The Nigerian neobank Kuda is reportedly expanding its reach with new payment licences in Tanzania and Canada.
Neobanks are a growing trend. Forbes describes neobanks as digital-only banking platforms that operate solely online; they do not have a physical presence.
The parent company of Kuda Bank, Kuda Technologies, is backed by Target Global, a Pan-European venture capital firm that says it invests in transformational technology.
One of the licences Kuda has won will allow it to offer remittance and multi-currency wallet services to Africans living in Canada. The second, a Tanzanian Payment Service Provider (PSSP) licence, will offer similar services to Kuda’s Tanzanian customers.
The TechCabal news service says that in 2022 Kuda secured a payment licence in the UK for a subscription remittance offering that has now been discontinued.
However, it suggests that this attempt may be more successful as it may avoid the subscription approach and also because, in 2022, Nigeria was Canada’s fourth largest immigration source country. In addition, there are over 100,000 Canadians of Nigerian descent.
The same source suggests that, again in 2022, remittance inflows into Africa totalled an estimated US$100.1 billion, accounting for 3.4% of Africa’s GDP.
So will focusing on markets where the number of Nigerian migrants continues to grow boost Kuda’s foreign exchange revenue? Remittance is becoming a very competitive market. Tech Cabal cites start-ups LemFi and Nala among would-be global neobanks for Africans in the diaspora but, as our own reports indicate, numerous players, established and otherwise, are getting involved.
