African firms can shape the global financial sector
What you need to know:
- The executive says African companies have the capacity to manage remittances with less bureaucracy
By Eghosa Nehikhare
The Financial Remittances Sector is one of the fastest-growing sectors in the world. In Africa, this sector accounts for hundreds of thousands of direct jobs and millions more indirectly.
The infrastructure invested by companies within this space plays a crucial role in linking the continent to the hundreds of millions of Africans living and working in the diaspora, providing much-needed foreign exchange to countries and maintaining a connection between emigrants and their African homes.
As a result, the financial remittances sector remains a critical tool in powering emerging African economies and with the continent’s increasing populations. If well managed, the sector can provide solutions to many of the continent’s financial challenges, such as bridging the gap between the banked and unbanked populations and providing employment and wealth creation opportunities for millions on the continent.
The growth of Africa’s population presents an increasing complexity in the above challenges. With this increase in challenges comes a significant rise in opportunities, which genuine Africa-founded, Africa-led, and Africa-based companies must address. One such company is the treasury management technology company Multigate, which recently qualified as a SWIFT Lite2 for Business Application provider.
The SWIFT-compatible application connects potential customers to thousands of financial institutions globally by leveraging the SWIFT network. The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system powers a large majority of global financial messaging between financial institutions.
At Multigate, we hope that our story and our journey can be an inspiration to other financial solutions companies around the continent.
In 2021, we secured our International Money Transfer Operator (IMTO) and Payment Solution Service Provider (PSSP) licenses in Nigeria (our historical core market), which served as the first of many regulatory licenses and certifications to come. Last year, we qualified as a SWIFT Lite2 for Business Application provider.
The SWIFT-compatible application validates and connects our customers to thousands of financial institutions globally by leveraging the SWIFT network.
As we seek to address the treasury/cash management needs of African corporates that trade regionally and globally, our product enables seamless consolidation of all global bank accounts for these corporates. This integrated product allows our African corporate clients to manage their liquidity more efficiently and reduce the complexities of managing multiple banking portals.
We believe that this is a testament to the hundreds of companies set up every day across the continent to solve problems that have been classified over the years as uniquely African problems by providing global solutions that can work in Johannesburg as well as in New York.
For instance, our journey to creating global solutions has underpinned our strategies through deep relationship management and our unique understanding of the needs of our clients. This enables us to provide our clients with the most secure treasury and liquidity management experience through our innovative digital platforms and robust partnerships governed by the highest regulatory standards.
For example, concerning improved business efficiency, our treasury management product helps corporate organisations’ finance and treasury departments to be more efficient at managing the company’s funds. They don’t have to rely on multiple banking portals for such or be burdened by manual reconciliation of transactions. Regarding revenue increase, our remittance network enables our financial institution clients to access deep international liquidity at highly competitive rates, thus, in turn, availing such benefits to their clients.
Such business practices should not be an exception, but rather the norm. The entire globe is looking to Africa as the next frontier for expansion, oppor tunity, and unimaginable growth.
The world should know that African companies are ready to play their role in pushing the continent toward prosperity.
The world is fast changing and Africa, like the rest of the world needs to keep pace with these industry transformations.
Eghosa Nehikhare is the CEO of a financial services fintech startup, Multigate.