Chris Yip  0:02  
Welcome to Tell Me More: Coffee with Chris Yip, the official podcast of the Faculty of Applied Science & Engineering at the University of Toronto. Each month, I sit down with someone from our vibrant global community to talk about what places them at the heart of designing bold solutions for a better world. You'll meet alumni, students and professors who are making a difference across a range of fields, including some where you may not expect to find them.

My guest today is alumnus, Mina Shahid, who is joining us from Nairobi, Kenya. Both during and after his time in our Department of Mechanical & Industrial Engineering, Mina was heavily involved in Engineers Without Border, an experience that led to a successful career in international development. Today he is the co-founder and CEO of Numida, which offers digital financial services to micro and small businesses in East Africa, including working capital financing and savings. Mina, welcome to the podcast.

Mina Shahid  0:24  
Thank you so much for having me.

Chris Yip  0:35  
Yeah, this is great. I'm gonna, this is gonna be a fun conversation. So just, just to set the time scale here, MIE, 2005 to 2010, right?

Mina Shahid  1:14  
Yeah. So it was 0T9+PEY.

Chris Yip  1:17  
0T9+PEY. Quick question, where did, where did you do your PEY, do you remember?

Mina Shahid  1:22  
So I had an interesting experience. So I split up my PEY between spending four months in Zambia with Engineers Without Borders. That was the beginning of my PEY, so essentially finished my third year of Mechanical Engineering, immediately like a week after exams finished, I was in a village in rural Zambia working with Engineers Without Borders, and I did that for four months, and then I came back and I joined an engineering consulting company called Smith +Andersen Consulting and it was the contrast of the two experiences was dramatic. You know, to go from very rural, very poor place, really, in western Zambia, living in a village, working with small scale farmers, trying to understand kind of the systems that are keeping these people poor. A week later, wearing a suit, going to this consulting company, you know, dealing with whatever, millions of dollars in terms of project value and so on. It was a, it was a very hard transition for me, personally, to have those two very extreme ends of the spectrum and a very unique kind of PEY experience. I don't think many people got that type of experience.

Chris Yip  2:42  
International development is...we're seeing more and more students are actually getting into this sort of interest in this particular sector, kind of EWB and groups like that are start really gaining prominence and becoming a huge opportunity and driver for people that come into engineering. Was that first and foremost in your mind when you came into engineering. Or was it like, oh, actually, you know, I want to go work with Smith + Andersen for the rest of my life.

Mina Shahid  3:06  
Yeah, no, it was the furthest thing from my mind when I went to engineering, I think. So my father is an engineer, my sister is an engineer, I'm Egyptian, you know, in the Egyptian culture, you're only allowed to do a certain number of jobs. One of them is, one of them is engineering, obviously. The other is medicine, law, you know, pharmacy, whatever, maybe, well, all the children of immigrants will understand what I'm talking about. But, yeah, I never, I never even knew anything about international development or global poverty issues or issues of social injustice or inequality. And when I entered engineering, it was very much I, you know, came in, I thought I was going to do mechanical engineering, I thought I was going to go work in the automotive sector, you know, I was very interested in cars and engines and so on and so forth and that first year of engineering was a big time wake up, [laughs] wake up call to me. Eye opening experience that year of 2005 so it wasn't clear to me and even entering my second year of university, of my second year of engineering, I didn't even know about Engineers Without Borders, it was very much, you know, serendipitous, random thing, like, I don't know, I probably think I saw like a poster on a wall somewhere in the Bahen building, and went to an event at the beginning of the year and at that event, there was a guy named Hans Hesse, who was a student a couple of years ahead of me, who had went and volunteered with Engineers Without Borders and was sharing his experience, and that was kind of my first interaction with EWB, and my first interaction with international development, and this entire sector, like space type of work. And, you know, really starting to see that engineering could actually lead to something that's very untraditional. You know, in terms of, you just wouldn't think about a mechanical engineer doing this type of work.

Speaker 1  3:06  
What you said was one of the things I tell undergrads a lot, especially first years, when I meet them. I tell students flat out, you know, you're going to go through classes, it's going to be fun. Classes are always fun. But I said, what's going to make your experience in U of T Engineering, or engineering in general fun while you're here is going to be the co-curricular stuff, like EWB, like the clubs, like the design teams, and they're like, "well, how do I get involved?" And I'm like, easy, wander around and drop into things like you just said, right? I saw a poster, I took a left instead of a right when I walked into a building and I went into the wrong seminar rooms, there was someone had pizza, I don't know whatever it was or something. And I tell students like, that's what it is, right? That's what will trip you, trigger you into something which is going to become your passion while you're here. Be sure to take those opportunities. So Numida, when you created that, there were two other co-founders, right?

