Farida Bedwei is the co-founder and chief technology officer (CTO) of Logiciel, a Ghanaian fintech company that develops banking systems for the microfinance industry and technology solutions which promote financial inclusion for the unbanked. Bedwei and her co-founder, Derrick Dankyi, CEO of Logiciel, answered our questions.

1. Tell us about one of the toughest situations you’ve found yourself in as a business owner.

Our technology partners had a glitch in their system which had a massive negative impact on our infrastructure. Since we didn’t anticipate such a situation happening, we didn’t have any safeguards or recovery plans in place to mitigate the situation. This affected 40% of our clients and caused us to have a downturn of 30% in our yearly gross revenue. Our reputation was affected, we lost some clients and couldn’t meet our sales targets.

Due to the nature of our business we had to engage the industry’s regulator and other stakeholders and inform them about the incident since it prevented the affected clients from meeting their regulatory obligations. It took the majority of the affected clients about three to four months to recover and normalise their operations, and we rendered our services for free during this period.

We had to work extended hours and train client-facing staff extensively on how to handle hostile clients. We switched technology partners and put in measures to ensure we could fully recover within a 12-hour period, should an incident like this recur.

2. Which business achievement are you most proud of?

The ability to build a core banking platform to digitalise the operations of the institutions which bank/lend to the informal sectors.

With over 250 institutions – made up of microfinance institutions, microcredit institutions, credit unions and micro-savings institutions known as “Susu collectors” – we are the leading core banking platform used by this sector. We did it with 90% of our staff learning and gaining technical and industry knowledge on the job.

3. Describe your greatest weakness as an entrepreneur.

Empathy: towards both our clients and our staff. This has sometimes made it a bit difficult making some decisions which would impact either our clients or staff negatively, sometimes to the detriment of the business.

Since these institutions are helping deprived communities, we feel compelled to assist them in any way we can. A typical example would be undercharging for services because a client needs it but can’t afford the going price. We have had to hire managers with no-nonsense attitudes who can be firm when dealing with clients and staff.

4. Which popular entrepreneurial advice do you disagree with?

Mentorship is integral to one’s success as an entrepreneur. We have had difficulty – individually and collectively – finding mentors who we can relate with. Over the years we’ve both had short-lived mentors due to lack of understanding of our business model and inability to schedule regular catch-ups with mentors due to time constraints.

We have made many mistakes along the way and while the advice of a mentor may have deterred us from a few, we’d still have ended up largely along the same path because of the instability and lack of expert knowledge in the industry combining technology and informal banking.

 5. Is there anything you wish you knew about entrepreneurship before you got started?

Greater insight into the informal banking industry would have been helpful. This industry has been fluid for a long time and it’s only within the past 10 years regulations and standards have come into play.

We have had to learn about the industry while developing for it. If we’d had expert knowledge beforehand we’d have been able to accomplish a lot more in the past six years we’ve been in business.

6. Name a business opportunity you would still like to pursue.

There’s an untapped market when it comes to lending to the informal sector. People in this sector need microloans for capital top-up, emergency situations, etc. However, banks are unwilling to lend to them because they do not have a regular income and collateral.

Analyses have shown that most of the traders in this sector who have access to microloans, almost always pay back their loans in full if the interest rates are reasonable, especially the women. With more than 60% of the population in the informal sector in sub-Saharan Africa, there’s a huge opportunity for the provision of microloans with low interest rates.

‘The journey so far’ series is edited by Wilhelmina Maboja, with copy editing by Xolisa Phillip, and content production by Justin Probyn and Nelly Murungi.