Nigerian digital bank Kuda has expanded its operations to the United Kingdom, offering a remittance product to Nigerians living abroad as part of what it calls "a major global expansion drive."
The UK-based fintech launched in 2019 with the primary objective to offer financial services to Nigerians and other Africans within and outside the continent. The new remittance service will allow Nigerians in the diaspora to send money to recipients, usually relatives, in their home country.
The company which claims to have up to 5 million users, has raised $90 million throughout its funding round, with a plan to enter other African markets. There have also been unconfirmed reports of the neobank losing ₦6 billion naira to operational costs, and closing the year at a net loss at the end of its 2021 financial year.
Kuda, like many other neo-banks, will rely on a third-party banking-as-a-service platform, to provide these financial services. It has now partnered with Modulr an embedded payments platform for digital businesses, to offer a mobile wallet, virtual and physical cards, local U.K. transfers and direct debits.
Nigeria’s diaspora remittances continue to grow, reaching up to $5.16 billion in the first quarter of 2022, the biggest in sub-Saharan Africa, and among the top 10 largest globally. The fintech bank CEO is positive about a stake in the already saturated market.
“I don’t necessarily think it’s crowded because obviously, there are still a lot of challenges in remitting money to Africa, especially to Nigeria, which is still expensive, But for us, it’s not just a remittance play. There’s a user experience, convenience and price factor involved too.” said CEO Babs Ogundeyi in a statement.
Kuda will now have to compete with other neobanks’, such as Revolut, Monzo and Wise, with a much larger footprint in the U.K. and wide acceptance by several demographics, including migrants like Nigerians, which Kuda is targeting with its launch
The fintech says it’s entering the U.K. market by setting a flat fee of £3 with a transfer limit of £10,000 and is expecting most of the transactions that will take place on its platform to fall between £350 to £500.