Salvador Anglada on AI-powered financial inclusion in Africa

Speaker A: Foreignor Anglada joins us for this episode of what's Next. He is the chief executive officer of optasia. Um, before we talk any business, Salvador, I know that you are Spanish and you are from Madrid originally. Are you still celebrating? Congratulations for being World cup champions. What a wonderful achievement for your country.

Speaker B: Thank you very much. It's going to, I mean, we continue celebrating. We cannot stop. Um, it's been a fantastic three, four days. Uh, we felt, uh, we were so happy with uh, what happened. And also we felt the energy not only in Spain, I have to say, across. I mean a lot of people were supporting the Spanish team against Argentina and it was great. I got, I got so many, uh, congratulations from so many people across. Uh, yeah, fantastic moment, second star for us. Uh, yeah, great, great to feel uh, how we're feeling and how the country is feeling about this, uh, this win.

Speaker A: Absolutely wonderful. And I, I'm assuming I'm, I'm, you know, assumptions are dangerous. But uh, being from Madrid, you must be a Real Madrid supporter as well.

Speaker B: It is.

Speaker A: So you have a, you have a, you have a new coach, you have uh, some, some fantastic new players. So I'm looking forward to watching your team playing this season.

Speaker B: Yeah, thank you very much. Mourinho is coming. You're totally right. Let's see what happened this next session. Thank you very much. Thank you.

Speaker A: And you've got uh, Mark Cucure on your wing, on your full back there, which is on the left back, which is fantastic. But listen, we're not here to talk football. You and I can talk football for hours. I'm here to talk about optasia and what an impressive start and what a, what an interesting company for people who are not familiar with Optasia. What is optasia? What does Optasia do?

Speaker B: So we are, um, uh. Uh. I like to say we are the uh, leading AI platform, um, allowing, uh, to provide, uh, financial inclusion at scale. Um. And what does it mean? We provide, uh, micro loans, small loans to people, uh, uh, in a short period of time and secure, absolutely unsecure loans. And we do it at scale because we provide data, uh, in 38 countries, uh, we provide uh, more than 32 million credit decisions, uh, uh, per day and we distribute more than $6 billion across all those countries. Uh, we do that using what we call alternative data. We do not, uh, use uh, the normal, uh, structured data that the banks use. Uh, in these countries people are unbanked. Um, and what we do is try to find out what are the data that we can use in order to recreate important, which is the behavior of people related to credit. How much we can provide to someone in order them to pay back, uh, how much they can afford, uh, to get that. Because all these credits as I said are fully unsecured. So there is no collateral related to that. If people cannot pay, we cannot do anything about that.

Speaker A: That is absolutely fascinating. So you're doing something completely different to how it was done in the past historically. And this is all driven uh, by AI. Using AI effectively to do this as a tool, which is uh, quite amazing. We're going to talk about that, but carry on. You wanted to add something? No.

Speaker B: I mean maybe the important thing is that there is a huge population, we call it unbanked people. They don't have access to financial services in a traditional way. More than 1.3 billion uh, people in the world. And these people, they also uh, uh, deserve uh, uh, have access to these uh, financial service credits that they need for their daily life. And what you are right is that the combination of these different data, uh, um that we process through AI, through our algorithms allowed us to create these uh, new profiles like alternative credit bureau that does not exist in those countries. And uh, that's why we say we are the champions of financial inclusion because we are inviting all these people to be part of the system thanks to the technology.

Speaker A: You know, it's, it's, it's a privilege to, to be able to connect the dots with people who have been unbanked. And you're quite right, you know, it runs into hundreds of millions of people. You know, we take it for granted that uh, you know, I mean you and I for example, we've, we've been exposed to you know, um, banking systems that have been around for hundreds of years and we've got the Digital connectivity means etc. Etc. But the reality is are hundreds of millions of people. So for you it must be such a privilege to add such value to people's lives. And you were appointed as the CEO of Optasia just last year. What does it mean to have been chosen for such an important role? And it's really a very transformative role for humankind. I see it as well.

