Tanzanian financial technology company NALA will inject $5million (Sh636 million) into its Kenyan operations.
The investment comes at a time the firm plans to increase its presence locally to tap into the increasing local remittances from abroad.
The Tanzanian global payments firm says it is hopeful about the opportunity for fintechs in Kenya.
NALA Founder and CEO Benjamin Fernandes said the investment closes in on the size of Kenyan exports, which brought in $5.77 billion (Sh734 billion) worth of foreign currency in the same period.
“We want to increase our commitment to Africa and Kenya by doing rather than trying, and this is a sign for what is to come for NALA in Kenya,” said Fernandes.
Government estimates show more than three million Kenyans live abroad, largely in the US and UK, where they send home an estimated Sh500 billion annually.
Alongside the investment, NALA also announced its cross border payments platform for businesses, which it anticipates will ease frictions for capital inflows to Kenya.
“NALA’s recent innovation enabling payments directly from abroad will support Kenyans in having greater control and reducing leakage on the money they invest back home,” said Permanent Secretary for the State Department for Diaspora Affairs, Roseline Njogu.
Despite the many options for sending money to Africa from abroad, the continent continues to be the most expensive place to send money.
The World Bank estimates average transfer fees to Africa at 9 percent of the amount sent.
Further, many existing options include hidden fees that make it hard to discern the true cost of sending money.