BANKING
Diaspora Banking
Diaspora Banking
Diaspora banking is a relatively new concept that has emerged as a response to the increasing global trend of migration and the growing need for financial services among immigrants: Diaspora Banking.
What is diaspora banking?
Diaspora banking is a financial service that allows individuals living outside their home country to access banking and financial services. This type of banking addresses the specific needs of individuals living abroad. It can include features such as remittance services, foreign exchange, and other services commonly used by people in diaspora communities.
Why is diaspora banking important?
Diaspora banking is essential because it provides individuals living abroad access to financial services that they may not be able to access in their host country. These services can help people to manage their money, send and receive remittances, and conduct other financial transactions in a way that is convenient and cost-effective. Additionally, diaspora banking can help to promote financial inclusion among individuals who may not have access to traditional financial services.
What services are offered by diaspora banks?
Diaspora banks typically offer a range of services designed to meet the needs of individuals living abroad. These can include
- Traditional banking services such as checking and savings accounts.
- Specialised services such as remittance services, foreign exchange, and investment options.
- Some diaspora banks may offer additional services such as insurance, credit cards, and loans.
How To open an account with a diaspora bank?
To open an account with a diaspora bank, you will typically need to provide proof of identity, address, and any other information required by the bank. This process may vary depending on the specific bank and the country of location. It is worthy of note that some diaspora banks may only be available to individuals from specific countries or regions.
Are there any fees associated with diaspora banking?
As with any financial service, there may be fees associated with diaspora banking. These can include fees for opening and maintaining an account and specific services such as wire transfers or foreign exchange. It is important to research the fees charged by different diaspora banks and compare them to find the best option for your needs.
Challenges Diaspora Banking Solves/Benefits of Diaspora Banking
Diaspora banking refers to the financial services and products banks offer individuals who migrated from one country to another. These individuals, also known as diaspora, often maintain strong ties with their home countries and send money back to support their families and communities. Diaspora banking plays a crucial role in facilitating these financial transactions and providing various financial services to diaspora individuals and communities.
It Facilitates Cross-border Money Transfers
One of the main functions of diaspora banking is to facilitate cross-border money transfers, also known as remittances. Remittances are a crucial source of income for many developing countries and account for a significant portion of their GDP. According to the World Bank, global remittances attained a record high of $689 billion in 2020, with developing countries receiving most of these funds.
Diaspora banking plays a crucial role in facilitating these remittances and ensuring that the funds reach their intended recipients safely and efficiently. Many diaspora individuals rely on banks to send money back to their home countries as it is often more convenient and secure than using traditional methods such as money orders or carrying large sums of cash. Diaspora banks often offer competitive exchange rates and low fees, making it more affordable for individuals to send money to their home countries.
Diaspora banking is also vital in providing financial services to diaspora communities.
Many diaspora individuals face challenges in accessing financial assistance due to language barriers, cultural differences, and lack of documentation. Diaspora banks often offer specialised services and products that cater to the needs of these communities, such as accounts in different currencies, multilingual customer support, and financial education programs.
Diaspora Banking Supports Small businesses and Entrepreneurs In Developing Countries
Diaspora banking also plays a crucial role in supporting entrepreneurs in developing countries.
Many diaspora individuals use their savings and remittances to start or invest in small businesses in their home countries, which can contribute to economic growth and development. Diaspora banks often offer loans and financing options to support these businesses and entrepreneurs, providing them with the necessary capital to grow and thrive.
Diaspora banking supports development initiatives and humanitarian efforts in developing countries.
Many diaspora individuals and organisations use their financial resources to support causes and projects in their home countries, such as education, healthcare, and infrastructure. Diaspora banks often provide financial solutions and services to facilitate these efforts, such as charitable giving programs and crowdfunding platforms.
Challenges and Risks Of Diaspora Banking
Despite the many benefits of diaspora banking, it has its challenges and risks.
Lack of Regulatory Frameworks and Oversight In Some Countries
One of the main challenges is the lack of regulatory frameworks and oversight in some countries, which can lead to financial fraud and money laundering. Diaspora banks must comply with international regulations and best practices to mitigate these risks and protect their customers.
Impact of economic and political instability on diaspora banking.
Another challenge is the impact of economic and political instability on diaspora banking. Economic downturns and political unrest in a diaspora individual’s home country can affect the availability and stability of financial services, which can impact their ability to send and receive money. Diaspora banks must proactively manage these risks and provide their customers with stable and reliable financial services.
Despite these challenges, the importance of diaspora banking is immense. It plays a vital role in facilitating cross-border money transfers, providing financial services to diaspora communities, supporting small businesses and entrepreneurs, and supporting development initiatives and humanitarian efforts in developing countries. Diaspora banks must continue to innovate and adapt to the growing and changing demands of their customers and the global economy. See
Conclusion
In conclusion, diaspora banking is crucial in facilitating cross-border money transfers and providing financial services to diasporans.
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BANKING
Afreximbank Acts as Joint Lead Manager on Ecobank Transnational Incorporated’s USD 400mn Senior Unsecured Note Issuance
The proceeds of the note will fund general corporate purposes of the issuer, including refinancing of a USD350 million senior bridge-to-bond loan facility that was jointly coordinated by Afreximbank in March 2024.
