On the sidelines of the Business Forum held earlier this year at the American University in Cairo (AUC), investor Christopher Schroeder spoke exclusively to Business Forward on what is needed to encourage a more entrepreneurial environment in the Middle East and on the promise of financial technology (fintech) in revolutionizing business and the lives of consumers. Schroeder is a former tech entrepreneur and is currently a venture capitalist who specializes in emerging markets with a particular focus on the Middle East.
How important are bankruptcy laws to encouraging entrepreneurship?
The rule of law is very important in any entrepreneurial ecosystem. This can be across an entire spectrum of the ability of people to create product. In the end, businesses will fail so bankruptcy laws are relevant and important, certainly to investors, but I have yet to meet an entrepreneur who ever said to me “I am not going to start something because of bankruptcy laws.” The rule of law is important. Those laws are helpful to encourage capital, to [the] want to invest, but at the end of the day, entrepreneurs will come anyway and it is our job to help them in any way we can.
What are the main barriers to entry for aspiring entrepreneurs in the MENA region in your opinion?
Everyone should be an entrepreneur. This is tech or any kind of entrepreneur overall. That is the first mindset and first decision I think entrepreneurs have to make. Secondly, the rule of law and the ability for people to grow and succeed can be a barrier sometimes for entrepreneurs but again I think they usually just simply want to solve their problems and get it fixed overall. In many respects the goal is to do everything we can to take friction out of any ecosystem that keeps entrepreneurs from growing and focusing on serving their customers better and building large companies that will not only be successful but will also create jobs and have other multiplier effects in the economy.
What sectors in the MENA region hold the most promise for aspiring entrepreneurs?
The areas of need in the Middle East and Egypt from an entrepreneurial perspective is defined by the entrepreneurs themselves. When she or he sees something that they have to solve, they want to make that kind of impact, there lies an opportunity to at least begin. On top of that, there are some amazing things that are having multiplier effects not only in the Middle East but across rising markets.
One of the areas I find so encouraging is in the area of fintech, of the ability for people to transact in ways that they were not able to do more safely and more easily. The ability to do payments. The ability to get credit in ways that never could happen before. It becomes a revolution because in a way it unleashes tens of millions of new consumers who can be more successful and allows entrepreneurs to reach and transact more sufficiently and safely with those customers that build very successful businesses.
Everybody wins in this. Governments benefit because at the end of the day, people are part of financial inclusion and are part of the economy in ways that we could not have imagined even a few years ago. Of course, entrepreneurs and investors can do very well because of the size and scale of the impact that can be created.