Africhange, a bootstrapped remittance company, has acquired an IMTO license for its Nigerian subsidiary. This license allows the subsidiary to process foreign currency transfers as it begins fundraising efforts. However, the license only allows inbound transactions, restricting holders from processing outbound transfers.
The startup will compete with at least 70 companies, including deep-pocketed competitors like Lemfi and Flutterwave, processing inbound forex transfers into the country. Africhange plans to stand out in the increasingly crowded remittance market with cheaper rates and faster services.
Since May, the central bank has issued over a dozen IMTO licenses as part of a push to increase the flow of foreign currencies into Nigeria. This surge in licensing led to a $585 million remittance flow in August, marking a 130% year-on-year increase.
“We recognized in the central bank that certain things were not happening and that there was a need for the central bank itself to see what it could do with respect to encouraging inflows into the system. And I’m happy to say that it has paid off,” Yemi Cardoso, the CBN governor, said about the rise in IMTO licenses in September.
Nigeria is one of Sub-Saharan Africa’s largest remittance recipients, with remittances accounting for 38% of the region’s $54 billion total in 2023, according to the World Bank’s Migration and Development Brief.
Africhange had previously relied on third parties to process remittances into Nigeria, but the new license will allow it to sidestep those costly partnerships and process transfers independently. The startup will still need direct partnerships with Nigerian banks for transfers over $200, as amounts above that limit must be deposited directly into bank accounts.
“Securing the IMTO licence allows us to offer a faster, more affordable way for people to support their loved ones back home,” said David Ajala, the CEO of Africhange.
Founded in 2020, Africhange has over 200,000 users globally and has processed more than 2 million transactions since inception. The startup operates across 100 countries, including Canada, Nigeria, the UK, and Australia, processing several currencies and services for international transfers.
Editor’s Note: The headline of this article has been updated to show that Africhange provided remittance services in Nigeria before acquiring the IMTO license.