Mina Shahid  6:06  
Correct, yeah, also engineers. We actually, we met through Engineers Without Borders. So they were both students at Waterloo and our arch, our arch nemesis. But yeah, we met in two thousand probably seven, and our paths very much, just followed each other. We all ended up finishing university and working full time for Engineers Without Borders in West Africa, and just stayed in touch and stayed connected and our lives just kind of continued to move in a very similar direction. And in 2016 when we were launching the company, I was very, very specific about who I wanted to bring in to the business as co founders and went and spoke to Ben and Catherine. Ben was living in San Francisco at the time, working in the tech space as a software engineer, and Catherine was actually working for the World Bank. So she had finished her engineering degree, she had worked abroad, she then went back to the Harvard Kennedy School and did a master's in Public Policy and International Development, and then ended up at the World Bank. And so I knew that these were the two people that I wanted to build this company with and launch the company with and we would have never met, if not for Engineers Without Borders and for the extracurricular aspect of our education and just, you know, spending that time together in West Africa, working and understanding kind of the key problems that we wanted to solve, and building a passion around creating opportunities for people who didn't have them. So it was, yeah, again, another example of just like that. You know, so many things kind of just came out of that random decision to show up to that introductory, you know, lecture session with EWB in my second year of university that have dramatically changed my life in many, many ways.

Chris Yip  8:09  
Was it the pivotal moment for your undergrad? Were there other things in undergrad that are memorable, that you can share?

Mina Shahid  8:14  
I think it was definitely the pivotal moment. I think for me, what it really allowed was the ability to think about the engineering degree in a new way, and to understand that, you know, engineering, ultimately, like from a foundation, is a degree in problem solving, and that, you know, there are some problems that have been worked on for centuries that engineers continue to work on and there are some problems that actually need engineers that don't necessarily have them. And I think global poverty, social inequality, social injustice, was definitely one of those things for me, and I saw this as a very large, complex problem, and that that my engineering education very much became about, how do I build the skills necessary to solve these complex problems and to solve problems that will take a lifetime to solve, right and, and I think that's one of the the big differences between maybe going and, you know, working at Smith + Andersen on HVAC designs for commercial buildings, versus working in this very complex intersection of globalization, economics, social issues, culture and trying to understand like well, how do you actually have an impact and create things that can transform people's lives. And, you know, right now, I'm the CEO of Numida, and it's a technology company, and, you know, we have a lot of engineers who work for us. I personally don't do much engineering in the traditional sense anymore. Yeah, but, you know, our work is just so, so complex because of the type of problem we're trying to solve and  engineering, the hardcore technical engineering part of it is only one part. There's a lot of other things required to actually put something into the world that is going to help people live a better life. And the other thing about EWB, which I thought was, in hindsight, it was, it was very unique at the time, was that we had a lot of people in the club who were not engineers. So it was very much a multi disciplinary gathering of people. We had people who were studying finance, we had people studying business, we had people studying international development, political science, economics, and we had engineers. And so it was, it was an introduction, in a way, to the world. And I think when you're a student in engineering, and you're spending all your days in the lab, and you're studying and you're doing problem sets and so on, you know, you're very much surrounded by people who are exactly like you. And what was interesting about this experience was that I got to interact with a lot of people who were very different than me, and that was very eye opening as well.

Chris Yip  11:08  
Numida itself is, is a micro finance company, right? And so for our listeners, could you give it a context of what is micro finance and the strategies behind it?

Mina Shahid  11:20  
Yeah, micro finances, it's a very large sector actually.

Chris Yip  11:27  
The micro [laughs].