Speaker B: And, and, and eventually, I mean this is why I choose this, this, this role exactly as you said. Because I mean I've been running companies on, I um, mean all my, my m. My professional career but uh, when the opportunity came and was uh, uh, in front of me, it was like something absolutely different because I mean for the first time in my life I could Combine something uh, important, which is the business itself, the purpose of the business with the business itself. Normally everybody talks about purpose, everybody wants to have purpose. But I mean not too many people have the opportunity to combine both good business with uh, the purpose to do something different, good for the community, to create financial inclusion. Uh, that combination is so strong for me. It creates so much energy that uh, was uh, the main reason I decided to lead this project, to lead uh, the business, but not only that, to lead the journey to become a public company, to run an IPO that allowed not only the existing investors but the public and the consumers in general to be able to invest in a project like this uh, through the stock exchange.

Speaker A: But you've had such a very interesting corporate history. I was looking back before you joined Optasia, you've had some, some many senior leadership roles. Uh, you've been at Telefonica for example and I'm sure you've learned many lessons along the way. If you look back through your leadership uh, at all these various organizations that are all well known globally, what are the most important lessons that you personally have learned along the way and that are now guiding you as you said, to this purpose driven role that you have at Optasia?

Speaker B: Well, I think uh, um at the end of the day, uh, everything goes uh, to two to single worlds in my opinion as to single uh two main ideas. One is leadership and the other one is people. Um, everything is about leadership. It's about clarity. It's about having the vision, having the clarity to uh, uh, uh, uh, go to the place that you think you should go. And to go is steady to that uh, uh, uh place. If you know where you go, it's much easier, you have that clarity. It's much easier to convince everybody around that specific idea to create the energy and then to create the momentum uh, towards that specific uh, idea. The second definitely for me it's about people and it's about, I mean having the right people on board, getting the right talent, but also make them working together. Collaboration, it's a big thing and sometimes you have the best starts, the best players. We were talking about football one minute ago but not necessary. When you have good players, but also you make them playing together is when you create magic because this collaboration amplify. So when you combine the right uh, leadership, the right uh, vision with the right team, uh, and the right collaboration, I think the projects uh, go ahead, go forward and um, you create the success that uh, you're looking for.

Speaker A: Wow, that's, that's so Inspiring. And it all starts with that belief, right? And I can, I can hear it in your voice, I can hear it in your energy, the belief in what you do. Now late last year Optasia was listed on the Johannesburg Stock Exchange. Can you talk about the importance of this as part of your journey to drive this financial inclusion on the continent? And why did you choose the Johannesburg Stock Exchange?

Speaker B: Well, I mean first of all, I mean uh, we are an African company even if we operate in also in Asia and Middle East. But at the end, I mean out of the 38, out of the 38 countries, I mean more than half of them are in Africa. This is very important. Second, I mean this is the continent where financial inclusion using alternative technology maybe is the most important one, is the one that has the largest opportunity. Johannesburg and South Africa also. South Africa is a very important market for us do uh, more than 10% of our business in South Africa. And Johannesburg Stock Exchange is the most important exchange across Africa. And I would say, I mean one of the leading stock exchanges definitely uh, uh, um, um, uh, in the world. I mean outside of United States maybe uh, uh, if you look at Europe and um, Africa, I mean they are at par with most of the important stock exchange in uh, uh, the world. Um, so that was the decision, but also the decision to make the company public. It was a big decision as well because I mean it comes with a process that uh first of all need to be successful. And our process was successful at the end. We were uh, on top of the range of the valuation that we were looking for. It was heavily oversubscribed and we uh, had the success of become the largest IPO in Africa and the largest fintech IPO even in uh, Europe and Middle East. But it's always uh, a journey that uh, you need to, until you go to the end you don't know if it's going to be successful or not. In our case it was and also it was important because it shows the way for all the companies, all the fintech, all the tech companies that is possible. It's possible to ipo, it's possible to IPO in Africa, it's possible to IPO in the Johannesburg exchange. I mean uh, Optasia is not only a success in terms of becoming pumic, but it's also a reference alike for a lot of companies that they would love to uh, follow the same route uh, in the future.

