unbanked or underbanked. Six years later, Bourgi and his enterprise associate, Régis Bamba, had turned Djamo into the area’s largest card issuer, with greater than 750,000 customers and $4.5bn in transactions processed.Hassan Bourgi, left, and Régis Bamba of Djamo, which presents banking to francophone Africa The area stays one of many least banked on the earth. Fewer than 1 / 4 of adults in francophone Africa maintain a proper checking account, in contrast with greater than 60 per cent in anglophone African international locations. But cell phone penetration exceeds 80 per cent and cellular cash adoption has surged, making a digital-first client base with out conventional banking infrastructure.For many years, banks targeted on excessive‑revenue clients in city centres, leaving youthful and decrease‑revenue populations to depend on money or casual financial savings schemes. This created a vacuum that cellular cash suppliers equivalent to Orange Cash and Wave partially crammed.The authorsJordi Díaz is dean of Eada Enterprise College; Daphne Halkias is dean of doctoral programmes at EIM — European Institute of Administration; and Tatiana Harkiolakis is a analysis fellow at Ecole des Ponts ParisTech. They’re co-authors of Digital Entrepreneurship and Disruptive Innovation (Routledge, 2025)However for now, their function is basically restricted to dealing with transactions, with little progress in direction of providing wider banking companies. “Individuals are not on the lookout for a financial institution department,” says Bourgi. “They’re on the lookout for a monetary expertise that matches of their pocket.”Djamo — “hiya” in an Ivorian dialect — launched with a easy however highly effective proposition: an app‑based mostly account designed to work on low-cost smartphones, linked to a Visa card with no upkeep charges. From the outset, the corporate prioritised two issues conventional banks usually underestimate: person expertise and belief.In contrast to opponents that depend on third‑social gathering logistics, Djamo constructed its personal supply community at hand clients their first card in individual. This solved the “final mile” problem and gave a human face to a digital journey. Phrase of mouth unfold rapidly. Inside 18 months, the corporate scaled from 90,000 to 750,000 customers, processing transactions price billions of {dollars}.Its success caught the attention of buyers. Acceptance into Y Combinator — the Silicon Valley accelerator behind Stripe and Coinbase — validated Djamo’s mannequin. In 2022 it raised $14mn in Collection A funding, one of many largest quantities for a francophone African start-up. The cash has been used to develop its engineering crew and speed up regional progress.The corporate has since added financial savings, invoice funds and peer‑to‑peer transfers, positioning itself not simply as a card issuer however a monetary platform, constructing the foundations of a “tremendous‑app” for monetary companies.Djamo’s rise has not gone unnoticed. Regional banks have reacted, creating digital divisions and cellular cash suppliers have expanded their merchandise. Wave, a Senegal‑based mostly funds unicorn, is a robust competitor.Djamo’s journey is emblematic of a broader shift in African fintech to options that replicate native realitiesDjamo stays targeted, focusing on tens of millions of “financial institution‑prepared” clients equivalent to salaried employees, freelancers and younger professionals who’ve outgrown cellular cash however stay excluded from conventional banking. “Step one is to win the center,” says Bourgi. “As soon as now we have their belief, we are able to transfer additional down the pyramid.”His technique is just not with out threat. Regulatory frameworks stay fragmented, and infrastructure gaps — from restricted credit score bureaus to uneven web protection — constrain progress. However Djamo’s mannequin, which blends scale with native execution, presents a blueprint for navigating these limitations.The larger query is whether or not the corporate can develop into for francophone Africa what M‑Pesa is for anglophone Kenya: an indispensable monetary layer woven into each day life. To take action, it might want to develop past Ivory Coast into different core markets equivalent to Senegal, Burkina Faso and Cameroon whereas sustaining its deal with product simplicity and buyer belief.FT Govt MBA Rating 2025© Getty ImagesSee the EMBA rating and report.The subsequent frontier could also be lending. With transaction information from tons of of 1000’s of customers, Djamo is in a powerful place to underwrite small, brief‑time period loans — a transfer that would considerably deepen monetary inclusion.Djamo’s journey is emblematic of a broader shift in African fintech to options that replicate native realities. Its story underscores a lesson that many buyers and incumbents are actually studying: monetary innovation in Africa won’t come from importing western banking fashions, however from reimagining what finance appears to be like like when constructed for the unbanked first.If it succeeds, Djamo can be greater than a fintech success story. It would present that francophone Africa, lengthy ignored in international finance, can function a proving floor for among the most radical experiments in digital banking wherever on the earth. “We aren’t right here to digitise the outdated system,” Bourgi says. “We’re right here to construct a brand new one.” Now contemplate . . . What components clarify the historic below‑illustration of francophone Africa in international fintech funding?How ought to conventional banks reply to the rise of gamers like Djamo — via competitors, collaboration or acquisition?Ought to Bourgi go “deep” and safe his maintain on the Ivory Coast market, go “extensive” and develop into neighbouring markets or go “lateral” and diversify Djamo’s product portfolio?May Djamo develop into the Revolut of francophone Africa — a fintech rising right into a full digital financial institution — or does its context demand a unique playbook?How ought to regulators assist innovation whereas guaranteeing monetary stability and client safety?