In recent years, remittances from the Diaspora have been a significant contributor to most African countries’ total gross domestic product.
For the case of Rwanda, according to statistics by the National Bank of Rwanda (BNR), by November last year, the Diaspora had remitted $152 million (about Rwf103 billion).
The figure had slightly gone down from $175 million (about Rwf119 billion) in 2012, yet still had a significant impact on the country’s economy.
One of the prevalent challenges that have been faced by the Rwandan Diaspora community and other such communities is the high cost of remitting money back home.
Going by a United Nations Conference on Trade and Development for the Least Developed Countries report, the average cost of formal remittance of money is 12 per cent in developing countries, one third higher than the global average, but for the East African region, it was approaching 25 per cent as at 2012.
However, like in most scenarios, some few people saw an opportunity as others just sat lamenting. It was through this that a group of four young Rwandan men then based in the US came up with a solution that has not only changed the way select group of Rwandans send money back home but people across the world in over 100 countries.
Idea at work
It was because of the high cost of sending money back home that ‘IStayConnected LLC’ was formed.
Alex Rugema, Jean Leon Iragena, Bosco Munyaneza and Diogene Ishimwe, who were studying in the US, came together and on October 15, last year, the firm was born.
“It was hard for African students abroad to communicate with their families owing to high costs or to chip in paying family bill,” Phillip Mutijima, who is the group’s marketing officer, told The New Times.
“We realised that it was cheaper for people in Africa to call abroad, so we came up with a system where people in the Diaspora would be able to buy airtime for their families back home. We also had realised that it would be cheaper to directly pay bills such as electricity bills than have to send money to family.”
The service enables people in the Diaspora to pay bills such as power or water and also buy airtime for people back in their home countries with no extra costs.
When they put up the system, they had targeted Rwandans abroad, but as soon as they rolled it out, they found out that there were more demands than they had anticipated from across the world.
During the first three months, its revenue increased by 87 per cent.
“Our target initially was Rwanda, but we soon realised that there was demand all over the continent and beyond. We now serve about 100 countries, with Russia and Indonesia being our biggest markets,” Mutijima said.
The model used in the payment system only requires one to have an internet connection and own international credit cards like Visa, MasterCard.
A user then logs in to www.istayconnected.net where they choose the service to transact.
How they did it
Their success would have one believe that they had it easy, which is not the case, they began with capital from their personal savings and contributions amounting to about Rwf6m.
The next phase of bringing partners such as mobile service providers on board proved to be the most difficult, but not impossible.
Ironically, only one of the four co-owners of the project is an IT specialist–their areas of specialisation range from civil engineering and aviation to finance.
Since the project is not labour-intensive, they have a slim staff of two other people, but are projecting on expanding it to 350 labour force in the next three years.
Their service has generated interest from people all over the world with some seeking to own shares.
“At times, we receive offers for part-ownership of the enterprise, which we turn down when we realise that we do not share a common goal with whoever wants to come on board,” Mutijima said.
“We seek strategic partnerships, not just money. We vet those who we do business with. Recently, we put up 20 per cent of our enterprise for sale with a share going for $3,500 (about Rwf2.3 million). So far, 11.5 per cent has been bought.”
In the near future, they plan to grow the enterprise increasing its yearly revenue to $350 million, create 350 job opportunities and offering 1,000 internship opportunities to people interested in the fields of ICT, Sciences, Economics, Finance and Accounting.
The quartet, all yet to hit 30, say they draw inspiration and drive from President Paul Kagame, who has always encouraged the youth to stay ambitious and be innovative.