The money made by fintech companies in Nigeria from remittance has been estimated to reach an impressive $1.19bn this year. The estimate was released by PricewaterhouseCoopers (PwC).
Fintech firms like SureRemit, Renmoney and the likes that help Nigerians abroad to send money to friends and family in the country may gross even greater profits from users based on a white paper published by the consulting firm.
According to the paper which is titled ‘Strength from abroad: The economic power of Nigeria’s Diaspora’, remittances made by Nigerians this year could grow to $25.5bn which would in turn mean a greater profit for the fintech firms.
Monitoring the rate and volume of fintech transactions in Nigeria and sub-Saharan Africa, the World Bank recently released a report. According to the ace bank, the cost of sending money through a remittance corridor in Sub-Saharan Africa is 9.3% on the average.
But the benefits of remittances are reduced by the generally high cost of sending the money, which averages 7% on a money transfer of $200. Banks were the costliest channel for transferring remittances, at 10.9%. In Sub-Saharan Africa the cost of sending money is higher than the average at 9.3%.World Bank
The report went on to say that since 2018, a slight decrease in remittance costs had been observed in transactions in the region. The decrease, however, is still above the global average of 7% and the SDG target of 3%. The SDG remittance fee target percentage is to be met by the year 2030.
Nigeria, the largest remittance-recipient country in Sub-Saharan Africa and the sixth largest among LMICs, received more than $24.3 billion in official remittances in 2018, an increase of more than $2 billion compared with the previous yearWorld Bank Report
Remittance to Nigeria was the highest in Sub-Saharan Africa in 2018 with $24.3 billion received in official remittances, according to World Bank. The growth in remittance rate is predicted to keep increasing. This predicted increase is attributed to the strong economic conditions of the high-income economies where a lot of the Sub-Saharan immigrants earn their living.
With these huge numbers being generated from remittance activities by immigrants, money generated from remittances is fast becoming a key source of external financing.
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