Home ›› 18 Sep 2022 ›› Business Connect
Four decades ago, the headmaster of Khilgaon Government High School in Dhaka summoned a ninth grader to the teachers’ lounge. Pointing at him, he told his colleagues, “This boy is extraordinary and a genius. He will be someone important one day. Please take care of him.”
The teacher, who also taught math at the school, saw his prediction come true when the boy ranked among the top 20 students nationwide in the Secondary School Certificate (SSC) examination in 1982.
That boy is Dr Shahadat Khan, now the founder and CEO of TallyKhata — a digital payment platform with wallet and credit capabilities for small and micro businesses in Bangladesh that offers bookkeeping solutions to record daily business transactions.
After showing exemplary academic achievements, he worked as a faculty in the Bangladesh University of Engineering and Technology (BUET) before securing a Commonwealth scholarship and completing his Master’s and PhD in Canada.
In 1998, Dr Khan joined a software company named Eyeball Networks in Canada. In the 12 years he worked there, he recruited many Bangladeshi engineers at the company and was promoted to chief technology officer (CTO).
Later in 2007, the software expert returned home with the dream of doing something exceptional in Bangladesh and founded the financial services platform SureCash.
In 2020, he launched TallyKhata with an aim to impact the lives and economy of millions with state-of-the-art financial technology, or fintech.
Early life
Born in Bikrampur in 1967, Shahadat Khan was the sixth child among eight siblings. The family moved to Dhaka’s Khilgaon in 1972.
“My father worked in Bangladesh T&T [the telecom sector]. We lost him when I was in the eighth grade. Since then, my mother was my inspiration all the way. She guided us with our education and helped us think simple but aim big,” said Shahadat.
Talking to The Business Post, he remembered that day from his school life when the headmaster summoned him to the teachers’ lounge. “That incident has been a great source of inspiration for me throughout my life, even today.”
“I also spent a good time at Dhaka College. But after the HSC exams, I was not sure whether I wanted to study medicine. But I knew that math was my favourite subject. So I sat for admission tests both for BUET and medical.
“I got selected both at BUET and Dhaka Medical College, but chose BUET because I loved math and was weak at memorising,” he said.
“I got admitted into the Electrical and Electronic Engineering (EEE) Department in 1984. I am glad I made that decision because EEE was a lot of fun and easy for me due to my knack for math,” he reminisced. “After graduating in 1991, I became a faculty member in the newly opened Computer Science and Engineering Department at BUET.”
Study and career in Canada
While working at BUET, Shahadat bagged the Commonwealth scholarship in 1992 and went to Canada where he did his Master’s and PhD at the University of Victoria.
“My academic focus was multimedia via the internet and quality of multimedia services. After completing my PhD, I joined the university as a teacher and taught artificial intelligence there,” he said.
“Meanwhile, I also got an offer to work at Eyeball Networks as the director of engineering in 1998. Later on, I became the CTO of the company. Eyeball has provided its software services to at least 20 countries and companies like Fujifilm, Intel, Samsung, etc.
“I also visited more than 15 countries in Europe, Asia and America, and gave keynote speeches at various events and lectures at many universities during that time,” he said.
While working as the CTO, at the end of 2006, Shahadat wanted to open a branch of Eyeball in Bangladesh. In 2007, he managed to start a research and development centre here.
Homecoming
“In 2006, Eyeball secured a big project from Fujifilm of Japan with a short deadline. I told my boss that I won’t be able to hire the required number of people and complete the project within that short time in Vancouver but I could do that in Dhaka.
“I convinced him after telling him that there were a great number of talented people in Bangladesh and I know teachers in BUET and top engineers,” Shahadat said.
“Very soon, I came to Bangladesh and requested my favourite professor Dr Mohammad Kaykobad to help me find 10 engineers within 72 hours of my arrival in Dhaka. He sent some of his students to me and I managed to recruit eight people. We built a very strong team quickly.”
“We worked tirelessly for six months and delivered a high-quality product to Fujifilm. It was a great experience that gave me the confidence that we can build good software locally,” he said.
He added, “Soon after, I figured out that if these engineers can do this type of work for international clients, they will be able to do the same for the people of Bangladesh as well.”
Enter SureCash
After returning to Bangladesh, Shahadat looked for opportunities to introduce different types of technological innovations here.
“Around 2008, we saw that mobile phones were becoming widely popular in Bangladesh and they were used only for voice calls. It occurred to me that we can also enable people to use these phones for financial transactions and digital wallets, and this should be popular because we had a large unbanked population having phones. That gave the birth of the idea for SureCash,” he said.
“We started pitching our idea to different banks. At the time, there was no such service available in the country.
“We built SureCash as a digital payment solution in 2014 and launched mobile banking with First Security Islami Bank Limited (FSIBL) in 2015,” Shahadat said.
In 2017, SureCash successfully made the country’s largest digital payment disbursements, where primary school stipends were disbursed to more than 10 million families in a single program.
It has also digitalised Bangladesh Sugar and Food Industries Corporation’s sugarcane collection process and farmer payments and the payment of more than 1,000 educational institutions nationwide.
The mobile banking software, built by Bangladeshi engineers, set a precedent by handling a massive number of transactions without any trouble. “We were evaluated in World Bank articles and Harvard publications, which made us popular and gave us confidence. General people also accepted us,” he said.
