Nala, a UK based mobile money transfer targeting Africans worldwide, could be planning its debut in Rwanda in coming days.
Doing Business understands that Fin-tech, which was founded by a Tanzanian entrepreneur has been conducting tests in Rwanda. The fin-tech runs a mobile money application that allows users to make transactions without an internet connection.
NALA co-founder Benjamin Fernandes last week announced on social media that they had run their first successful test in Rwanda.
The firm supports transfers between The UK and US to countries including Tanzania, Uganda, Kenya and Ghana. The ongoing tests could see Rwanda become their next market.
The firm is seeking to tap into the growing remittances and international payments market by creating a money transfer platform that uses USSD technology, it is not dependent on internet availability. This is in direct response to the cost of mobile data in some parts of the continent Africa.
The interest by the firm comes at a time when Rwanda’s fin-tech sector has been expanding with a number of firms such as SAVE, a platform by Exuus Ltd which facilitates saving groups through an open and user-friendly saving groups ledger handling.
Another fin-tech, Uplus Mutual Partners (U+) allows people from all walks of life to connect on the platform to contribute and save for whatever causes they may be involved in.
Last year, Chipper Cash, a Jeff Bezos funded Fin-tech company that facilitates cross border payment and cash transfers debuted in Rwanda.
MTN Rwanda also in 2021 set up its FinTech subsidiary, Mobile Money Rwanda Ltd, in a move that is likely to intensify competition in the financial system.
Doing Business also gathers that a number of international players have since made formal applications for licenses to debut the local market.
Remittance inflows to Rwanda for 2021 were estimated at around $246 million after a drop to $241 million in 2020 as a result of the Covid-19 pandemic, the latest World Bank’s migration and development analysis show.
An opportunity for financial technology firms in the space is that despite the rise of remittances, the cost remains somewhat high.
For instance, the cost of sending $200 across international borders continued to be high, averaging 6.4 per cent of the amount transferred in the first quarter of 2021, according to the World Bank’s Remittance Prices Worldwide Database. This is more than double the Sustainable Development Goal target of 3 per cent by 2030.
The analysis also shows that it is most expensive to send money to Sub-Saharan Africa (8 per cent) and lowest in South Asia (4.6 per cent).
Costs tend to be higher when remittances are sent through banks than through digital channels or through money transmitters offering cash-to-cash services.