Speaker A: Wow. Well listen, congratulations. I mean those are, those are some big milestones that you, you spoke about the uh, in terms of the size of The IPO and the over subscription I've been watching it with great interest so it's absolutely fascinating. So congratulations to you and your team but partnerships, without partnerships you're not able to achieve what you want to achieve. Um, can you talk to us about some of those partnerships that you have built with major South African organization, you know financial service providers, mobile network operators to serve the local market to drive Optasia's vision going forward?

Speaker B: Well definitely not only that I mean we are, we are uh a uh partnership in our DNA. I mean we are a B2B 2X company. We cannot do what we're doing with our partners. Our partners are the most important part of uh all what we're doing of course and the final customer as well. But with them they are the one that allowed us to have what we call the distribution rails. They are the one that allowed us to access to customers they are the one that allowed us to uh, uh access to the data that we use uh with our algorithms and they are the ones that allowed us to use their mechanisms to disperse and collect the loans that we provide. So absolutely critical uh distribution rails for us also the banks because we rent, let me uh use that word we rent their balance sheet because at the end they are the lender on record. It's true that Optasia take the whole risk, we underwrite the whole risk, all the response but we use them uh uh and we use their balance sheet in order to provide uh the loans so. Absolutely right and specifically I mean some of them are coming uh from South Africa you right mentioned we work with uh telecom uh players uh like MTN or like Vodacom. Very, very important for us we use also uh some of the um, um South African bank institutions uh uh First Rank is not only, I mean our partner in some of the countries that we use but it's also our shareholder, it's a very important shareholder. They have more than 25% of the company. Standard bank is a very important partner for us because it's uh the one that is allowing us, I mean to structure our capital market and our financial uh um uh um uh structure to be sure that we are able to scale at the speed that we are um scaling uh and of course outside South Africa uh multiple uh entities uh other um uh telcos, Airtel Orange, uh gas or banks like uba, ecobank. Our access of so many are uh the ones that are working, are working with us in order to make it happen. What we're doing in, in, in in Africa and in the different Countries.

Speaker A: Well, listen, I mean those, those are some big heavyweight partners and they're the right partners to have. You know, when you look at the African continent, you look at their presence across the continent, and there is no question that you, uh, are achieving incredible success so far. I was just looking at your, Your recent earnings and uh, your. Your revenue grew by 76%, which beat your IPO guidance that you put out, uh, when you, when you first launched on the stock exchange. I mean that's. That's extraordinary stuff, you know. What do you believe is the secret to Optavia's continued and impressive growth?

Speaker B: Well, uh, well, first of all, I think there is a. There is a big need there. There is a big need in the market. There is something that is not, uh, totally covered. I mean there are not so many, uh, companies that have been able to combine all the technology, the partnerships and the ecosystems in order to do so. So what we are doing is serving a, ah, latent demand, a real demand that is there. So uh, for us is as fast as we execute, I mean as much demand we will able to cover. So demand is there. Second, technology, of course, I mean the platform, the algorithms, the way that we use the data, we are able to access to more than um, 5,000 different data points and we create features per person, uh, above 100,000 features per person, which means that ah, we reprofile people with all the type of data that are not the normal data that we use. And this is uh, quite unique and quite special. And it's the circuit of what we are um, um, um, ah, doing. Then of course the size. I mean here there is uh, a uh, wheel effect. Uh, as more customers we have, as more data we use, as more we learn, as more we learn, we are more uh, precise and better in the way that we predict, uh, the way that people are going to behave related to credit. And this is a unique thing. Maybe we have also the benefit of the first mover here. And last but not least, I think execution, I mean working with 88 countries, working with uh, 38 different regulatory environments, working with so many, uh, partners, uh, it's a complex thing and executing properly is absolutely critical. Growing at that speed, uh, implies, uh, being very good on the operational side, uh, in order to manage all these uh, huge volumes of partners, ah, data and customers.

