More than 244 million people are classified as immigrants around the world and account for large percentages of populations in countries like the United States. The Bank of Uganda reported that remittance inflows into Uganda were USD1. 2 billion or sh4.3 trillion in 2020 which was a reduction of $ 200 million from 2019 due to the COVID-19 pandemic.
Ivan Kanyali, the Country Manager, WorldRemit Uganda, a cross-border digital payments service provider shared some sector insights in an exclusive interview with Bankers Journal on the disruption caused by the pandemic, their latest firm acquisition, and the outlook of the remittance space. Here are the excerpts;
The pandemic has disrupted several businesses in ways never seen before. The leadership of many CEOs was put to the test. What’s that one big lesson you have picked in the last two years regarding your operations?
If there’s a lesson to be learnt from this pandemic period, it is that organisations who have put their customers at the heart of their strategy can withstand – and overcome – difficult circumstances.
By prioritising the needs of our customers, we set the standard for the kind of leadership achieved only through goodwill and strategy.
Remittances to Africa have been resilient despite the pandemic. What are some of the driving factors?
While it was predicted that remittances to sub-Saharan Africa would collapse during the pandemic, only a 12.5% decline was reported in 2020 – from US$48b to US$42b1. According to the World Bank, the decline in flows to the region was mainly driven by a 28% drop in remittance flows to Nigeria. Excluding flows to Nigeria, remittances to Sub-Saharan Africa increased by 2.3%.
The determination of migrant workers in the diaspora to support their families in Africa was the leading reason for the resilience of remittances to a region that was adversely affected by border closures and restriction of movement directives.
In Europe and the USA, the fiscal stimulus and unemployment support programmes temporarily ensured money to help sustain their citizens and equally immigrant workers who qualified for it and who, despite new economic challenges, continued sending money to relatives back home.
In the Gulf region, which also has many African workers, strengthened oil prices led to a quick economic recovery, hence the availability of more money for remittance to other regions.
Complaints arise about the cost of sending money. What efforts are you putting forth to address this challenge?
By offering a purely digital service on the send side, we are able to maintain low costs when compared to traditional bricks-and-mortar money transfer companies and agents, as well as enable our customers to save money on transport costs associated with visiting offline agents.
Customer convenience is at the forefront of what we do, and we provide a variety of convenient ways to send money abroad, including bank transfer, airtime top-up, cash collection, and mobile money transfer.
What has been your experience with the banks you work with within this market?
I am pleased to note that the banks in Uganda have welcomed our service and we can now confirm that through WorldRemit, money can be sent from countries like the UK, US, Australia, and Canada directly to most Ugandan bank accounts. Because of our strong networks, the money is credited into the recipient’s bank account within one working day.
Zepz completed the acquisition of sendwave early this year. What value does this transaction add to, for instance, your ugandan operation and partners?
WorldRemit’s parent company Zepz (formerly called WorldRemit Group) acquired Sendwave in 2021.s Approved by the FCA (UK) and licensed by regulators around the world, it opened up more options for our clients around the world to send instant transfers to countries like Uganda.
The pandemic has been a blessing to some companies, especially those operating within the money remittance space and other fintechs. How are you capitalizing on this crisis for future growth?
At WorldRemit, we will continue to empower the communities in which we operate by giving them access to affordable, fast and convenient remittance services, knowing very well that as they flourish, so too does our business. We continue to invest in technologies and strategies that give us the ability to quickly respond to emerging challenges – with a view to keeping us as the money transfer, remittance and digital payments company of choice for customers around the world.