African remittance startups are thriving as sub-Saharan Africa received a record $56 billion in remittances in 2024, marking the fourth consecutive year of growth. Companies like LemFi and Nala have attracted significant investments and expanded operations, addressing inefficiencies in a market long dominated by Western Union and MoneyGram. Last July, Nala raised $40 million. This month, it expanded operations to Pakistan and the Philippines. Both countries are in the top five global remittance destinations. Likewise, Lemfi raised $53 million earlier this month after surpassing $1 billion in monthly transactions. The startup recently expanded operations to France, Germany, Italy, and Norway. Despite the progress these startups have brought to remittance payments, high transfer costs, forex fees, and inefficiencies persist. Analysts emphasize the need for continued innovation to lower costs and improve accessibility, particularly for remittances to and from Africa.
Source: SEMAFOR