Mina Shahid  11:28  
I don't know the exact number, but we're talking, obviously, like hundreds of billions of dollars across the world, and pretty much it's taken the concepts of lending primarily, and finance in general, and minimizing them to work in contexts where economies are smaller, where people may have less financial literacy and may just need less money. So essentially, you know, in Canada, you have commercial banks who you know, might provide $100,000 working capital loan to a small business in Canada to invest in their inventory or their shop or their marketing or their team, and in Sub-Saharan Africa, you know, you would do that analogous thing, but just on a smaller scale. So instead of giving a business $100,000 it might give them $1,000 and because of kind of like purchasing power parity and just the amount of money required in a developing community, that $1,000 actually can be very, very impactful. You know, if the average income of somebody in in Uganda is $200 a month. You know, you can do the math and scale the amount of credit required accordingly. And so for Numida we, our primary product is working capital financing for micro and small business owners. We provide credit of anywhere from $250 up to $5,000 and this credit is primarily given to mom and pop shops. You know, owner operated businesses. You know, maybe they have up to three employees, and they're selling everything from clothing to cosmetics to electronics to, you know, even vehicles, spare parts, hardware supplies, but they are the engine of the economy. You know, they're contributing more than a third of the GDP of Africa. These small mom and pop shops. They're employing the majority of people, actually, you know, there's one statistic from the from the IFC, that they create four out of five new jobs across the continent. And so, you know, if you're thinking about economic growth and you're thinking about prosperity and creating jobs, you have to be investing in this part of the economy. There's only ever going to be a handful of very large companies in any nation, and when you think even about Canada, where are most people employed? Where are most people deriving their income? It's from small and medium sized enterprises. And so that's where we focus our efforts. And we're really, we're really trying to build, you know, the first financial services app that unleashes the full potential of these small business owners. Working capital is one of their needs but you know, their other needs include savings, their other needs include payments, their other needs include financial management, and we're working on a long term solution to provide all of those needs. And to date, we've invested about $100 million across 90,000 of these businesses within Uganda and Kenya, with plans to launch pilots in Tanzania and Rwanda in 2025 and then to expand West Africa after that. So it's been a journey. It's obviously taken us a long time to reach that level of scale, and it hasn't been hasn't been easy. At all. But what we've seen throughout the years is that the need is only becoming greater as economies are growing, as more young people are starting businesses. And so, you know, we feel like we're on to something, but it's, yeah, very, very difficult and very, you know, very different compared to, I think, running a similar type of business in Canada or the US.

Yeah, it's, it's interesting because, as you talked about, like in Canada, you know, particular thing, small business loans. It's the scale, the amount of money required to get things going. But then you think about the rural economies, even in Toronto, even in Canada, right? Or Ontario, somebody needs, there's a lot of a cash economy of people getting and getting stuff done, but at the same time, there isn't easy for them to get finance from Royal Bank or whoever. So I think there probably is a market or an opportunity for microfinance, even in developed countries, right?

100% and there's actually we've been approached before by potential partners who work in Aboriginal communities in northern Canada, who have said, "Hey, your your solution will work here. We need something like this. We need some sort of like alternative, non bank, financial institution who can come in and serve us." So I believe it for sure.

Chris Yip  16:19  
It's going to spin back. I had heard about microfinance, I think the Gates Foundation supported some of the stuff early on as well. What's interesting, as you were talking about this, because you said, well, you know, we built an app to do this, is that the technology has actually made this doable, right?

Mina Shahid  16:37  
I think it's a very good point. I think that is one of the biggest differences between micro finance today versus micro finance, you know, 30 years ago, when Muhammad Yunus, you know, came up with the idea. Digital technology is enabling us to do things that even 10 years ago, people would have said is impossible. So we don't visit our clients. People download our app. They, you know, follow our process. We don't have physical branches like you know, in Canada, you have bank branches, and you walk into a bank and you talk to a banker. We don't have any of that. We interact directly through the mobile app. We disperse money electronically. It's not to a bank account, because our clients are not banked. It's to what's called a mobile money account, which is it's a mobile wallet attached to somebody's phone number, and that's outside of the banking sector. And so these pieces of key infrastructure have allowed us, in a way, to leapfrog what traditional banking has typically required in order to do this type of work. Obviously, we have given out more than 550,000 loans in the past six years. So we have a wealth of data that allows us to build machine learning models to identify credit worthiness and make, you know, good decisions when it comes to risk. And that is all technology. I mean, we have, you know, we have data scientists on our team, and we have data engineers and who are building these models to allow us to serve this customer segment that traditional banks just refuse to serve like they they don't see how they can make money, they don't see how they can assess risk efficiently. They're still stuck in kind of like the traditional well, we need to have a bank branch, and we have paperwork, and you have to come in and sit down with a credit officer who's going to ask through a million questions and on and so forth. We do everything through the mobile app and and we've built our credit models in a way that use other forms of data that you know, traditional financial institutions can't use.

