It seems money remittance transfer service provider, Useremit, is either shifting direction of focus or adding something else to its line of work. The company has tweeted that “very soon, you’ll be able to make Intra-Africa money transfers affordably, securely and quickly.”
This was accompanied by a picture showing Nairobi and Johannesburg and a call to action saying “Sign up now to make the shift with us”.
Very soon, you’ll be able to make Intra-Africa money transfers affordably, securely and quickly.
Very soon, your business can grow beyond its physical borders.
— useremit (@RemitUg) March 10, 2018
In February, Useremit wrote on its Facebook page that “March is coming with a lot of changes here at useremit.” And focusing on intra-Africa money remittances must be one of them if not the only one.
The amount of money remitted to Africa has been steadily growing ever since it dipped in 2016. Remittances to the continent are projected to hit “around $39.2 billion this year and $39.6 billion in 2019” according to the World Bank.
However, the cost of remitting money to Africa is the highest compared to other parts of the World. WorldRemit, DusuPay and Flutterwave are some of the major players in the African money remittances business.
Most money remittance service providers currently focus on the Africa diaspora community. Ignoring the intra-African opportunity. According to Send Money Africa, sending money across Africa is almost twice as it is to send to Africa. Stating that “the top 10 most expensive corridors [for sending money] are predominantly intra-African.”
While as it costs 9.1% to send money to Africa as of 2017 Q3, according to the World Bank, the cost of remitting money between South Africa and Botswana stood at 19.86 percent in Q4 of 2016 according to Send Money Africa. Making it the most expensive corridor in the world.
There’s still a lot of potentials to be explored when it comes to remittances within Africa. Especially sub-Saharan Africa. Within sub-Saharan, the South African and Tanzanian corridors remain the most expensive to remit money in.
Of the top 10 most expensive corridors in the World, 9 are between the South African and Tanzanian corridors. These include; South Africa to Botswana, South Africa to Angola, South Africa to Lesotho, South Africa to Swaziland, Tanzania to Uganda, South Africa to Zambia, South Africa to Malawi, Tanzania to Rwanda and South Africa to Mozambique.
In one of this week’s TechCabal newsletter, Bankole detailed his woes trying to send money from Nigeria to Kenya. Concluding that “besides Western Union, there is no real way to move money between African countries.”
Yet, even though MTOs, Mobile Transfer Operators, like Western Union are cheaper and more convenient than banks, their cost is at an average of 7.35%. This is still higher than the global average of 7.2%.
Useremit is up against a big and very rewarding challenge. It won’t be surprising if WorldRemit, DusuPay and Flutterwave also look inward and give intra-Africa remittances more focus soon.