Nala receives remittance license to operate in Uganda

Nala, the Tanzanian payments and remittance startup has received an  International Money Transfer Operator (IMTO) license from the Bank of Uganda to operate in the country just days after Flutterwave received the same.

With the license, Nala will launch cross- border payments services in Uganda to enable Ugandans in the diaspora remit money back home with ease.

According to Nala Chief Operating Officer, Nicolai Eddy, speaking during the official launch in Uganda, “We operate in 19 European countries, UK and US and with a big number of Ugandans in the diaspora, this is an opportunity for them to make use of our services which are free of charge. They can ably send money to their mobile money accounts and bank accounts with our services.”

The African payments space has a plethora of problems, NALA aims to solve some of them by getting the best FX rates — to save people money on hidden costs and lost fees and making payment reliability — which is very underdeveloped in most African countries. Nala set out to build infrastructure for the long-term play as well acquire new licenses to unlock innovation.

In 2023, NALA acquired Payment Service Provider licenses including Tanzania and Rwanda and also directly integrated with banks and telcos, like its partnership with M-Pesa to enhance NALA by building more elements of the value chain internally and in July this year Nala raised $40 million Series A equity round to serve the Asian and Latin America markets and also launched Rafiki, its B2B payments platform designed to lay the payment rails for the next billion users.

The round, which follows a $10 million seed round in 2022, was led by San Francisco-based VC firm Acrew Capital, with participation from DST Global Partners, Norrsken22, HOF Capital, and existing investors including Amplo and NYCA Partners with angel investors Ryan King of Chime and Vlad Tenev of Robinhood.

In Uganda, Nala aims to help customers remit money instantly and the same amount without any deduction through its payment plan product free of charge.

“For us, money remittances a volume game and we care about doing large volumes. On small transactions we will not make money but on individuals who send large amounts allow us make some money to keep the business alive,” said Eddy.

David Charles Nyende, the principal banking officer for Bank of Uganda welcomed Nala in the sector, noting that the move will help in financial inclusion. “The advantage of their business model is that it allows one to receive money from abroad wherever they are. This means the money comes to the receiver’s phone and eliminates the burden of going to the counter to receive it which helps in financial deepening.”