NALA, a Tanzania based Fintech company, has teamed up with Kenya’s Cellulant, a Pan-African Payments Company, to oversee and allow remittance payments from the United Kingdom and the United States into Kenya, Uganda, Rwanda, Tanzania, and Ghana for customers. Besides Official Direct Assistance (ODA), remittances make up the second-largest source of external resources for Sub-Subsaharan Africa, according to Cellulant. Approximately $48 billion was remitted in Africa, with Nigeria receiving roughly 50% of this amount, followed by Ghana and Kenya. Despite a decline in remittance inflows in sub-Saharan Africa in 2020 due to the Covid-19 Pandemic, countries such as Kenya and Ghana experienced an increase in cross-border payments. Remittance inflows into Sub-Saharan picked up again and grew roughly by 6% in 2021.
Transaction fees absorb a large percentage of the billions sent to Africa every year. The cost of sending money into Africa is the highest across all regions. Tanzania and Kenya remain the highest with charges at 17% and 21% respectively for every $200 sent. With increased intra-African trade between Africa and the rest of the world, the transaction cost is one of the barriers to success in facilitating cross-border payments. The new partnership between Cellulant and NALA aims to facilitate seamless cross-border payments and significantly reduce the cost of sending money from the UK and the US into Africa. NALA, a Y-Combinator-backed company, provides an app for Africans living in the United Kingdom and the United States to send money to the continent seamlessly. NALA is currently active in Tanzania, Uganda, Kenya, Rwanda, and Ghana and is preparing to join the Nigerian and Ethiopian markets. The company is looking forward to expanding its services across Africa, the United States, and Canada.