NALA Money, the Tanzanian fintech specializing in cross-border payments for businesses and consumers, backed by Bessemer Ventures and Accel, announces its intention to designate Rwanda as a settlement hub for its East African remittance operations. This strategic move entails routing all international money transfers processed by Nala for beneficiaries in East Africa through Rwanda before settling into the accounts of recipients across the region.
Following a similar initiative by Flutterwave, a leading privately held fintech in Africa, which announced plans after acquiring a payment service provider (PSP) license in Rwanda in June of this year, Nala Money is gearing up to leverage Rwanda’s position for its remittance business.
Recently securing a license from Rwanda’s apex financial regulator, the National Bank of Rwanda, Nala Money aims to streamline its operations, eliminate intermediaries, and provide more cost-effective international money transfers. Nicolai Eddy, the Chief Operating Officer of Nala, emphasized the significance of the license, stating that it enables the company to aggregate payment channels independently. Furthermore, the PSP license allows NALA to process remittance payments for third-party providers and integrate with local banks and telecommunication companies.
Possessing a PSP license in Rwanda empowers NALA to offer money transfer services through established entities like Western Union and opens up possibilities for new distribution channels and customer acquisition. Traditionally, fintechs like NALA relied on payment aggregators such as Cellulant, DPO Payment, or Onafriq (previously MFS Africa) to disburse payments to customers in Rwanda.
According to World Bank data, remittances accounted for 3.6% of GDP ($474 million) in 2022. Kenya, Uganda, Tanzania, and Rwanda received approximately $6.36 billion in remittances last year. This move aligns with Rwanda’s ambition to position itself as a prominent hub for financial services firms, as outlined in the 2022–2027 fintech plan of Rwanda’s ICT Ministry. The goal is to establish Rwanda as the gateway for entering the African fintech market, attracting major players in the industry. Notably, prominent fintechs like ChipperCash and Paystack are among the recent entrants operating in the country.
