Amidst rumors of Kuda shutting down its services in Nigeria, the Nigerian FinTech giant, founded in 2019, is expanding its financial services beyond the borders of Nigeria and Africa.
The FinTech company aims to provide easy direct debits and local transfer services to Nigerians in the diaspora. Kuda’s direct debit and transfer services is supported by UK-based third-party financial services provider, Modulr.
Kuda’s service expansion outside Nigeria is structured to save UK-based Nigerians the extra transfer charges outside the country. According to World Bank Remittance Prices Worldwide, high remittance costs on large inter-currency transfers constitute 8% and 3% short of the Sustainable Development Goal target.
By starting Kuda in the UK, the digital financial company seeks to provide seamless and affordable financial services to Africans in the diaspora at a much lesser charge. It is estimated that more than £3 billion is transferred from the UK to Nigeria annually; Nigerians would now spend less in transfers as UK-based subsidiary – Kuda EMI Limited will charge a flat fee of £3 only with a transfer limit of £10,000.
Babs Ogundeyi, Kuda’s co-founder, stated, “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.”
Kuda plans to expand the services to Ghana, Uganda, and other African countries. Kuda has recorded success in raising $90 million from investors and is envisioned to increase its cap value.
While there was no report on investigating the cause or reason for the shutdown rumor, the management debunked the story promising a continual delivery of quality digital financial services from time to time.
As an alternative channel of digital financial services is made available internationally, one can be sure of quality transfer services, but what effect will it have on the economy and the financial market?
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