Follow The Leader: Karim Awad, Group CEO, EFG Hermes "If you are not flexible enough in a region like this, it will become more difficult to survive."

"You need to always be ready to adapt," states Karim Awad, Group CEO of EFG Hermes, as he gives his take on how one should go about doing business in the MENA region. "The region offers massive opportunities, but it has its challenges of operating here. You need to have a business model that is always adaptive, that understands the circumstances that you're dealing with, and then navigates those circumstances in the best interest of the business. If you are not flexible enough in a region like this, it will become more difficult to survive." Entrepreneurs in the region would be wise to take Awad's words to heart, as he speaks from his years of experience and insights of being at the forefront of EFG Hermes, a premier financial services corporation in frontier emerging markets.

Established in 1984, EFG Hermes started off as a "pure play investment bank," offering solutions for corporate advisory, brokerage, securities, research, private equity, and asset management in Egypt, before expanding into the GCC in the early 2000s. Since then, Awad continues, the company has become one of the leading investment banks in the MENA region, becoming known as a provider of financial services and solutions in Egypt and other frontier emerging markets. In Egypt, Awad notes that EFG Hermes has also added a non-bank financial platform to its portfolio, through which it allows for consumer finance, leasing, factoring, micro-finance, insurance, mortgages and payments. EFG Hermes is also investing in banking businesses in a number of markets, including Pakistan, Bangladesh, Kenya, Nigeria and Vietnam, and since recently, it has been trying to acquire a bank in Egypt as well.

With an operation that's spread over 75 markets in 13 countries, Awad says that it is the investment banking arm of the company that currently generates the biggest profit, while the non-bank financial institutions business is also growing at a fast-paced rate. "In the first quarter of this year, it generated roughly 38% of our bottom-line, up from zero since we started in 2015," Awad notes. He adds that EFG Hermes' core markets are Egypt, Saudi Arabia, Kuwait, and the UAE, which is a matter of pride for him and his team, because they had started out in these countries. "We have the largest share on Dubai Financial Market," he declares, as he starts listing a few of the company's key accomplishments in the recent past. "We have the second largest market share on Abu Dhabi Securities Exchange. We have the largest market share in Kuwait. We are among the top foreign brokers in Saudi Arabia. We're doing a lot of initial public offerings (IPOs) across the region, including Kuwait, Oman, Saudi Arabia, UAE, and Egypt."

Source: EFG Hermes

Awad also points toward the development of Tanmeyah, the micro-finance business in the EFG Hermes portfolio, as a new project that the company considers as a key win for itself. "It's a business that we bought in Egypt in 2016, and we have grown it immensely," he explains. "It plays a very important role in increasing financial inclusion in the country by providing financing for micro-enterprises and small enterprises in the country." Another of EFG Hermes' success stories is its consumer finance company, valU. Launched in 2018, this fintech mobile application developed by EFG Hermes operates as a buy-now-pay-later platform that allows users to make purchases from a wide network of merchants in Egypt, and then pay for them in a series of agreed-upon installments.

Since its inception, valU has financed total gross merchandise value (GMV) exceeding US$140.5 million, with its monthly GMV having crossed $10 million. As the first business of its kind in the country, valU has seen more than 90,000 clients sign up for it, which also serves to explain why it was awarded the "Best Buy Now Pay Later Platform" title at Entrepreneur Middle East's Leaders in Fintech Awards 2021. For the many accomplishments that EFG Hermes can claim to its name today, Awad boils the reason for all of them to one single factor: it's because the company has the best people working for it. "I have been lucky, because I've been surrounded by some very, very good people as a team," Awad says.

"We have grown up together in this company, and we operate very closely, with a lot of synergies between us… I think having the right team is key to a company's success, and that means giving them the proper delegation to run with the different businesses. And then, making sure that they have enough latitude and the authority to execute the overall strategy of the firm is something that is important for our business to continue to thrive." That said, one cannot deny Awad's role in stewarding the EFG Hermes brand to its success in today's market. Interestingly enough, he's been with EFG Hermes for 22 years, having joined the company straight out of university. "I started in the corporate advisory side of the business, and I have been the Group CEO of the company since November 2013," he notes.

Given his track record at EFG Hermes, it's safe to expect Awad to have a good perspective on the opportunities that are available in the MENA business landscape today- entrepreneurs, this is where you need to take notes for yourselves. "We definitely like fintech a lot," Awad says. "Of course, we're definitely biased towards that, given our consumer finance business valU is a fintech solution at the end of the day, but we do see a lot of other opportunities in fintech. We're seeing that in companies in Egypt, one of which we took public two years ago, and it is now a $2.5 billion company. We're also seeing a lot of interest in payments solutions, as well as buy now pay later models. We're seeing a lot of them spring across the region, and we expect to see it even more. In general, we believe that entrepreneurs should also try to operate in areas that are not overcrowded, where they can bring in a novel proposition, they can add a lot of value, they can create a niche in the market, or even just create a new market. After all, these are all important factors for the growth and stability of their businesses going forward."

And for those wondering when would it be opportune to start a business in the region, Awad suggests that there's no time like the present. "I think it is a very good time to start a business in the Middle East," he concludes. "I think we're seeing a lot of regulatory changes, a lot of openness from the different regulators, to allow disruption to take place, and help young entrepreneurs. And it's not just in the financial sector, it's across all industries- you can see a number of opportunities that are springing up. At the end of the day, it's all about finding your niche and knowing what you can operate well, and then simply going ahead."

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THE EXECUTIVE SUMMARY: KARIM AWAD'S TIPS FOR ENTREPRENEURS

1. KEEP AN OPEN MIND "Listen, always listen. Sometimes you can fall into the pitfall of thinking that you know everything, and that is never a good thing. You have to always listen to the team, and listen to their different perspectives."

2. LEADERSHIP DOESN'T MEAN RUNNING A ONE-PERSON SHOW "At the end of the day, you might have the burden of taking the final decision, but involving all the stakeholders in the decisions, making sure that everyone is on the same page, and that you're all moving in the same direction is key for the organization to continue to do well."

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