Even though Country X is a secular state, it is predominantly an Islamic country. The country is a member of the Organization for Islamic Conference (OIC), which partly owned the Islamic Development Bank (IDB) (http://www.isdb.org). For a very long time, multinational banks like Standard Chartered Bank and some other regional banks practicing conventional banking dominated the banking industry. They had established clientele and resources to tackle any new entrant to the market. The founders of AFAIB were not discouraged by the that market situation, but carefully adopted a better strategy to enter what seemed to be a saturated market. One major strategy to gain entry into new market was to change the rules of the game. One of the reasons why Netscape was able to compete with Microsoft could be attributed to this approach. Netscape did not play the game in the usual way; it changed the terrain and moved the competition to a level ground where the huge customer base and resources of Microsoft could not easily provide a competitive advantage (Cusumano & Yoffie, 1998). AFAIB used a similar strategy to enter the banking industry in Country X. AFAIB understood the religious beliefs of the people of Country X, and introduced another form of banking that would not be based on interest but on profit, as recommended in the Holy Quran, in which many of the people of Country X believe. Thus, in 1996, Islamic Development Bank, Saudi Arabia, Social Security and Housing Finance of Country X, Country X National Insurance Company, and several private individuals in Country X and one other African country came together to found a bank called the African Arab Islamic Bank.
The bank commenced operations in January 1997 to carry on banking business in all its departments and branches in accordance with Islamic (Sharia) principles and practices with a view to making a profit for its shareholders and depositors and to contributing to the socio-economic development of Country X. Apart from accepting deposits from customers and providing products and services traditionally rendered by conventional banks, AFAIB grants financing facilities for short-, medium-, and long-term economically and financially viable undertakings. The bank is, thus, mandated to carry on both commercial and development banking activities and, at the same time, trade in commodities. In addition, the bank assists the disadvantaged people of the community.
AFAIB is divided into five major departments: operations, finance & administration, investment, treasury & foreign exchange, and monitoring & recoveries (Appendix A). Each department has distinct functions, but the activities of all departments are coordinated towards the attainment of the bank's corporate objectives; i.e., to carry on Islamic banking business in all its departments and branches in accordance with Islamic principles, with the view to making profits and contributing to the economic and social advancement of Country X. The bank's services are opened to all individuals regardless of their religion. The bank performs investment management functions based on "Mudarabah Contract," which is a profit-sharing contract between two parties. The first party (investor) provides funds and the other party (manager) provides professional services. The profit is shared between the two parties based on a predetermined, agreed to ratio. Islamic principles do not allow dealing in interest (usury) basis. Interest is understood to mean a predetermined return on cash lent out. The bank invests funds using investment windows consistent with Islamic principles. In addition, the bank provides customer services that are normally offered by conventional banks, such as letters of credit, letters of guarantee, current account, trading in currencies, etc. (see Gerrard & Cunningham, 1997, for more detail on Islamic banking products).
The board of directors of AFAIB consisted of the representatives of IDB and other local directors. The management team was comprised of Ahmed Barde (managing director), Khaled Al-Sayer (expatriate finance manager), Jeremy Bongo (operation manager), and Shehu Abdulahi (investment manager). Kuranga Yusuf later joined as the counterpart finance manager. Apart from Shehu who does not have conventional banking experience, all other members of management team had worked in a bank before in different capacities. AFAIB has, from the beginning, understood that its expertise is in Islamic banking and decided to outsource other related services like information technology. AFAIB knew the importance of IT in business and especially in banking, which require a huge data processing and information management. AFAIB directly acquired the basic hardware with the assistance of the contacts of Khaled in the Middle East, and eventually contracted the development of the banking software and acquisitions of other necessary software and hardware to a local company called Technology Associates Ltd. (TA).
In spite of the political instability and economic downturn that followed the military takeover of the government in Country X in July 1994, Usman Garba and his colleagues still went ahead to start the company they had planned. From inception, Technology Associates (TA) set out to become a leader in information technology, committed to excellence and providing appropriate technology and solutions to meet the business needs. With their own personal resources, contributions, and loans from family as business angels, Garba and his colleagues started TA. They realized that it was becoming increasingly necessary that original software packages be developed locally for optimum computer and business applications. They also realized that it was right time to have a local company to provide adequate support for the local business, which was definitely missing as at the time of TA's incorporation. Foreign-owned companies dominated the IT industry, focusing on marketing off-the-shelf packages and using expatriates to provide support and services. TA was primarily structured into three functional departments: Research and software development (R&D), technical services and communications, and training and support services (Appendix B) and managed by Musa Abass, Sheikh Bwari, and Vicky Alabama, respectively.
A major strength of TA is the ownership and management structure. Apart from Alhaji Shettima Jalo, an uncle to one of the directors, all the remaining directors of TA also work as managers in the departments mentioned above; thus there is reduction in decision-making levels. Most decisions can be made during a management meeting or at a short impromptu directors' meeting. Unlike many start-up companies, TA was not under any pressure to make a profit and was able to concentrate on building a solid customer base and, as such, began to be trusted by the local business community. Education and training of the management was other strength of TA. Since there was no university in Country X, the management team all trained abroad in Computer Science. Despite the option to remain abroad with higher pay and huge demand, all chose to return home to work for local companies, after which they started their own company, TA. There was also a close friendship and even family ties between the directors, which has a strategic importance in business survival in Africa (Lawrie in Odedra, Lawrie, Bennett & Goodman, 1993). They all speak a common local language and five other foreign languages: Chinese, French, Arabic, Russian, and English (the official language in Country X).
In 1996, there were about 20 permanent staff working at TA. The business development and growth was not easy, especially convincing local businesses to develop software to support their services. Many do not yet understand the advantages in using software to support business processes, even though they use computers for other purposes like word processing and keep basic spreadsheets. Few that have seen the need are comfortable with the off-the-shelf foreign packages, which they often acquire directly when they travel abroad or through friends and families. The majority of the international organizations usually rely on their expatriate-IT manager and already have contact with existing foreign-owned IT companies. Thus, in the early years, TA was almost developing free software in order to convince the business community of its use and the company's capabilities. During these early years, TA became involved in the development of taxation software for the Tax Department of the Ministry of Finance and Economic Development, with the supervision of a consultant from Harvard University. This paved way for the development of a billing system for the National Utilities Company (NUC) at a time when it was in serious crisis.
After the military takeover of the government in 1994, there was disagreement between the French company running the NUC and the new government. In a nutshell, the French company switched off the billing system that was being partly controlled from France and all the expatriate staff that could help also left the country. TA was able to use this crisis to convince the local businesses of the need to look inwardly and locally for a mission-critical system. TA brought out the effect of over-dependency on foreign-developed applications. Other units of TA also performed excellently in discharging their professional duties and soon won the confidence of the local businesses. When the local area network of the United Nation Development Program's (UNDP) national office was struck down by lightning, TA was able to restore it within a reasonable time and provided technical support for numerous businesses. Today, the majority of users in Country X were trained at the TA education center, where corporate and individual training is provided at affordable prices.
Getting competent staff is a general problem in sub-Saharan Africa (Odedra et al., 1993; Moyo, 1996), and Country X is not an exception. The demand for well-trained experts in information technology is greater than the supply. Despite this, TA ensured that it recruited the best IT personnel available in the market and provided many incentives to retain them. They also hire and train locals with high potential to learn new skills and eventually employ them in different positions. When required, TA recruits experts from other countries in sub-Saharan Africa. Among the staff from another country is Joseph Cardozo, a programmer who later played a major role in the product developments at TA.