LemFi (formerly Lemonade Finance), a pan-African fintech startup that powers remittance on the continent has shut down its operations in Ghana, this means that users will be unable to carry out transactions to mobile money and banks in the country. “We recognise that this change will bring about some inconvenience, and we sincerely apologise,” the fintech said in a statement.
Last week, we reported that the Bank of Ghana released the list of eight remittance providers that are operating in the country’s foreign exchange market without approval. LemFi was one of those providers. Others include Wise, TransferGo, Xoom, Sendvalu, Boss Revolution, Aza Finance and Supersonicz.
In a statement seen by Bendada.com, Sandra Thompson, the secretary of Ghana’s Central Bank asked all financial institutions in the country to desist from operating with the unlicensed providers. “Approved MTOs are hereby reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all guidelines in respect of their operations,” she said.
Section 3.1 of Ghana's Foreign Exchange Act, 2006 (Act 723), explicitly prohibits individuals and organisations from participating in the forex market without obtaining a license as per the provisions of this Act.
Furthermore, according to section 15.3 of the Act, any transfer of forex to or from Ghana must be conducted through a licensed entity authorised to engage in money transfers or any other approved dealer.
Ghana is one of the 10 African countries to which LemFi users from the US, UK, and Canada can send money. When it announced its $33 million Series A earlier this year, Rian Cochran, co-founder at LemFi told Bendada.com: “We want to pursue more licenses to drive expansion and also build up the products.”
“LemFi has been very deliberate and strategic in acquiring licenses and building a robust network of financial institution partners to facilitate cross-border payments for immigrants,” Matthew Miller, Principal at Left Lane Capital, who recently joined LemFi’s Board of Directors as part of the transaction, claims.
While Cochran did not mention the locations for which it seeks licenses, the Bank of Ghana's crackdown could potentially accelerate the fintech's registration process in the country, though this is currently uncertain. “If anything changes in the future, you will be the first to know,” LemFi said in a statement posted on X.
This is a developing story