NALA Money, the Tanzanian business and consumer cross-border payments fintech backed by Bessemer Ventures and Accel, says it plans to make Rwanda a settlement hub for its East African remittance business. Making Rwanda a settlement hub means that all international money transfers that Nala processes for beneficiaries in East Africa will first terminate in Rwanda before it is settled into the accounts of beneficiaries across the region.
In June this year, Flutterwave one of Africa’s most-valued privately held fintech, announced a similar plan after it acquired a payment service provider (PSP) licence in Rwanda.
Nala Money, which allows residents in the United Kingdom, Canada and the United States to send money to 9 African countries, recently acquired a licence from Rwanda’s apex financial regulator, the National Bank of Rwanda. The licence will allow the company to cut out middlemen and offer cheaper international money transfers, Nicolai Eddy, chief operating officer of Nala told TechCabal. “It means we can aggregate the payment channels ourselves,” Eddy said, “We want to go deeper and a PSP licence also means that we can process remittance payments for third-party providers and integrate with local banks and telcos.”
A PSP licence in Rwanda means NALA can offer money transfer services through established players like Western Union, potentially opening up a new distribution and customer acquisition front for the business. Previously a fintech like NALA would have to rely on payment aggregators like Cellulant, DPO Payment or Onafriq (previously MFS Africa) in order to disburse payments to its customers in Rwanda. Per the World Bank, remittances as a percentage of GDP reached 3.6% ($474 million) in 2022. Altogether, Kenya Uganda, Tanzania and Rwanda received roughly $6.36 billion in remittances last year, World Bank data shows.
Rwanda hopes to become a leading hub for financial services firms. The 2022–2027 fintech plan of Rwanda’s ICT Ministry says it hopes to build, “the narrative that Rwanda is the gateway for entering the African fintech market.” Some of the continent’s biggest fintechs already operate in the country with ChipperCash and Paystack being the most recent entrants.
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