The news:
- Kuda Technologies, the Nigerian-based parent company of Kuda Microfinance Bank, has received payment licences in Tanzania and Canada to further its plans to expand across the African and global markets.
- One of the licences will let the African neobank provide remittance and multi-currency wallet services to Africans in Canada.
- The other licence, a Tanzanian Payment Service Provider (PSSP), will also see the challenger bank offering similar services to its customers in the East African country.
Following its new entrance into the Tanzanian and Canadian markets, Kuda will compete with other African-focused fintech startups, such as LemFi, Eversend, and Nala, operating as global neobanks for Africans in the diaspora.
This is not the first time Kuda has tried its hands on the booming remittance market. Along with five other banks, on Friday, January 13, 2023, Kuda obtained a licence from the State Bank of Pakistan (SBP) to run a digital bank in the country.
Also, in 2022, the fintech secured a payment licence in the United Kingdom (UK), which was followed by the launch of a subscription remittance product with a transfer limit of £10,000 and a flat fee of £3.
However, the offering has been reportedly discontinued, indicating that the Northwestern European market was not ready for a subscription-based remittance service.
Kuda has yet to specify how it will roll out in the two new markets. But following the UK outcome, it is most likely that when the digital bank launches operations in Tanzania and Canada, it will not opt for a subscription-based model.
The remittance market has recently begun to attract more investors, owing primarily to the increased rate at which Africans, particularly Nigerians, travel abroad in search of better opportunities.
With 22,085 people emigrating from Nigeria in 2022, the West African country ranked as the fourth largest immigration source country for Canada.
In the same year, the remittance inflows into Africa stood at an estimated $100.1 billion, which accounted for 3.4% of the continent’s gross domestic product (GDP).
At a time when foreign exchange rates are affecting startup profits, Kuda's plan to prioritise markets such as Canada, where Nigerian migrants are increasingly flocking, will enable it to establish a thriving global remittance business and increase its foreign exchange revenue. The microfinance bank also has the opportunity to spread its influence around the globe.
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