The Reserve Bank Of Malawi has issued an International Money Transfer Operator (IMTO) licence to Africa's most valuable startup, Flutterwave, allowing it to facilitate international remittances through the Send App.
The Send App enables users to send funds from about 30 countries globally, including the United States and Canada. "At Flutterwave, we understand our critical role in enabling individuals and businesses to navigate the global financial terrain seamlessly. This expansion spotlights our dedication to customer satisfaction as we bring the world closer to their fingertips," says Flutterwave co-founder and CEO, Olugbenga Agboola.
Per Macrotrends and Afrobarometer, approximately 200,000 Malawians reside in the diaspora, and nearly half of the population contemplates emigration. Between now and 2027, the Malawian digital remittances market is projected to experience a 7.21% growth; leading to a market volume of $446.20k by the end of 2027 with about 4,200 users by 2027.
"We are grateful to the Reserve Bank of Malawi for placing their trust in us. We look forward to this remarkable journey, and we remain committed to delivering the best possible financial services to the people of Malawi," he added.
Pursuing the $656 billion global remittances market
The Malawian IMTO represents the latest step in Flutterwave's strategic positioning as a prominent player in the remittance sector across the continent.
Earlier this year, the fintech secured two new licences in Rwanda, one dedicated to remittance payments, adding to its existing IMTO licence in Nigeria. Additionally, Flutterwave recently entered into a partnership with IndusInd, the sixth-largest bank in India by assets, to enhance and expand its remittance product, Send App.
"Remittance flows have become one of the largest sources of external finance to African countries after foreign direct investment and continue to attract increasing attention because of its rising volume and impact on the receiving countries," Agboola said. "Yet, despite the ever-increasing attention on remittance as a potential development tool, sending money to Africa is more expensive than sending it to any other region in the world."
According to the World Bank, Sub-Saharan Africa maintains its position as the region with the highest remittance costs. Sending $200 to the region in the last quarter of 2022 incurred an average cost of 8.0% of the transferred amount.
"Africans in the [diaspora] 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's CEO, Babs Ogundeyi said. "They are forced to limit each transfer to a few hundred pounds to avoid losing money or face escalating exchange rates with bigger transfers."
Aside from Send by Flutterwave, other fintech solutions like AfriChange, NALA and Kuda, are offering Africans cheaper rate to conduct remittance transactions.
Related Article: Sub-Saharan Africa's top 10 remittance recipients in 2022