In a strategic move to enhance its East African remittance operations, NALA Money, the Tanzanian fintech specializing in cross-border payments for businesses and consumers, has announced plans to establish Rwanda as a settlement hub. This development comes with the backing of notable investors, Bessemer Ventures and Accel.
The decision to make Rwanda the settlement hub implies that all international money transfers facilitated by NALA Money for beneficiaries in East Africa will be routed through Rwanda before being settled into the accounts of recipients across the region.
Earlier this year, Flutterwave, a prominent privately held fintech in Africa, unveiled a similar initiative after obtaining a payment service provider (PSP) license in Rwanda.
NALA Money, which facilitates money transfers from residents in the United Kingdom, Canada, and the United States to nine African countries, recently secured a license from Rwanda’s apex financial regulator, the National Bank of Rwanda. Nicolai Eddy, the Chief Operating Officer of NALA, highlighted that the license empowers the company to streamline processes, eliminating intermediaries and ultimately providing more cost-effective international money transfer services.
Eddy emphasized, “It means we can aggregate the payment channels ourselves. We want to go deeper, and a PSP license also means that we can process remittance payments for third-party providers and integrate with local banks and telcos.”
The acquisition of a PSP license in Rwanda grants NALA the ability to offer money transfer services through established entities like Western Union, potentially opening up new avenues for distribution and customer acquisition. Historically, fintech companies, including NALA, had to rely on payment aggregators like Cellulant, DPO Payment, or Onafriq (formerly MFS Africa) to disburse payments to customers in Rwanda.
According to World Bank data, remittances as a percentage of GDP reached 3.6% ($474 million) in 2022. Collectively, Kenya, Uganda, Tanzania, and Rwanda received approximately $6.36 billion in remittances last year.
Rwanda is actively positioning itself as a leading hub for financial services firms. The 2022–2027 fintech plan outlined by Rwanda’s ICT Ministry aims to establish the country as the gateway for entering the African fintech market. Notably, some of the continent’s major fintech players, including ChipperCash and Paystack, have already entered the Rwandan market.