Speaker A: Yeah, that regulatory environment, as soon as you mentioned regulatory, know every country has its own rules and that uh, adds more complexity. But I guess that you guys are experts at this so you know exactly where you're going and what you're doing and how you're doing it. And I see as well that you've been very busy over the recent weeks. You know there's um, there's a company called Finergy which you bought for half a billion rand. They do electricity credit. I see that First Rand which you mentioned earlier is your biggest shareholder. They increase their stack and in Octasia by an additional 6% shareholding. I think it was a AH 1.48 million billion billion billion dollars deal. Um this is very very exciting and it's adding tremendous impetus to Optasia. Can we expect more announcements in the coming weeks and months? And why have you decided to purchase the electricity finance uh company Finergy and, and First Rand increasing their stake. Very interesting times. Are there more acquisitions? Is there more shareholding changes coming?

Speaker B: That's something. I mean we're a public company as you can imagine. Um, uh but I mean you just mentioned two of them that are important. Yes, I mean first rank is uh trusting uh us a lot. They start I mean their investment uh with 20% of the company as you said they increase uh to 26 and that means that they really trust on what we are doing, they like what we're doing. And I think at one point of time we can try to amplify or hold them um uh with the technology in some of the markets that they are operating. And this is what we are doing in the case of uh Pinergy this ah is a long term bet that we have. We see um, the same way that of Asia because we have not talked about that started 12 years ago with uh airtime credit ah solutions providing time credit to the people that were uh lagging behind uh um um uh credit in their mobile phones. And that was the beginning of the company. Although today uh is this is only 25% of what we're doing. But uh, we believe that the uh prepaid um electricity market it will need also advanced electricity for people that they don't have the cash at that point of time. And that's why we bought uh this company. Finergy is uh unique in this specific world. They have uh unique patents allowing us to uh deeply integrate with exchange of the utility companies. And we saw that as another source of growth uh in the future a big need in the market. And also we see uh um uh a lot of complementary with what we're doing, big synergies. So uh this um acquisition I believe it will uh come with a lot of uh uh uh growth and success uh in the coming years uh in most of the countries that we are ah, operating today.

Speaker A: Fascinating stuff. When you look back at your life and when you look back at uh, your career, Salvador, uh, you. You've had a very successful and a very busy career and I'm sure you've learned from many challenges that you've come across the way. If you had to go back in time to your, the start of your professional career, is there any advice that you'd give yourself today that said, well maybe I should change that. And where I'm going with this is what advice do you give young people today in the, in the. In an era of AI where there's a lot of uncertainty and I don't know. Do you see AI as a challenge for young growing business people today? What is your advice to yourself if you had to go back and what's your advice to young people in an era filled with AI?

Speaker B: Well first of all I see AI as uh, a big opportunity some people see as a threat. I do not see that. I say that it's going to amplify and accelerate all what we're doing, uh in an order of magnitude. It's a big transformation. Maybe it's the biggest step that we have had ever. Uh in terms of the impact in a period of time. Not in terms of impact is that the impact is going to happen in a short period of time but it's going to be boost productivity, is going to boost, I mean the capabilities of people and I think it's going to allow us to do things that we do not even imagine today. But um, I'm um, fully optimistic on the evolution of that. And I think people that are young people today that they have ah, burned with this technology, uh uh um. They were um. Burning with these uh uh uh uh um. Technology. They will, they will be able to use that uh uh in a way that amplify their capabilities. But uh, uh, talking about your own people and advices, um, and advise them, uh, and also thinking about the time that I begin uh, working. Um, what I think it's important. Um uh. Three things are very important for me. Uh um uh. One is the ambition. I believe, uh uh. Everybody needs to keep the ambition of learning all the time to be at ah, speed on all what happens, uh to understand that. I mean it's always a learning process and that ambition to be learning every single time. It's critical. Some people believe that they finished the university and now there is another step. No, no, you continue learning and you will continue learning all your life. I realized that it's Very important to be bold. I realize that it's very important to take the opportunities that come. It doesn't matter from where, uh, those opportunities are coming from. If the opportunities are coming outside your country, you need to go outside. You need to go to, uh, places that you would never imagine. But, uh, the opportunities there do it. Be bold. Try to, uh, expose yourself to new, uh, things. Don't try to stay on your own, uh, uh, comfort zone. Try to be out of your comfort zone because that will always come with an uh, opportunity that you cannot, uh, even imagine. And at least this is my, um, uh, experience and uh, maybe the last one that I believe it's important or at least it was important for me. People need to be patient. Uh, and normally when you are young, you are not patient and you think that, that life goes and you lose trains and you lose opportunities. And it's not the case. I think, uh, um, being patient, if you combine the ambition to learn being bold and take opportunities and be patient, things will come to you and you will be able to demonstrate the value that you have, uh, inside. At least this is what, uh, has happened in my career and this is what I can share with the people that want to listen to me.

