He emptied entire life savings into Singapore startup to help people with no bank account

SINGAPORE — During a long road trip in a remote part of southern India in 2015, Mr Ram Sharma and his friend found themselves travelling about 100km — about two-and-a-half times the entire length of Pan-Island Expressway — to the next nearest town just to withdraw some cash from an ATM before resuming their journey. 

“It struck me, why do ATMs remain here (in this town)? After this, there are villages where there are people living but there are no ATMs. Why should it be like that?” said the 50-year-old Singapore permanent resident.

It was a huge contrast to the situation in Singapore, he said, where the large number of banks and ATMs meant that the public could “enjoy these facilities as everyday conveniences”.

Contemplating upon this privilege led Mr Sharma and the friend, Mr Ragu Nandhan, to set up and incorporate Bank-Genie a year later.

Headquartered in Singapore, the fintech startup develops digital solutions that, among other things, enable banks to overcome prohibitive costs to set up physical branches in remote locations and reach otherwise inaccessible communities.

So committed was Mr Sharma to his mission to reach unbanked populations — those without a basic bank account — that he poured his entire life’s savings and “mortgaged everything else”, except the roof over his family’s head, to raise over a million dollars to fund the company.

“Today I can laugh at it, but at that stage I still remember my wife telling me, ‘Do we really have to do all this? You're going to bring us into trouble’,” said Mr Sharma with a slight chuckle to TODAY over a Zoom interview recently.

“If this company had gone down, it means that I would have also gone down.”

Fortunately for Mr Sharma, his wager on Bank-Genie seems to be paying off. With more than 40 staff globally, the Singapore-headquartered startup chalked up a revenue of US$3.1 million (S$4.3 million) for the financial year ending March 2022, up from US$840,000 the previous financial year. 

Mr Sharma said that Bank-Genie is “on track to be EBITDA positive this year”, referring to earnings before interest, taxes, depreciation and amortisation — a common indicator of a company’s overall financial performance.

MAKE BANKING CHEAPER FOR BANKS

Mr Sharma himself is a seasoned hand in the industry, having worked in Centurion Bank in India and Bank Albilad in Saudi Arabia, as well as Temenos, a company specialising in enterprise software for banks and financial services.

By the time he started Bank-Genie, he was already a serial entrepreneur who had started and sold two consultancy firms, one of which was to a Nasdaq-listed company.

Hence, he was more than familiar with how costs can be a factor prohibiting banks from serving remote locations, resulting in an unbanked population of 1.7 billion globally.

Citing a KPMG report, Mr Sharma said that a bank would typically take five years to recoup the costs of establishing and running a small physical branch.

“It's not that the banks are bad people. It does not make business sense for them to open there,” he said, referring to far-flung places, especially those inhabited by small communities.

To tackle this, Bank-Genie offers solutions that allow a bank to open branches and provide a suite of financial services with just “a tablet and a small Bluetooth printer and the card reader”.

“Nothing more than that, and this will cost you around US$150 to start a branch,” he said.

Such was the affordability of Bank-Genie’s solution that Sierra Leone Commercial Bank, one of the largest commercial banks in the West African nation, was able to set up 600 branches in 90 days, including in remote areas — “somewhere up the mountains, somewhere in the valleys”, he said.

“Anything you can think of, all the retail services which we can get when we walk into an OCBC, UOB, DBS or POSB branch can be obtained in these branches,” he said, illustrating the range of services offered despite each Genie branch operating from shipping containers.

SOCIAL COST OF BEING UNBANKED

Mr Sharma said the benefit for a community having access to bank facilities goes beyond cutting down physical distance.

The lack of accessibility to banking facilities can make remote populations more predisposed to financial precarity.

“Because you don't have a credit history for them, the bank cannot give loans, so what people do instead is they go and take a loan from a loan shop or a moneylender, which means that they pay very high interest,” he explained.

“Which means that they are already poor people, yet the poor get poorer,” he said, calling the entire situation a “sad predicament”.

He gave an example of the smaller islands surrounding Cebu, the Philippines, where the problem had existed for the longest time. 

Due to difficulties in securing loans from banks as a result of non-existent credit scores, the locals end up borrowing from moneylenders at exorbitant interest rates of up to 5 per cent per day, he said.

REGULATORY AND PANDEMIC CHALLENGES

In 2017, Bank-Genie managed to secure an undisclosed amount in a Series A funding from a fund backed by two key institutional investors: SBI Holdings Group, a Japan-based conglomerate that was spun-out of Softbank, and the Dutch development bank FMO.

In terms of footprint, the startup has acquired more than 30 client banks and financial institutions across Africa and Southeast Asia, with 13 banks in the Philippines alone.

Scaling up its solutions took considerable effort, said Mr Sharma, as the product built and installed for one bank cannot be replicated in another.

For each new territory Bank-Genie expanded into, it had to contend with different sets of rules and regulations as well.

“Each country has its own requirements. There are statutory requirements, there are compliance things which need to be met,” he said.

“Some countries have regulations like customer data cannot reside outside the country due to privacy, so on and so forth. So banking is an animal which needs to suit each country differently.”

To manage this challenge, the firm worked closely from the onset with the central bank of each new country it stepped foot into.

Bank-Genie also has presence in Central Asian countries like Kyrgyzstan, Uzbekistan as well as Kazakhstan, where Mr Sharma almost got stranded in around two years ago when borders started closing in short notice due to the Covid-19 pandemic.

Mr Sharma said that while the coronavirus had scuppered some of Bank-Genie’s expansion plans, it also presented opportunities.

For example, the growing need to practise social distancing had helped popularise the startup’s Genie Q solution, which enables bank branches to take appointments, manage crowds and divert customers to less crowded branches where necessary.

Looking ahead, while digital banking and cashless payments continue to proliferate in urban and more advanced markets, Mr Sharma said that there is much work left for him in remote geographies.

“Our vision was always to bring a bank to every doorstep and democratise financial services so that financial services are accessible to all the population in the world,” he said.

“I'm sure Bank-Genie still has a role to play, be it small or big we don't care, but we want to play a role in bringing the unbanked to banking.”