Chris Yip  18:45  
So, so you connected with Y Combinator, right, early on?

Mina Shahid  18:48  
We did YC in 2022, and we were the first company from Uganda to ever get into YC. We're the only, we're the only company in Uganda to get into YC still. Yeah, it was, it was a very interesting experience for us. Obviously, like at that time, 2022 YC was really scaling quite a bit and accepting companies from all over the world. I think during our batch, there were 25 companies from Africa, which was the most of any batch in terms of Africa investments. So it was, it was a fascinating experience for us, obviously, being like kind of in the epicenter of Silicon Valley and that whole world, listening to really successful entrepreneurs from Stripe, Airbnb, etc, and then seeing people from India, from Latin America, from Bangladesh, from Pakistan, from the Middle East. You know, there is a commonality, I think, between entrepreneurs who are building products and solutions in emerging markets. And it just really opened my eye to the fact that, like, Oh, I think if Numida works in East Africa, Numida would work in Latin America, Numida would work in India, Numida would work in in Bangladesh and and so on. And so, yeah, it was for us, a very good experience. I think we got what we wanted out of it, which was we really saw and believed in what we had built and what we had achieved in Uganda at the time, and we wanted to raise a significant amount of capital to be able to scale that. And we knew that, you know, a lot of that money existed in Silicon Valley, and investors at that time were particularly interested in Africa and the potential for emerging market technology and we were quite lucky in that respect. We raised quite a bit of money after YC and and it's allowed us to kind of be where we are today.

Chris Yip  20:38  
I think it, I think what's, what's compelling here is, really, is the leveraging potential of this, right? It's not like you're trying to build a new electric vehicle, right? You're, you're, actually, it's, there's a massive social impact, right? Because you're, you're enabling people to create business, you're enabling, you know, arguably, a greater economic impact on a country. I was thinking as you were talking about, sort of Africa emerging markets and technology. We have a number of our alums that are entrepreneurs in Africa, Reeddi, which is in Nigeria, right? The power capsule Olubenga runs, massively impactful there in terms of providing power, right? Power solutions for different places. And I think this is really an example of how people are seeing our engineering students are seeing the value proposition of taking technologies and really enabling people in different sectors, right?

Mina Shahid  21:30  
What I always say to people is like, when you go to an emerging market like Uganda or Kenya or, you know, Tanzania, Nigeria, wherever it may be, every problem is a big problem, and you're, you're gonna, like, spend your time trying to solve really large problems, like, how do you solve this problem of financial inclusion? How do you solve this problem of investing in the foundation of the economy in an efficient way that results in growth? Whereas, I think in North America, we've or the West, Western markets, you know, Western Europe, North America, we've gotten to the point where the problems we are solving, it's micro optimization. How do you take something from, you know, 99.99999% to 99.999999% efficient. And it's just a very different type of problem that you end up solving.

Chris Yip  22:25  
Do you, do you see the focus really being sort of East Africa, West like staying in the continent now, because you've been talking about sort of Tanzania and other areas there. Or are you, like you did mention South South Africa, South America? Sorry.

Mina Shahid  22:40  
Yeah. You know, I think one of the fundamental infrastructural challenges in Africa is that there's 54 countries, and everyone is different. And you know, what's nice about, for example, Europe is you launch a company in Madrid, you're part of the EU. You can turn it on, you can flip a switch and turn it on in Portugal, you can turn it on in Italy and so on in Greece and whatever. Africa is hard, because you have to start effectively from scratch in every single country. And so I think like in that regard, you know, scaling, the scaling model, is quite different from Europe or North America, and it requires you to take a very focused approach. So for us, it's like we want to do East Africa first, then we go to West Africa, then Southern Africa, and then maybe we jump over to Latin America, or maybe we go to Asia, or whatever it may be. But I think a lot of those things are longer term plays that will require certain types of strategic investments or partnerships. But I do believe, because I lived in Colombia as well for a year in between my Africa stints, I do believe that, and I have a lot of Colombian friends and, you know, other entrepreneurs in Latin America, you know, we've been told numerous times like this company will succeed in Latin so it's, I think it is just a matter of time for us and resourcing. But, yeah, we we definitely see Numida being a global business. We've always said that, you know, we're building a Pan African business. We're not building a Ugandan business or a Kenyan business or a Tanzanian business. We're building a Pan African business because we do see that the problem we are solving and the customer segment we are serving exists in every single African country.