“Since then, we have worked with five banks with SureCash. The entire system was interoperable,” he added.
Currently, users can make and receive government payments, pay school-college fees and utility bills, pay for goods and services, and make person-to-person transfers through SureCash.
“I started SureCash from my family home at Khilgaon in 2010. A couple of months later, I rented an office in Mohakhali DOHS and hired two people. Apart from them, we only had a driver at SureCash, which later started operating under Progoti Systems Limited (PSL),” he said.
Shahadat said their operations expanded significantly every year since SureCash’s inception. “Starting with three employees in 2010, we have grown significantly and deployed a bigger team nationwide. We also have rented a bigger office at Banani.”
“We are not directly involved in the operational works of SureCash anymore but we provide software services or solutions whenever needed through a sister company,” he said.
PSL currently has 130 employees who work on TallyKhata and TallyPay, he added.
Introducing TallyKhata
While working with several banks, Shahadat at one point realised that SureCash’s operation was not scaling as well as it could.
Banks want to run things at their speed, and the mobile financial service (MFS) providers in Bangladesh are providing services to the end-users.
But no one was working with small businesses, and that made him think about doing something tech-based for them. He also saw a good opportunity when Bangladesh Bank started issuing new payment service provider (PSP) licences.
At the time, Shahadat frequently visited his school friends in the Khilgaon area. During one such meet in 2018, he and his friends were talking about the country’s culture of buying and selling products on credit.
“At one point, I saw three receipts in my friend’s hand. Being curious, I checked them and to my surprise, found that the grocer made a copy mistake and would lose Tk 700 just for that!” he said.
“We realised that small shop owners like him are not good at keeping such records. They might make mistakes or forget to write them down and ultimately, they incur losses. A huge number of small shopkeepers are running their businesses this way across the country.
“Since most of them have smartphones, this problem can be easily solved now. That is how bookkeeping app TallyKhata was born,” Shahadat said.
He continued, “Before we brought out the first version of TallyKhata, we talked to the micro, small and medium enterprises because we needed to know all the problems they face and come up with feasible solutions.
“Later, we developed a 2.0 version with some features that significantly boosted the number of the app’s users.”
He explained, “First, shopkeepers enlist the customers’ mobile numbers in the app. When customers buy goods on credit, shopkeepers enter the amount of money that is owed into the digital ledger (both offline and online) and an SMS is instantly sent to the customer’s phone with records of the outstanding debt and the latest purchase information.”
The sky is the limit
TallyKhata is an easy-to-use free app for keeping all kinds of business records and digital payments that runs without the Internet. It is the most popular business app of its kind in Bangladesh, with over 5 million downloads, as per Google Play ranking.
Launched in July 2020 amid the Covid-19 pandemic, TallyKhata has become the fastest growing platform with 4.5 million registered users and over 1 million transactions recorded every day across the country.
Being a fintech, in May this year, TallyKhata was selected for the Visa Accelerator Programme 2022 in the Asia Pacific as the first company from Bangladesh to make this elite cohort. This year five companies have been selected from more than 200 fintech competitors in the region, and other selected companies are from New Zealand, Japan, Singapore and India.
TallyKhata has also successfully piloted with several banks for digital lending to small businesses. “We provide loan services to TallyKhata users through banks. We collect digital loan applications, build digital profiles and digital credit scores for the businesses, and then forward them to banks for loan processing,” said Shahadat.
“We have built a digital lending portal for banks where they can check the shop profile and creditworthiness online before making decisions. We have piloted this project and are now planning to scale it up,” he added.
There are more than 10 million small businesses around the country and over 60 per cent of them do not get any loans. If they get loans, they will be able to expand their businesses and employ more people, he added.
Shahadat, who is also the CEO of parent company PSL, said they also launched TallyPay in May this year after receiving the PSP license from the central bank.
“In TallyPay, we designed a digital payment service specifically for small businesses. Using this digital wallet service, merchants can receive payments from customers and pay their suppliers. Users can transfer money from and to their bank accounts. The app also has the send money, mobile recharge, and utility bill payment features,” he said.
He said TallyPay is going through a soft launch now and they are planning to formally introduce the app on a larger scale very soon after some additional features are incorporated.
Hopes for the industry
Shahadat told The Business Post that the digital financial services and fintech industry have great prospects in Bangladesh.
“We have done well in the last 10 years. I am highly optimistic that fintech will expand the reach and improve the quality of financial services nationwide, especially in the underserved sectors,” he said.
He continued, “Mobile banking is clearly making great strides. Soon, Bangladesh Bank’s Interoperable Digital Transaction Platform (IDTP) — Binimoy — will be available, using which anyone will be able to transfer money in real-time from any account or wallet of one platform to any account or wallet of another platform.”
“Once operational, Binimoy is expected to revolutionize the payment and financial services in Bangladesh similar to what UPI (Unified Payments Interface) has done in India,” he added.
“After payments, we need to leverage fintech to expand other important financial services such as credit, insurance and board-based financial inclusion. Digital technologies will especially be able to extend access to credit to micro and small entrepreneurs using digital KYC and cash flow data,” said Shahadat.
