The founder of “Nukod Holding” reveals future plans for the improvement of four satellites
Abdul Rahman Ali, founding partner and executive director of the “Nukood Holding” group, was a guest on the “Level CEO” show, who spoke about the creation of his company and mid- and long-term plans.
But he revealed, during the last episodes of the second season of the program hosted by Hazem Sharif, editor-in-chief of the Al-Mal newspaper, and broadcast every Thursday at eight in the evening on the “ALMAL TV” channel, Nukod Holding’s vision for branch expansion, and the future services it intends to provide. , recapitalization plans.
And to the dialogue text:
● Hazem Sharif: What is the educational and practical experience of the founding partner of “Nukod Holding”?
Abdul Rahman Ali: I graduated from the Faculty of Commerce, Department of Accountancy, Zagazig University in 2006 and I was “lucky” because I joined the banking sector right after graduation and worked in it for more than 16 years, during which I gained a variety of experiences in most departments of the sector; Starting in retail banking, to the position of Head of Corporate Credit at a bank for the city centers in Cairo.
She also earned a master’s degree in finance and banking management, and a doctorate in pre-financing, which is why the idea of establishing “Nukod Holding” was born.
● Hazem Sharif: How did “Noqod” come about as a start-up company, and at the same time a holding group that includes 4 companies under its umbrella, the administrative structure of these branches and their areas of work?
Abdul Rahman Ali: There are 3 branches out of four that operate under the umbrella of “Nukod Holding”, so the idea is that it depends on the establishment of an activity that works according to an integrated business cycle, and the main goal of the establishment of the holding is to penetrate the area of non-banking financial services, which is what happened . The company “Nukod Finance” was recently founded.
At the beginning, we founded “Nukod Holding”, and the main goal was to deal with everything related to financial technology, which required the establishment of the IT company “Nukod Technology Solutions”, whose main goal was the development of all programs for group companies and their internal development; So we are not dependent on any company outside the scope of the group.
Then we founded “Nouqd for Electronic Payment Solutions”, which is in the process of submitting an application for a license to perform activities from the Central Bank, and we expect to receive a license in the first quarter of next year, then we founded “Nukod za Financije”, which submitted request to the Directorate for Financial Supervision to obtain a license to carry out activities. It specializes in the financing of small and medium-sized enterprises, which is an essential element in our work, especially since recent reports show that more than 80% of the industrial sector are small and medium-sized enterprises, which contribute with more than 80% of the gross domestic product, which is why we focused the most attention on this sector.
The last company founded in the group is “CashNow”, and it has been the focus of technological transformation in the group and also focuses on providing services to SMEs, as it aims to serve the employees of SMEs and provide them with financing.
● Hazem Sharif: What is the added value in the services that will be provided by “Nukod Holding” and the companies that operate under its auspices in the activities they are engaged in and how did the idea of the activity come about?
Abdul Rahman Ali: We derived the idea from the activities of small and medium-sized companies, which usually face some obstacles, especially with regard to the type of work that requires digital transformation, which clearly appears in the “pact that these companies give to their representatives, and salary transfers .” Projects should provide these services in real time through an easy-to-use digital platform or mobile application.
We found that if we establish a digital platform that serves this category of projects, we will be able to gain market share in the local market, and when we started to establish a digital platform, we discovered that a large percentage of this sector needs funding, and accordingly we recently embarked on submitting an application for a “nugget for financing” license, and thus we will have a technological solution through the company “CashNow”, and the provision of financing for small and medium-sized entrepreneurs through “Nukod for Finance”, which is in the process of obtaining initial approval for the performance of activities from the Administration for Financial supervision in the next two weeks.
● Hazem Sharif: What is the current value of the holding’s capital? Who are the founders?
Abdel Rahman Ali: The number of main partners in the group are 3 Egyptian partners, and the beginning was with a paid-up capital of 5 million pounds. A capital increase is currently underway to fund the expansion, to reach £100m by the end of next December, internally through existing partners.
● Hazem Sharif: Did you go around to get funding?
Abdul Rahman Ali: We have not tried to get external funding. Because we believe that good companies can easily attract external financing and because we are focused on achieving normal and careful growth rates, and on achieving expansions that depend on real available opportunities, which ensures sustainability and continuity.
£40m, raising the capital of “Noqod Finance” to £40m … and “Cash Now” to £50m
● Hazem Sharif: How will the capital increase be distributed among the subsidiaries?
Abdul Rahman Ali: We will increase the paid-up capital of “Nukod for Finance” to 40 million pounds, and the paid-up capital of “CashNow” will reach 50 million pounds, and the rest will be divided between “Nukod for Technology” Solutions” and “Nukod for Electronic Payments” .
Noqod for Finance targets SMEs
Hazem Sharif: What type of financing will “Nukod for Finance” provide to small and medium-sized enterprises?
Abdul Rahman Ali: The funds will be directed mainly to working capital funds, most of which, according to the law, are local industries.
Cash Now will be the fastest growing company among its sisters
● Hazem Sharif: Tell us about the “CashNow” activity.
Abdul Rahman Ali: “Cash Now” is the only one among the group companies that actually started its activities last June, and currently has a client portfolio that includes 250 companies as existing clients, provides services to its employees and a new version of its mobile application is currently being developed to add service for new companies, and the transition to an electronic wallet for outgoing and internal cash flow services, and with Fawry we started cooperation in the field of electronic payments.
