He started up at 49 and soon made millions. Now he’s investing it all into startups.

By OsmanOsman Husain

Nadeem Hussain, former CEO of Tameer Bank

Nadeem Hussain, former CEO of Tameer Bank
Nadeem Hussain started Tameer Bank, his first startup, in 2005 after working at Citibank for almost three decades.

Nadeem Hussain knows a thing or two about building world-class companies.

He’s arguably one of Pakistan’s most successful entrepreneurs, starting microfinance institution Tameer Bank in the mid-2000s, acquired by Norwegian telecommunications conglomerate Telenor in March.

Tameer itself is regularly cited as a model case for financial inclusion in Pakistan. Since inception, it’s grown to approximately US$220 million in deposits, with a total base of 4.9 million customers. It also helped revolutionize mobile banking with Easypaisa, which allows for things like instant fund transfers and paying online merchants.

At last count, there were over 70,000 merchants across Pakistan subscribed to the Easypaisa network.

Unfamiliar beginnings
Nadeem’s dive into entrepreneurship isn’t your typical story of a young founder making it into the big leagues.

He spent almost three decades working for Citibank, stationed in eight different countries over the course of his career. His last assignment was in Dubai, where he enjoyed a hefty tax-free salary and numerous other perks.

“Normally in people’s lives there comes a time when they ask themselves what they’ve done for their country of birth,” Nadeem says. “I had a desire to come back and give back.”

He roped in four of his former Citibank colleagues.
I’m talking with the entrepreneur in his palatial home in the southern port city of Karachi. It’s a building reminiscent of the British colonial era – tall ceilings, Victorian architecture, with household staff in crisp white uniforms scurrying around.

Nadeem, a tall and well-built man, talks with energy and fervor that belies his advancing age.

Multiple puffs of his cigarette later, he tells me that the decision to come back to Pakistan was predicated on creating an institution which would have a lasting impact, be recognized globally, and create an ecosystem.

“The need for microfinance and other constraints brought me to this sector,” he explains. “The core problems I wanted to solve was the lack of available credit for small businesses and the severely under-banked population.”

Photo credit: Philip Brewer.
Photo credit: Philip Brewer.

In 2014, it was estimated that only nine percent of Pakistan’s 200-million-strong population had access to a bank account. The figure has increased since then but still stands some distance behind the South Asian average of 45.5 percent.

Nadeem says he ploughed US$6 million of his own money as seed capital to help start Tameer Bank. Another US$1 million was invested by the International Finance Corporation, and a chunk by private investors.

“The challenge was to create something from scratch. We had the vision, but articulating it, getting infrastructure together, and building a team were major hurdles,” he recalls.

To build the institution, Nadeem roped in four of his former Citibank colleagues as members of the core team. But he knew they’d have to remain nimble, hungry, and innovative if his lofty dreams were to be realized.

The bureaucratic culture of big banks had to be avoided at all costs.

“It’s rare in life that you get an opportunity to create a culture from scratch. Usually you land up in an organization which already has a way of doing things. We created a very open culture, one where competence trumped loyalty. You couldn’t say I was the boss and that’s it,” he says.

“We created a culture of making decisions very quickly. That stood us pretty well.”

Calculated risks
Tameer’s big break came in 2008 when Telenor acquired a 51 percent stake in the company for US$12 million. Nadeem remained president and CEO with overall management control.

Telenor’s investment came after the central bank introduced new branchless banking regulations to encourage financial inclusion in Pakistan. The idea was to engender something similar to Kenya’s M-PESA, the world’s leading mobile banking system.

However, in Kenya’s case, the mobile payments product was primarily designed and executed by the local telecommunications operator. The central bank in Pakistan wanted it to be created by a bank as it was fearful of losing control over a potentially large volume of transactions.

Photo credit: Moyen Brenn .
Photo credit: Moyen Brenn.

With Telenor’s investment, Tameer went ahead and created Easypaisa in conjunction with the telecommunications firm. Since launch, the branchless banking service has facilitated more than US$4.4 billion in payments.

At the same time, Tameer’s core businesses of small deposits and lending was chugging along nicely.

Nadeem says it was in the 10th year of operations that he started to think about an outright sale.

“Tameer was doing exceptionally well according to all performance metrics. I had always, in my own mind, kept an exit strategy. I started to realize that the bank’s job was not done, but mine was. Now I wanted to do something even bigger,” he reminisces.

After a few months of negotiations, Nadeem and other minority shareholders sold their remaining stake of 49 percent to Telenor. At the time of sale, Tameer was the second-largest provider of microcredit with approximately 13 percent of the entire market.

Nadeem is tight-lipped about how much money he made from the deal, only saying it was “several multiples” of his original investment of US$6 million.

“I’m 60 years old, but I feel I still have a lot more to give. I take consolation from the fact that Warren Buffet created most of his wealth after 70 years of age.”

Bigger challenges
Since selling Tameer, Nadeem is now aiming to catalyze the next wave of tech entrepreneurship in Pakistan.

“In my mind the biggest target market going forward is millennials. There are four million youth coming into the job market every year in Pakistan. There aren’t enough jobs for all of them. One of the answers has to be startups.”

One of the goals is to attract global investors into Pakistan’s burgeoning space.
Nadeem wants to “create an ecosystem” in the nation’s fledgling startup industry, much like what he did with Tameer. Big data, artificial intelligence, and digitalization of services are three things he’ll focus on.

His first endeavor in this regard is the creation of Planet N – a holding group which makes investments in existing companies, houses an accelerator based loosely on the principles of Y Combinator, as well as starts companies on its own.

The accelerator, which launched very recently, has a straightforward approach. For every startup it accepts into the program, it invests US$10,000 in exchange for 20 percent.

Planet N has made investments in ecommerce startup Well, as well as software companies and digital media solutions.

Nadeem says he’s written personal checks of over US$6 million in the past few months alone, making him one of the most active angel investors in the country.

His next step is to create a seed fund of US$10 million, of which he says he already has commitments of US$4 million. The aim is to establish the fund by mid-2017, after which it will invest in startups sprouting all across the country, not only those associated with Planet N.

“Here we’re saying we’ve taken the risk. We’ve gone ahead of everybody. The first skin is ours,” he exhorts.

Nadeem wants to attract global investors into Pakistan’s burgeoning space. He says negotiations are underway with Accion Venture Lab and Omidyar Network, founded by eBay billionaire Pierre Omidyar.

He has advice for the budding entrepreneurs that he might be handing checks to in future.

“The secret to most things in life is resolve. Not overconfidence, resolve,” he stresses.

“In some instances you don’t have a plan B, you just have to make sure plan A happens. It all depends on how serious you are, how much time and energy you’re willing to invest. When you make that clear, most things will fall in place.”

Converted from Pakistani Rupees. Rate: US$1 = PKR 100.

Editing by Steven Millward and Kylee McIntyre
(And yes, we’re serious about ethics and transparency. More information here.)