Grace Ashiru
Kuda Technologies, the Nigerian-based parent company of Kuda Microfinance Bank, has recently obtained payment licenses in Tanzania and Canada. This significant achievement paves the way for the company to expand its presence across the African and global markets.
One of the licenses will enable the African neobank to offer remittance and multi-currency wallet services to Africans residing in Canada.
The Tanzanian Payment Service Provider (PSSP) will also witness the challenger bank extending comparable services to its customers in the East African country, as part of its additional license.
After successfully establishing a presence in the Tanzanian and Canadian markets, Kuda is poised to take on other African-focused fintech startups, including LemFi, Eversend, and Nala, as it operates as a global neobank serving the African diaspora.
Kuda has made a strategic move to enter the burgeoning remittance market, securing a digital banking license from the State Bank of Pakistan (SBP) on January 13, 2023. This marks Kuda’s latest foray into the sector, joining forces with five other banks to establish its presence in the country.
In addition, in 2022, the fintech company obtained a payment license in the United Kingdom (UK). Subsequently, it introduced a subscription-based remittance product with a transfer limit of £10,000 and a flat fee of £3.
Unfortunately, the offering has been discontinued, suggesting that the Northwestern European market was not yet prepared for a subscription-based remittance service.
Kuda has not yet specified its rollout plans for the two new markets. However, given the outcome in the UK, it is probable that the digital bank will not choose a subscription-based model when launching operations in Tanzania and Canada.
The remittance market is experiencing a surge in investor interest, driven by the growing number of Africans, especially Nigerians, seeking better opportunities abroad.
In 2022, Nigeria emerged as the fourth largest source country for immigration to Canada, with 22,085 individuals making the move from the West African nation.
In the same year, remittance inflows into Africa were estimated at $100.1 billion, representing 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 prioritize 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.
