When Naif AbuSaida, the founder of Saudi Arabia-based FinTech Hakbah, first came up with the idea for a social savings app, his aim was to modernise one of the world’s oldest saving methods and strengthen financial inclusion in the kingdom.
But it took a health crisis to spur him into action, forcing him to take a step back and evaluate his legacy – not only to his family, but also to society.
“In 2017, I got diagnosed with colon cancer, stage three, but I recovered,” the former banker says.
“When you have to cancel all your life, you evaluate everything and two things I was thinking about is what will I leave for my family and what is my legacy? What is the impact I had in the community, or society?”
“So during the chemotherapy, I decided to start a FinTech company.”
Social savings is an informal “money pool”, in which family, friends and colleagues contribute regularly to a collective fund that allows them to take turns to borrow what has been saved by the group.
The funds are typically used for anything from paying rent to bills and school fees or even financing a small business.
Perhaps one of the most famous people to have used a family savings circle to fund their business is Berry Gordy, the founder of Motown Records.
Mr Gordy borrowed $800 from his family's savings group in 1959 – and went on to sell the label in 1988 for $61 million.
The global acceleration of FinTech and digital payment solutions since the start of the Covid-19 pandemic has unlocked new financial opportunities for millions of people who previously did not have access to bank accounts, the World Bank said in its Global Findex 2021 report.
About 22 per cent of the GCC's population is unbanked, compared with 60 per cent in North Africa, according to a report by consultancy Strategy&.
Up to 79 per cent of young adults in the Mena region are unbanked and 72 per cent of the poorest citizens can benefit from financial inclusion, the Arab Monetary Fund said in a report.
Watch: Arab Youth Survey: the key results
Meanwhile, economic headwinds including high global inflation, the cost of living crisis and rising interest rates have made it more difficult for people to save consistently.
Increasing household savings in Saudi Arabia, the Arab world’s biggest economy, is a key priority under the kingdom’s Vision 2030 plan, which aims to diversify the economy away from hydrocarbons.
Saudi Arabia also launched the Financial Sector Development Programme (FSDP) as part of its Vision 2030 plan to help diversify the country’s financial sector and boost household savings.
While investment is recognised as a goal of economic policy as it improves productivity and increases the competitiveness of an economy, savings form the core of capital formation that fuels economic development, consultancy KPMG says in its Analysis of Household Savings in Saudi Arabia report.
“Nations that take conscious initiatives to encourage and nurture formal savings are more likely to witness higher levels of sustainable economic growth, human development and living standards,” KPMG adds.
“Introducing policy initiatives, driven by behavioural characteristics of households, increasing [Saudi Arabia’s] financial literacy to boost savings, enabling easy access to financial products and services by emphasising financial inclusion, and increasing the frequency of data published on household savings are some of the areas that can be focused upon to improve the country’s household savings rate.”
Up to 70 per cent ofpeople in Saudi Arabia do not have an emergency savings fund, while the household savings rate averages about 1.6 per cent, according to Mr AbuSaida.
“They know it is important but they cannot [save]. It will not change unless you make saving easier,” Mr AbuSaida says.
“This is what we did at Hakbah; we did it in a very simple but smart way by digitalising the habit of savings.”
Naif AbuSaida, founder of Saudi Arabia-based savings platform Hakbah, initially bootstrapped his start-up. Photo: Hakbah
Founded in 2018 and launched in 2020, Hakbah has grown into one of the fastest-growing start-ups in the region, Mr AbuSaida says.
It now has more than 120,000 registered users representing a range of nationalities, including Saudis, Burmese, Thai, Afghan and Pakistanis, among others, he adds.
More than 3,300 savings groups, called Jamiya, have been created on the platform, while it has helped 18,000 of its customers to save more than $35 million combined, Mr AbuSaida says.
When users sign up to the platform, they create their own Jamiya and invite trusted family and friends to join the savings group, which includes the amount of money they aim to save.
The app is only available to citizens and residents of Saudi Arabia.
Hakbah is permitted by the Saudi Central Bank to test its services under the Regulatory Sandbox environment, while it graduated from the Dubai International Financial Centre FinTech Hive Accelerator Programme in 2019.
Initially bootstrapped by Mr AbuSaida, Hakbah in April closed a $2 million pre-Series A funding round led by Dubai-based venture capital company Global Ventures and Aditum Investment Management, which is based in the Dubai International Finance Centre.
Since Mr AbuSaida founded the company five years ago, it has raised a total of $3.7 million.
The proceeds will be used to accelerate Hakbah’s presence in Saudi Arabia, improve the user journey and enhance its savings engine algorithm, he says.
Hakbah will play a key role in supporting this goal by widening its savings offering and partnerships for employees, gig-workers, students, housewives, and many others
Naif AbuSaida, founder of Hakbah
“Savings are an important pillar of the Financial Sector Development Programme and increasing them is a key focus for Saudi Vision 2030,” Mr AbuSaida said in April after the company received its first injection of institutional capital.
“Hakbah will play a key role in supporting this goal by widening its savings offering and partnerships for employees, gig-workers, students, housewives, and many others.”
The powerful combination of Hakbah’s exceptional user experience, sophisticated back-end technology and partnerships with leading regional brands will empower millions of users to meet their savings goals, Lachlan Hughes, head of Venture Capital at Aditum Investment Management, said in April.
“We are thrilled to partner with Hakbah in their mission to drive financial inclusion and promote savings in the Gulf region,” Mr Huges said.
“We are impressed with Naif's vision and leadership and look forward to supporting Hakbah as they continue to scale and make a meaningful impact in the region.”
Hakbah’s business model was originally based on a $6 monthly subscription fee, but Mr AbuSaida says this has changed to a one-off charge for users to join the platform.
“We changed it for one reason: psychologically, when people pay every month to save, they feel they are losing money,” he says.
Mr AbuSaida plans to continue focusing on Saudi Arabia and is “not obsessed” with expanding to other countries within the GCC in the near future.
“I graduated from the FinTech Hive Accelerator Programme and the GCC was in the business plan for 2025-2026, but Saudi is still the biggest market,” he says.
“Unless something changes, we have agility … and our savings engine allows us to connect with any financial institution and bank in Saudi or outside, but I'm not obsessed to expand.”
Q&A with Naif AbuSaida, founder and chief executive of Hakbah
What other successful start-up do you wish you had started?
A few come to mind, including Chime, a US banking app, Revolut and Plaid, which allows apps to connect with their customer's bank accounts.
Who is your role model?
I admire several businessmen and pioneers like Chris Britt, the founder and chief executive of Chime, David Velez, who founded Nubank, Zach Perret, co-founder of Plaid, and Anne Boden, the founder of the UK's Starling Bank.
What new skills have you learnt since launching your business?
Since launching Hakbah in 2018, I have learnt a couple of new skills, namely resilience and how to remain super focused.
Where do you want to be in five years?
Solving another challenge for the good of society.
If you could do it all differently, what would you change?
One of our challenges has been finding the right talent for Hakbah. That said, I wish we'd selected the team faster and also moved faster on partnerships.
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020
Saturday's results
West Ham 2-3 Tottenham
Arsenal 2-2 Southampton
Bournemouth 1-2 Wolves
Brighton 0-2 Leicester City
Crystal Palace 1-2 Liverpool
Everton 0-2 Norwich City
Watford 0-3 Burnley
Manchester City v Chelsea, 9.30pm
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Sunday:
GP3 race: 12:10pm
Formula 2 race: 1:35pm
Formula 1 race: 5:10pm
Performance: Guns N' Roses
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
