Somaliland, know it? Most people don’t. If you’re reading this from Europe, head south to Nigeria, take a hard left and go straight till you reach the Gulf of Aden. You’ll hopefully have made it to Somaliland – the de-facto independent (but not formally recognised) nation of c.4.5 million people. They have all the trappings of a country – flag (tick), currency (‘Shilling’, tick) and central government (in capital Hargeisa – tick) aside from those pesky guys from the UN and African Union refusing to recognise them and make it all official.


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So why is this an interesting country for money transfer?

Aha, well when your country is not recognised, you need to be smart, agile and creative if you want to be ‘normal’. In this case, Somaliland has embraced mobile money. Officially there are no international banks in the country due to its status – so the nation turned to MTO’s (Mobile Operators) to build its financial infrastructure instead. Most Somalilanders (if not all) use mobile payments in some form every day. Though data is hard to verify, many have speculated that Somaliland might have one of the highest % of mobile money usage in the world.

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Above – Mo Money, less problems

And this is interesting for an international money transfer company, why exactly?

If you’re a big established money transfer beast, the ‘old way’ was great – limited financial options for remittances means nice big margins and low competition. Great for the big existing MT players, terrible for the families who are exploited with sky high commissions.

MTO’s operate in Somaliland with interoperability – and the government actively supports this (more digital money means less need to maintain a physical money supply). This has opened up huge opportunities for digital disruptors to collaborate with local players like Zaad. With a digital MT app, you can be sitting in Helsinki or Holland and send money directly to a loved one in Hargeisa (that’s the capital, remember – pay attention) with a few taps of a smartphone.

Who is the Fintech Unicorn and what are they doing down there?

It’s WorldRemit – the London based money transfer disruptor that’s big all over Europe, Africa & Asia; expanding at lightening speed across the Americas. If you’re an Arsenal fan, you’ll have seen them around the stadium and on TV – they sponsor them in the English Premier League. Not only that, but WorldRemit is founded by a guy called Ismail Ahmed who just happens to be originally from… you guessed it, Somaliland. They were a scale-up but according to Forbes, they are en route to imminent unicorn status and all the pizazz that goes with it. Around 1.1 million payments per month are processed by WorldRemit and it aims to have 10 million customers by 2020.

Image: WorldRemit billboards promoting their new extended services in downtown Hargeisa, Somaliland.

WorldRemit has massively expanded their send & receive money transfer options this summer. According to product guru Alice, these plans are just the start:

In Somaliland we now allow customers to manage their day-to-day finances with a USD wallet. Users can receive international remittances, and store it or and send it to friends and family at home or abroad.

Alice Newton-Rex – Chief Product Officer, WorldRemit

But why, and what’s the upside for WorldRemit, and its customer base? Alice sees both winning from this:

Our customers win because they’ll be able to move money between WorldRemit wallets locally (for free) and internationally for a small cost – giving WorldRemit customers more choice with their money. The Wallet equips WorldRemit with the capability to handle millions of new cross-border and domestic payments connected to emerging markets every day.

Image: An example of the new WorldRemit interface – offering USD Wallet functionality to Somalilanders.


Will WorldRemit be looking to take on the local players in the market?

It doesn’t look like it. WorldRemit has a clear target – the incumbent (traditional) MT companies. Even with their new Wallet offering in Somaliland, they co-brand and reference local partner Zaad in their marketing materials. The approach seems to be to scale and grow by using existing partners. Rather than eat the same pie, WorldRemit wants to grow it so they all win. Andrew Stewart is WorldRemit’s Regional GM of Middle East & Africa:

Our plans are global, and like today, our partners play a critical role. They allow our customers to receive money via cash pick-up, mobile money or bank transfers. When our customers want disbursement of funds from their Wallet, our partners will continue to play a key role in enabling the movement of funds. We have ambitions to launch Wallets across Africa due to there being a global need – and high mobile penetration versus bank accounts.

Image- Andrew Stewart (second right), with colleague Pardon Mujakachi (1st left) busy on the partnership trail in an African nation near you.

WorldRemit look like they’re scaling up and growing mobile wallet offerings but are coy on the next markets in the pipeline. But the inference is, there’s a lot of consumers that are getting a bad deal, and WorldRemit has an app-sized solution to the problem.

The author is the Managing Director of Full Reach. WorldRemit is a retained client. The views above represent the author’s alone and do not necessarily represent the views of Full Reach or WorldRemit.