Cross border cash remittance service NALA launches in Uganda

NALA, a provider of cross-border payments and B2B payment solutions, has launched its services in Uganda after being granted a money remittance license by the Bank of Uganda.

NALA, which has a presence in 21 countries, including the UK and the US, offers money remittances via mobile money wallets, and bank accounts, with no fees.

Speaking at the launch in Kampala on Thursday, Mr Nikolai Eddy, NALA chief operating officer, said their business model relies on high transaction volumes, making small margins on foreign exchange.

“So for us, money remittances is volumes. We care about doing large volumes, and that’s what we hope to do here to Uganda. So for us, we make a very small markup on foreign exchange, and that’s how we make our money. So on small transactions, we won’t make money, and we’re okay with that, but for individuals who send larger amounts, that allows us to make some money and keep the operations alive,” he explained.

He said Uganda’s large diaspora population and regulatory support made it an attractive market for expansion.

“Uganda is extremely important because there’s a great diaspora population that lives in the United States, Europe and the UK, and those are the markets where we operate, where we hold licenses and we hold permissions to do money remittances. So Uganda is a very, very interesting market,” he said.

Mr David Charles Nyende from the Bank of Uganda said the company has been given a Class A licence, which is to provide cross-border money remittances.

He said NALA will support Uganda’s financial inclusion agenda given its convenience of receiving money without physically visiting a counter.

Ms Sophie Birungi from the Diaspora Department in the Ministry of Foreign Affairs, highlighted the challenges faced by diaspora members, such as the safety of their money and when sending it back home.

 “Then we have cases of Ugandans outside who are unable to open accounts where to save their money, reason being most of them have overstayed their visa. Therefore they end up saving their money in houses. And when police break into their houses, their money is taken,” she added.

Ms Birungi said the new initiative is what many banks have been missing.

“Now we have people who do mobile money in those countries, but I can tell you sending a mere Shs100,000 in Uganda here is very expensive. So we are encouraging other banks to try to design a product that will help Ugandans abroad to open accounts here, even when they are outside there,” she said.

This license from the Bank of Uganda comes on the heels of NALA announcing its $40 million fundraising, one of the largest Series A rounds in Africa. The firm is using these funds to support its global expansion and enhance the reliability of payments to Uganda and Africa by developing its payment rails.