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LemFi’s $33 Million Leap: Pioneering Zero-Cost Remittance for Nigerian Migrants Worldwide

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Nigerian immigrants abroad grapple with challenges in money transfers, stemming from high remittance fees, limited access to formal financial services, and regulations. Often sending a significant part of their income back home, these immigrants seek affordable remittance solutions.

According to the World Bank’s Remittance report, the average cost of sending remittances to Sub-Saharan Africa, which includes Nigeria, is 6.25%.

Traditional transfer methods entail exorbitant fees imposed by banks and agencies, diminishing the aid reaching families and hindering economic impact.

Moreover, many migrants, especially in rural areas, lack access to formal financial channels, compelling reliance on costlier informal options, exacerbating difficulties in ensuring reliable transfers to their families.

A survey conducted by the Enhancing Financial Innovation & Access (EFInA) organization in Nigeria highlights the challenges of financial exclusion. The survey revealed that as of 2020, about 36.8% of Nigeria’s adult population remained financially excluded, lacking access to formal financial services like bank accounts.

Lemfi, Nigerian Fintech, raised $33 million in a Series A funding round led by Left Lane Capital. The funding enables the company to simplify remittance payments for immigrants globally. Other investors included Y-Combinator, Zrosk, Global Founders Capital, and Olive Tree.

The company, formally known as Lemonade Finance was founded in 2020 by CEO Ridwan Olalere and Rian Cochran. It provides financial services for immigrants enabling them to send, receive, convert, and hold money in their home currency, and host countries.

Money Transfer For Migrants Made Simple

Transferring money used to entail the use of different payment for money transfer methods before LemFi simplified the process. High transfer fee’s would also cause substantial loss of funds.

As of July 2023, Lemfi’s subsidiary, RightCard Payment Services Limited, obtained the International Money Transfer Operator (IMTO) license from the Central Bank of Nigeria (CBN). This means that LemFi can now work directly with banks, making money transfers to Nigeria smoother and more convenient eliminating intermediaries.

The Fintech company is also registered as a Money Service Business (MSB) by Canada’s Financial Transactions and Report Analysis Centre, and in the United States of America, and are registered as a Financial Technology company (Lemonade Two).

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