Woman holds dollars and phone in her hands. Online money transfer.
Woman holds cash and mobile phone. Photo illsutration.

Emerging markets: Four things you need to know before taking the plunge

Test Company Inc.

If you work for a fintech planning to offer services in an emerging market, you’d be wise to take a few steps from DriveWealth’s playbook.

A provider of fractional investing and embedded financing technology, DriveWealth has seen recent success providing services to Latin America, Uganda, Georgia, South Korea, and Kenya, its director of products, sales, and partnerships, John Shammas, explained.

John Shammas headshot
John Shammas

Shammas, who helps DriveWealth’s partners design products for their specific geographies, said there is strong interest across the world from companies in both emerging and mature markets in assisting individuals in investing in the stock market, cryptocurrencies, and other alternative assets. That can be accomplished on DriveWealth’s API stack.

DriveWealth partnered with Hisa, a wealth management platform that makes investing a social activity in Kenya. Hisa also produces media designed to improve users’ financial literacy.

Hisa wanted to help everyday Kenyans invest in Kenyan and American securities. First, they had to remove barriers to investing. With many folks having small amounts to deploy, fractionalization was crucial.

Look for unmet needs in emerging markets

When looking for emerging markets to expand to, DriveWealth looks for those where there are few financial services for the everyday citizen, Shammas said. There is a desire to invest in global markets but not the opportunity. Several countries in Africa fit the bill, he added.

Much of Africa doesn’t get the attention it should, Shammas said. Roughly 40% of sub-Saharan Africa is Internet-connected.

“Many citizens are interacting with global brands much more than they would have a decade ago,” Shammas said.

Throughout the region, there is demand for global assets, especially dollar-denominated ones, allowing investors to diversify their currency exposure, Shammas said.

Look for strong local partner in that emerging market

Many companies make the same mistake when expanding to emerging markets. They take a one-size-fits-all approach and use the same product that worked elsewhere. That is often a fatal mistake.

Hisa has detailed knowledge of the Kenyan market and established distribution channels, Shammas explained. The company owns Kenyan Wallstreet, a media company that provides integrated business and financial content through digital networks.

DriveWealth’s technology enables Hisa’s users to act on the content they receive, Shammas said. Even if they only have a few shillings, they now have the ability if they read about a company and want to invest in it.

Emerging markets are digitally savvy

If you’re headed to sub-Saharan Africa, make sure your offerings are digitally sound because that’s how folks will interact with them. Shammas said much of the continent skipped the entire generation of bricks and mortar banks. For many, their first interaction with financial services was with e-money or on their phones. Those phones made it easy to transact from their device and access other financial services.

“I think it’s moving faster than any other market just in terms of the number of products available to individuals in a number of different countries,” Shammas said. And I think investing is one of those services that every single provider will eventually have to provide to their customers.”

Local partners catch details outsiders miss

While potential customers in emerging markets may be eager, some will need education on what services are available, which ones are right for them, and how they can access them. By partnering with a local source, companies avoid the learning curve of local preferences.

Local knowledge allows you to avoid mistakes outsiders can easily make with something as simple as color, Shammas said. While in North America, we use green to indicate when a stock rises in value and red when it falls, in China, it’s the opposite. Korea uses blue for rising stocks.


A local partner will also know that diversification for small investors is either difficult, scary, or both, Shammas noted. Many countries may have local stock exchanges, but few companies list on them. Seeing thousands of listed companies is a foreign idea that will take preparation and education to address.

DriveWealth’ ‘s success in emerging reasons is propelled by its fractionalization engines, Shammas said. One of the challenges of providing access to the United States is the rising prices of many stocks. If someone has only $30 to invest, they cannot buy a full share and are priced out.

  • Tony Zerucha

    Tony is a long-time contributor in the fintech and alt-fi spaces. A two-time LendIt Journalist of the Year nominee and winner in 2018, Tony has written more than 2,000 original articles on the blockchain, peer-to-peer lending, crowdfunding, and emerging technologies over the past seven years. He has hosted panels at LendIt, the CfPA Summit, and DECENT's Unchained, a blockchain exposition in Hong Kong. Email Tony here.