Uganda is sixth largest market for digital cash transfers

United States of America dollars on a counter in a banking hall. FILE PHOTO

What you need to know:

  • Demand for instant, digital remittances is going up not only in Uganda but also other parts of the world. Digital money transfers - sending money to another person via electronic platforms - is a modern convenience simplifying cash transfers. In interview with Daily Monitor’s Martin Luther Oketch, Ms Sharon Kinyanjui, the head of East and Central Africa at WorldRemit, gives insights on digital money market.

WorldRemit started operating in Uganda in 2012. How viable is the Ugandan market for digital money transfer service business?
Uganda is the sixth largest market of 147 receiving countries. There are many Ugandans in the Diasporas in U.K, USA, and in other sending countries who send money to their relatives back in Uganda. So our operation in Uganda is very productive.
In Africa, Uganda is one of the top five remittance receiving countries in Africa for WorldRemit. The World Bank estimates that the country received more than $1.4 billion (Shs5 trillion) in remittances in 2017, accounting for 5 per cent.
The currencies they send money are United States dollar and British Pounds for those who have foreign accounts in banks and then the local currency Uganda shilling as well as the Ethiopian currency. The market here is very flexible and people use their identity cards to pick their money.

How many countries is WorldRemit operating in at the moment?
Countries where WorldRemit is operating have been divided into two categories – sender countries which host most of the diaspora from African countries and other parts of the world. In this category, there are now 52 countries.
The second category is the receiving countries. There are 147 of them in the world including Uganda.

You have said the Ugandan market is sixth largest in the world. How many agents does WorldRemit have in Uganda?
In Uganda, we are working with MTN telecommunications company, Centenary Bank, Supergate forex bureau, Metropolitan forex bureau, UAE Exchange now re-branded as Unimoni.
We have just signed an agreement with Bank of Africa to expand money transfer services in Uganda.
The Ugandan diaspora in more than 50 countries can now send money instantly for collection as cash at Bank of Africa branches using the WorldRemit app or website.
Africa now accounts for over half of WorldRemit’s transactions globally. Our collaboration with Bank of Africa will support our plan to serve 10 million customers connected to emerging markets by 2020.
How much money can one send to Uganda via WorldRemit?
It depends on the country where one is living in. From the UK, which is our largest market because there are many Ugandans in the UK, one can send up to 8,000 pounds while using credit card and debit card to a relative in Uganda.
When you send money using your bank account, you can send up to 50,000 pounds. This is a lot of money which can help the receiver to put up tangible projects in the country such as buying land or building a commercial house.

How does somebody in Uganda receive money through WorldRemit?
They can receive money via their bank accounts, a traditional channel which can take one working day.
They can also receive it through mobile money with MTN which is instant or through cash picks. Our operation or platform is digital based and people use apps to send and receive money.

When will Uganda become a sender country?
We are working on that. Uganda will join the sender category of countries in the near future since there are some foreigners living or working and doing business here.
Sending money to Sub-Saharan Africa is the highest with the World Bank estimating it at 9.4 per cent higher than 7.1 per cent of the global average per every $100 one is sending.

What are the charges?
Since our platform is digital, the charges are not as high as those of traditional money transfer agents such as the Western Union, MoneyGram or Express money transfers. The charge is $99 cent per every $100 one is sending.
So, it is the cheapest and enables receivers in Uganda to get more money because the sender is paying less in sending and the receiver gets more money.

Who are some of these 52 sender countries?
These countries are western world some them are UK, Sweden, Norway, Finland, USA, Australia Saudi –Arabia United Arab Emirates. In the recent past, we have seen many Ugandan professionals living in Australia and they send a lot of money here via WorldRemit.

Future. There will be more digital innovations. Uganda is very innovative and East Africa is the hub of mobile money. So the number of customers are growing every day.
The World Bank estimates that remittance globally will reach $600 billion by 2030 with digital platforms driving it. By that time, 60 per cent of the transactions will be digital.

Competition. Ms Kinyanjui says their service is more digital based and it is password operated unlike the traditional operators of the international money transfer services which has many processes that take some time.