With the Covid-19 pandemic exposing the financial vulnerabilities of millions of people around the world through job losses, unpaid leave and reduced salaries, responsible money management has never been more crucial than it is today.
The pandemic has been a wake-up call for many who have no financial safety net in place and are now beginning to understand the importance of smart money skills they should have learnt at a young age.
This is where the co-founders of Verity, a Dubai-based FinTech start-up that has an innovators licence from the Dubai International Finance Centre, are hoping to make a difference when they launch their family banking and financial literacy app in the new year.
“Teach your children early what you learnt late” is the motto that Omar Al Sharif, Dina Shoman and Kamal Al-Samarrai adopted when they started developing Verity earlier this year.
Aimed at children aged from eight to 18, the app will be available in Arabic and English, and offers users practical financial literacy learning experiences, as well as providing kids and teenagers with the tools they need to earn, save, give and spend responsibly in a real-life environment.
Through subscription-based family plans, parents can create sub-accounts for their children on the app, which they can monitor and control as primary account holders. Parents will be able to top up accounts, set parameters and spending limits, and establish a reward system that allows children to earn additional funds after completing specific chores and tasks, the co-founders say.
Children will then have a number of options from which to choose from, such as saving money, donating it or spending it by using a personalised prepaid debit card, which can be used both online and in stores. Parents are notified of all transactions, which allows them to monitor and adjust parameters as needed.
The inspiration behind the name “Verity” is derived from the Latin word veritas, which means truth – and this has been an important pillar for the trio to build the app on, says Mr Al Sharif, a former member of the founding team at Oasis500, the pre-seed and seed fund manager and accelerator that has helped to catalyse the development of the Middle East’s start-up ecosystem.
“Truth is transparency … and we wanted to make sure that everything is very transparent in terms of the process, the fees that you pay and so on,” he says
“This is one of the interesting aspects that we want to change in the banking experiences that people face, which is to have everything very transparent, there's nothing hidden and there are no hidden fees.”
The UAE has launched a number of financial literacy programmes over the past three years to tackle the rise of personal debt in the country. In 2019, the Central Bank of the UAE signed an agreement with Emirates Foundation to launch a financial literacy programme through the Esref Sah scheme.
And, in October, the Authority of Social Contribution – Ma’an rolled out the third cohort of its Ghaya financial literacy programme that aims to empower Emiratis with smart money skills to help them contribute to Abu Dhabi’s long-term economic growth.
Meanwhile, a 2019 financial literacy survey by Visa found that 43 per cent of respondents in the UAE aged between 16 and 24 felt they are not ready to manage their own money and 53 per cent said schools did not prepare them enough to take care of their finances.
While there has been much debate about who is responsible for teaching children financial literacy skills, Ms Shoman says it should be based on a combination of factors.
“When you think of something being taught, you think that it's something that should be taught in schools,” Ms Shoman, whose great-grandfather founded the Arab Bank in 1930, says.
“Not all schools are teaching it – and even if they do, they're not doing it in such a comprehensive way. Luckily, there is more interest in the subject matter and more schools are looking into how they can integrate this.
“The other part is that it's another subject that should be taught at home as well with parents. [But] parents either don't know how to approach it … or they feel they're not comfortable enough or confident enough in what they know to be able to translate it into lessons.”
Verity is Ms Shoman’s third financial literacy-focused venture, having previously founded inherQuests, a New York-based start-up that is built on a curriculum that empowers young girls to begin their financial journey, and Nahji, a Jordanian social enterprise that teaches basic financial concepts through a range of resources.
The co-founders initially bootstrapped the company, but last month they closed their first $800,000 pre-seed round that was backed by regional venture capital firms including VentureSouq, Wamda and Beyond Capital, as well as contributions from prominent angel investors.
“While it was difficult and a long journey for us, obviously on a pre-seed round, you don't have a product to show – it's just an idea,” says Mr Al-Samarrai, a former investment banker and HR specialist.
“It was a lot of talking to the right people, explaining the story, explaining our vision. And with any pre-seed funding round, it's believing in not only the idea, but the founders themselves. We managed to raise $800,000 on an idea … and it was a great success for us; one of our greatest achievements today.”
Following the capital raise, Verity's founders launched a waitlist for early subscribers to the app. Their next steps include introducing several other languages and games to the app, as well as launching it around the Mena region.
“There's so many potential customers between the ages of eight to 18 in the Mena region and that for us is our long-term goal: to be in every Mena country as the app of choice for children's financial literacy,” says Mr Al-Samarrai.
Q&A with the co-founders of Verity
What other successful start-up do you wish you had started?
Mr Al-Samarrai: I think Shazam is a brilliant invention, mainly for the convenience factor, but also because it gives you instant access to discovering new music.
Mr Al Sharif: For me, it would be Skillshare, because it encourages you to keep developing your skill set and is such a great way for people to help each other in the sharing economy.
Ms Shoman: I love Kiva because it’s the perfect example of how community-led microfinancing can positively impact the lives of so many globally.
What new skills have you learnt since launching your business?
Mr Al-Samarrai: Delegation has been a big one – it’s a core skill in any industry or company, but even more so in a start-up environment, where a core team is responsible for getting a lot done.
Mr Al Sharif: As a FinTech, we’ve also learnt a lot about the regulatory landscape in the region, from the advantages of various frameworks to the application process, and what we need to be conscious of moving forward.
Ms Shoman: Really understanding the fundamentals of fundraising has been interesting for me, especially in terms of engaging with both VCs and individual investors in the region.
Where do you want to be in five years?
Our ambition in the long-term is for the Verity app to be on the phones of every child and teenager in Mena and for it to be their main source of financial education. So, in five years we would like to have made significant progress in that goal becoming a reality. However, if Covid-19 has taught us anything, it’s that we need to expect (and be prepared for) the unexpected, so our focus today is on building a sustainable business that is flexible and agile enough to overcome any hurdles that may come our way.
If you could do it all differently, what would you change?
We wouldn’t change a thing. We really believe that everything has happened the way it should, and have learnt a lot from the highs and lows.
What is your next big dream for Verity?
With our first funding round closed, we now want to grow our dream team that will take Verity to the next level. Eventually, we would like to be recognised as one of the biggest success stories to come out of the Mena region, and to be the financial literacy partner of choice for major players in the tech and finance space.