Chris Yip  24:28  
As you were sort of describing that, sort of the EU con, even the Canadian context. Oh, this works in Ontario, this will work in BC type thing, because you've got maybe more commonality that way, right? But in Africa, it's almost like a new international model. As I go to each country, I have to relearn the cultural differences in those countries, or make this work, like if you went to South Africa, be very different than if you're in Uganda.

Mina Shahid  24:51  
Yeah exactly very diverse. You have very different culture between Uganda and Kenya. You have different language even you know you're talking about Egypt and Nigeria. Obviously extremely different. South Africa, Ghana, very, very different. So, you know, Africa is, is a very large place with a massive potential, but it's also very disaggregated. It's diverse, like it requires. Every time you go to a new place, it is like, just so different. And I think one of the misconceptions with people who have never traveled to the continent is that they just think all of Africa is the same. And you know, it's very once you come you realize, oh, whoa, whoa. Tanzania is so different from Kenya. Kenya is so different from Ghana. Ghana is so different from Zambia. And you know, that adds a certain again, when we think about problem solving, you start thinking about, well, from day one, if you want to build a Pan African business, what do you have to do? What foundation do you have to create such that it can work across these different cultures, these different geographies, these different regulatory environments, and so that's another kind of wrinkle to the whole problem that you're trying to solve.

Chris Yip  25:57  
It's been. It's been, I mean, it's just a fascinating story, right? I didn't understand microfinance. I had heard a little bit about it. I now see how technology has enabled all of this to roll out. What's your next big idea? I mean, Numida is running really well. Do you have the next step?

Mina Shahid  26:17  
Yeah, it's a good question. I think for now, my focus is Numida. It's it's hard for me to think about the next step. I think, you know, the longer you play in the game, like I think for me now that I've been in this kind of financial inclusion, financial services space for the past eight years, I just like see again, just so many problems that are keeping people poor. Like to be very direct and you know, right now we have particular focus on this customer segment of small business owners and and providing financial services for them that really allow them to achieve their dreams. Like the the mission of the company is to build digital financial services that enable 1 million small business owners across Africa to achieve their dreams, and so we're very far away from that goal, and we believe that there's beyond working capital. There's so many other things that are required. We're going to launch this savings product next year in partnership with Africa's largest bank, and we're starting that in Uganda, so our customers able to save and invest their capital and hopefully grow their money and provide for their families from their small businesses. But, yeah, I have some ideas. I'll keep them in my mind for now. I don't want to share them prematurely, but I think we're very, very focused on just achieving this mission and continuing to scale both the products we offer our customers and the impact we're creating for them, and then where we're creating that impact, from Uganda to Kenya to Tanzania to Rwanda and so on.

Chris Yip  27:55  
That's awesome. I'm going to congratulate you on all the success I've been I've been skulking around on LinkedIn. I see that you're posting for positions for machine learning engineers and stuff like that so clearly, you're, you're scaling rapidly. I'll put a pitch in that you need to post on our PEY portal so that you could pull in some more students from here to be interns for you guys.

Mina Shahid  28:17  
That is a great idea. That is definitely that is something I'll pick you up on next year, for sure.

Chris Yip  28:22  
I'll put you in touch. Yeah, 1400 undergrads all set ready to go. But no, I think I actually, I think there's a massive opportunity there. Anyways, this has been, this has been an awesome conversation. I really, really, really appreciate this ton of fun. Thank you so much.

Mina Shahid  28:37  
Thank you so much. I really appreciate and thanks a lot for having me on.

Chris Yip  28:42  
Thanks again for listening to Tell Me More: Coffee with Chris Yip. If you want to catch up on past episodes and to make sure you don't miss the next one, please subscribe. We're on Apple Podcasts, Spotify and more, just look for Coffee with Chris Yip. You can also check out @uoftengineering on Facebook, Instagram, X and LinkedIn for more stories about how our community is building a better world. And finally, if you'd be inspired to join us, we'd love to welcome you. If you're thinking of taking a degree or working with us on our research projects, you can find us online at engineering.utoronto.ca or you can visit our beautiful campus in Toronto, Ontario, Canada. I hope I can join you for coffee soon.