Competition to stiffen as new player joins money transfer

Competition among companies facilitating sending remittances from Ugandans living and working abroad back home is set to heighten as a new player joins the market.

Worldremit, which partnered with MTN Group, seeks to enter the market occupied by the traditional global money transfer companies such as Western Union and Money Gram by facilitating international mobile-to-mobile remittances.

The traditional money transfer companies require senders to travel to their offices and fill in a lot of paper work before money is sent.

Worldremit allows customers to download an application on their mobile phones, which they use to send money direct into the intended receiver's MTN mobile money account.

The World Bank annual migration and remittances Factbook shows that remittances by Ugandans living and working abroad increased to sh2.99 trillion ($908m) this year, up from sh2.92 trillion ($887m) received last year (2014).

MTN Group head of mobile financial services, Serigne Dioum, said the partnership provides instant, fully digital and affordable solution to send international remittance Uganda, Rwanda and Zambia.

Worldremit senior mobile analyst, Alix Murphy, said the initiative will be a game-changer as it makes sending remittances as easy as sending an instant message.

Worldremit, which operates in over 52 countries globally, seeks to tap into the growing usage of mobile money services in Uganda, Rwanda and Zambia.

Mobile money in Uganda has grown tremendously over the years, riding on the strong growth in mobile phone usage.

The number of mobile money accounts in Uganda is currently estimated at 19.5 million, with the value of transactions valued at about sh24 trillion from sh3.75 trillion in 2009.

Andrew Rugamba, the MTN Uganda senior sales manager, recently told the diaspora forum in Kampala that sh2b is sent through MTN mobile money platform from Ugandans living in the diaspora weekly while the total mobile money value is estimated at sh2 trillion.

Rugamba noted that although the telecom is licensed to do inbound remittances only at the moment, it is working with Bank of Uganda to allow them do outbound remittances.