Kuda Microfinance Bank, backed by Target Global, has embarked on an ambitious expansion plan, securing payment licences in both Tanzania and Canada.
These strategic licences mark a significant milestone in Kuda’s efforts to extend its services across Africa and into the global market.
Targeting Diaspora Remittance Market
The newly acquired licences position Kuda to directly compete with other startups like LemFi and Nala, which cater to the needs of Africans in the diaspora.
One of the licences obtained by Kuda will enable the provision of remittance and multi-currency wallet services to Africans residing in Canada, while the second licence, a Tanzanian Payment Service Provider (PSSP) licence, will offer similar services to customers in Tanzania.
Market Insights and Previous Ventures
Kuda’s venture into the remittance market is not unprecedented. In 2022, the bank secured a payment licence in the United Kingdom and introduced a subscription-based remittance offering with a flat fee structure.
However, this product has since been discontinued, indicating that the market may not have been receptive to a subscription-based model.
Opportunities in the Remittance Market
The remittance market has emerged as an attractive investment opportunity, driven by the increasing number of Nigerians and Africans seeking opportunities abroad.
With Nigeria ranking as Canada’s fourth-largest immigration source country and significant remittance inflows into Africa, Kuda aims to capitalize on these trends by focusing on markets like Canada and the UK, where the Nigerian migrant population continues to grow.
Strategic Focus and Revenue Growth
By strategically targeting markets with a sizable Nigerian diaspora, Kuda seeks to bolster its foreign exchange revenue amidst challenging FX rates that have impacted the profitability of startups.
The expansion into Canada and Tanzania represents a strategic move to tap into growing remittance flows and capitalize on opportunities in the global remittance market.
Business News