Speaker A: That's fantastic advice. Thank you very much for that. I guess that when you, when you are, you know, you need to balance life and, and it's also important to switch off and take time off. Um, you know, we all got families and you know, we've got children and partners and all these kind of things. So it's important to balance that aspect of life as well. How do you balance your life? Being so busy at Optavia, looking at your executive roles that you've had in the past. Is it important? Do you manage to switch off, or can you just not switch off and be able to multifunction in different environments? What's, what's relaxation mean to you, Salvador?

Speaker B: I like that expression multifactor. Different environments. I like it and I think exactly is what it is. I never switch off, but I always switch off as well. I'm able to switch on and switch off very quickly, unable to handle and to change, uh, quite fast. Uh, the different environments, including the one that create relaxed to me. So, um, people know that I'm 24 times 7, uh, um, uh, available. But that don't mean that I'm not enjoying, uh, life. And this switch on and switch off and I've been able to change the environment is one of m. My uh, specific capabilities that allow me to uh, uh, enjoy Life at the same time enjoying what I'm doing because I'm enjoying a lot what I'm doing. This is the other thing I'm enjoying also what I'm doing what I'm doing. I'm enjoying working. I enjoy running uh, companies or running Optasia. But of course I mean also I um, have a lot of hobbies. I uh, like uh, reading. Um, I'm a sportman, I'm m a golf player. Um, I like sailing. Um, I travel a lot. I like to be with my family, with my friends. Uh. So yes, I think uh, it's about uh, combining uh, all the time what I'm doing rather than uh. I'm not the type of person that say I will do that when I retire. No, I'm doing it right now because I mean life is short and I believe you need to, while you are running you need to enjoy what you are doing, uh, uh, including the relationships and including being with your friends and your family.

Speaker A: Fantastic. My final question to you. Is there uh, one person or perhaps a book or something that you read that's been your biggest influence in your life? Is it a family figure? Is it a book that you read growing up? What's been the biggest influence in your life that has taken Salvador, uh, Anglala to where he is today?

Speaker B: Well, there are a lot of books uh, and ideas that has happened. But I mean someone has influenced a lot in my life is my father. I would say my father, uh, he just passed away already three years ago and he has a long life. He life until 98, long and healthy life. But uh, he was a big inspiration for me. A lot of conversations with him. He was a successful uh, businessman but he was a great human being, uh, quite ah, cultivated an amazing conversation and uh, he always gave me fantastic advices in my life and also allowed me to participate of his success since I was young. At home he was very vocal, very open. He always shared uh, and allowed me to, to understand a lot of the things that I'm doing uh, from the very beginning. So I have a big, I mean I was very close to him and I, I really, really out of a lot of people that I admire and I'm listening is the person that uh, was uh, has had uh, uh the biggest influence on, on my life.

Speaker A: Absolutely beautiful. Uh, Salvador Anglada, it's been an absolute pleasure and honor talking to you Chief executive Officer at Optasia. I thank you for your time sir, very much.

Speaker B: Thank you very much. Aki. It was a pleasure to talk with you this morning. Thank you. Gracias. Thank you. Gracias. Gracias.