But he explained the benefits of the “CashNow” service for employees of small and medium-sized companies, pointing out that a large number of employees of these companies have limited salaries, so it is difficult for them to buy banking products for the public, and there is also the role of the “CashNow” electronic application, where they can download the “CashNow” electronic application, register on it and do business and buy through it.
By the middle of next year, Cash Now is targeting 350 companies
He pointed out that among the services for employees is the service of payment of salary in advance, which has a maximum limit that does not exceed 50% of the employee’s salary, and can also pay in installments according to the contract concluded with the company.
But he pointed out that “CashNow” aims to reach the number of its existing customers to between 300 and 350 companies by the end of the first year of operation in June 2023, and then to between 700 and 1000 companies by the end of the first 3 years. years of work.
Negotiations with the companies “Valeo” and “Contact” for the provision of consumer financing services
● Hazem Sharif: What business model does CashNow rely on?
Abdul Rahman Ali: First we offer a service to companies, then comes the stage of negotiation, then the agreement, and “Cash Now” will move towards providing additional services such as transfer from one electronic wallet to another; On the condition that both enter the company, as well as providing life insurance, health insurance and consumer financing services, in cooperation with a partner on the domestic market, emphasizing that negotiations are underway with “Vale” and “Contact” for this service.
● Hazem Sharif: What differentiates “CashNow” in providing salary transfer services from banks?
Abdel Rahman Ali: The online application “CashNow” is easier to use and also targets lower salaries than those targeted by the bank, with a minimum of £1,000.
● Hazem Sharif: Tell us something about “Nukd Finance” and its business model.
Abdul Rahman Ali: “Nukod Finance” – in the process of obtaining a license – and its business model depends on more than one axis, since it focuses on the sectors defined by the Financial Supervisory Authority, especially industrial and commercial, and providing them with benefits in a flexible way and for the segment of customers who are not covered by the market from the level of 201 thousand pounds to 1 million pounds, which is the scope of the main focus, and installments for more than 36 months, according to the requirements of the Financial Supervisory Authority, and we will provide financing for working capital in the range of 500 thousand pounds to £1.5 million.
Noqod Finance has a strong business plan for this segment and a team with banking experience and we hope to gain a strong market share from the beginning of the first year of operations.
● Hazem Sharif: What is the plan of “Nukod Finance” to obtain financing within 3 years and target market share?
Abdul Rahman Ali: The company is targeting a market share of between 20 and 25%, and after 3 years they will be able to start negotiations with banks to get financing packages for the company.
● Hazem Sharif: Which companies are expected to have the highest growth rates among the holding’s subsidiaries in the next three years?
Abdul Rahman Ali: “CashNow” as the first subsidiary of the group, and belongs to a promising sector that awaits a strong future with the support of the consequences of Corona and the imposition of virtual transactions.
● Hazem Sharif: Who is the most prominent competitor of “Nukod Holding” companies on the domestic market today?
Abdul Rahman Ali: There are two main competitors of “CashNow” in the field of salary transfers, they are “DoPay” and “PayNass”, and in terms of billing services there are “Aman and Fawry”, and in terms of transferring financial portfolios there are “Yalla” and Tilda”.
However, the group is characterized by gathering a large number of services on one platform, and in addition, it can solve any problem, which is a business model called one stop shop, which we derived from the work patterns of other international companies.
Regarding the competitors of the company “Nukod Finance”, Ali said that “Tasheel and Aman” are the most prominent among them, but the market is still absorbing more and more companies, and the proof of this is that there are about 36 banks that deal with small and medium financing companies, and the market is still not saturated.
A capital increase of around £60m next year
● Hazem Sharif: How will the funds be raised in case of the second capital increase? And how much is it worth?
Abdel Rahman Ali: The second capital increase will be between £50m and £60m, and will take place in the second half of next year, and will be directed at “Noqod for Finance”, bringing its paid-up capital to £100m, through the current partners, since we see no need to include new partners in the current period. And next year we could witness the implementation of funding rounds aimed at new partners for “CashNow”.
● Hazem Sharif: What is the vision of the company in the next five years?
Abdul Rahman Ali: There will be an expansion plan at the holding level, and the geographical scope of work will not be limited only to Africa and the Middle East region, but will prioritize to take advantage of the competitive advantage of technology, especially in the local market, and establish a strong customer base, which will Focus assortment to be in the next three years.
● Hazem Sharif: When do you expect “Nouqd for Technology Solutions”, “Nouqd for Finance” and “CashNow” to become profitable?
Abdul Rahman Ali: Every company needs a period of 18 to 24 months to become profitable and to reinvest the realized profit, according to the established business plan.
● Hazem Sharif: Tell us about the business model Noqod Holding relies on?
Abdul Rahman Ali: The business model we rely on combines startups with traditional, classic companies.
● Hazem Sharif: How does Noqod Holding stand up to companies that receive huge foreign financing to burn on expansions with the goal of profitable growth, while relying on the traditional financing model?
Abdul Rahman Ali: “Nukod Holding” is betting on the loyalty of users of its services, and the population density in the local market, which exceeds 100 million people. The technology company targets about 25 to 30 million citizens, of which 90% have smartphones, which means that there are opportunities on the market, and that In addition to targeting the sustainability of activities.