Nigerian-founded digital bank, Kuda, is launching in the United Kingdom today with a UK-Nigeria remittance product.
Kuda says this product is motivated by the current experience of Nigerians trying to remit money to families and friends in Nigeria. According to data, it costs the sender 3.7% of the sent amount to send money from the U.K. making it rather expensive. It is also dominated by the big companies like Western Union, Moneygram.
The World bank says remittance inflows to Sub-Saharan Africa soared 14.1 percent to $49 billion in 2021 following an 8.1 percent decline in the prior year. It also projects a 7.0 per cent increase in the remittance inflow into Nigeria and other countries in the Sub-Saharan Africa region in 2022.
The United Kingdom is the second largest sender of remittances to Nigeria, behind the U.S., and is estimated to transmit £3 billion yearly to Nigeria.
“Africans in the UK are faced with barrier after barrier when it comes to financial services – from challenges setting up accounts to prohibitive and inconsistent fees on meaningful transfers.”
“They are forced to limit each transfer to a few hundred pounds to avoid losing money or face escalating exchange rates with bigger transfers.”
Kuda’s CEO Babs Ogundeyi says that it’s entering the U.K. market charging a flat fee of £3 with a transfer limit of £10,000. It expects its transaction range to fall between £250 to £500.
Kuda is seeking to disrupt this industry by offering lower charges and other alternative services.
According to CEO Babs Ogundeyi, “Ultimately, Kuda is building a one-stop shop for Africans, including other services outside of remittance. And our plan is not just for Africa, but for Africans everywhere.”
“The U.K. is the first of the ‘outside of Africa’ destinations. We plan to be in other African countries and expand the remittance services to customers there and the diaspora market.”
Kuda also says it would be providing direct debits and local transfers to Nigerians in the U.K. It will however be relying on Modulr, banking-as-a-service platform to provide this and other services.
Kuda raised $55 million in a Series B funding round last year