African Export-Import Bank (“Afreximbank”) (www.Afreximbank.com) is pleased to announce that it has successfully acted as Joint Lead Manager and Bookrunner on a USD 400 million 10.125% Rule 144a/RegS senior unsecured note issuance by Ecobank Transnational Incorporated (“ETI”) due in October 2029.
The proceeds of the note will fund general corporate purposes of the issuer, including refinancing of a USD350 million senior bridge-to-bond loan facility that was jointly coordinated by Afreximbank in March 2024.
The note issuance achieved peak orderbook oversubscription of 2.1x, backed by more than 70 high-quality and diverse investors comprising development finance institutions, asset managers, commercial banks and insurance companies from Africa, the UK, USA, Europe and the Middle East.
Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, commenting on the transaction, said: “We are pleased to have supported Ecobank Transnational Incorporated (“ETI”) in placing the first public Eurobond issuance by any Sub-Saharan African financial institution since 2021, following our bridge financing support earlier in the year. This transaction underscores Afreximbank’s capacity and readiness to structure innovative market access solutions for our pan-African banking partners.”
Afreximbank’s Advisory and Capital Markets (ACMA) department acted as Joint Lead Manager and Bookrunner on the issuance, working alongside international and African partners.
Distributed by APO Group on behalf of Afreximbank.
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BANKING
International Islamic Trade Finance Corporation (ITFC) and the Central Bank of Nigeria Successfully
These workshops form part of ITFC’s Integrated Trade Solutions (ITS) framework, aligning with the organization’s goal of providing holistic trade financing interventions in OIC member countries.
The International Islamic Trade Finance Corporation (ITFC) (www.ITFC-idb.org), a member of the Islamic Development Bank (IsDB) Group, in partnership with the Central Bank of Nigeria (CBN), successfully concluded a workshop on Non-Interest Banking and Trade Finance in Nigeria. Held from 17th to 19th September 2024 in Abuja, the sessions aimed to enhance capacity and knowledge in Islamic banking principles, trade finance products and services, and how different financial toolkits are applied in Islamic finance from operational and business perspectives.
Nigeria’s Islamic finance industry, valued at US$3.8 billion, is one of the major Shariah compliant industries in Africa. Despite some challenges such as low public awareness and a smaller capital base compared to conventional banks, Islamic finance has been substantially contributing to reduce financial exclusion and improve access to affordable finance in the country. The three-day workshop was designed to bridge prevailing knowledge gaps focusing on key areas such as Sukuk issuance and main non-interest banking products basics.
Delivered under ITFC’s Integrated Trade Solutions framework, the workshop equipped professionals with the skills to promote Islamic finance in Nigeria while also highlighting ITFC’s wide range of trade financing services.
Participants reported a significant boost in understanding Islamic banking and trade finance, and the workshop showcased ITFC’s contributions to economic development through sustainable financial solutions.
Eng. Nasser Al Thakair, ITFC, remarked: “ITFC is committed to supporting Nigeria’s efforts in Islamic finance, tailoring this workshop to address the unique challenges faced. We will continue to provide the expertise and financial backing needed to grow Islamic finance in Nigeria and beyond.”
Over 30 professionals from the Central Bank of Nigeria, non-interest banks, and other financial institutions attended, further advancing Islamic finance in the country.
As Nigeria positions itself as a leading market for Islamic finance in Africa, ITFC remains dedicated to advancing trade finance and supporting the growth of the sector for long-term economic impact.
Distributed by APO Group on behalf of International Islamic Trade Finance Corporation (ITFC).
About the International Islamic Trade and Finance Corporation (ITFC):
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the primary objective of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving the socioeconomic conditions of the people across the world. Commencing operations in January 2008, ITFC has provided over US$75 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs. With a mission to become a catalyst for trade development for OIC member countries and beyond, the Corporation helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity-building tools, which would enable them to successfully compete in the global market.
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FINTECH
Kazang Pay launches card acquiring service in Zambia
Kazang (www.Kazang.com), the prepaid value-added services (VAS) and card acquiring business within JSE-listed fintech Lesaka Technologies, has launched its Kazang Pay card acceptance solution for merchants in Zambia. Kazang Pay makes it affordable for merchants to accept card payments on the same Kazang terminal they use to sell prepaid products and services.
The Kazang Pay enabled terminal in Zambia accepts VISA debit and credit cards as well as mobile wallet payments. Payments are settled to the merchant’s Kazang wallet on the same day. It’s as easy as letting the customer tap or insert their bank card and enter their PIN on the secure scramble PIN pad.
Kazang operates around 12,000 VAS terminals in Zambia. The goal is to enable the majority to accept card payments over the next six months. Benefits to merchants include low transaction fees and no monthly terminal rental fee for those that meet a modest monthly transaction threshold as well as the opportunity to grow their business through card acceptance.
Kazang is Zambia’s largest VAS point-of-sale terminal provider, enabling mobile money payments, bank and mobile money cash in and out, bill payments, airtime, Zesco, and many other prepaid services on one platform. The addition of card acceptance makes the platform even more comprehensive for merchants and consumers alike.
The launch of Kazang Pay in Zambia follows the introduction of the solution in South Africa, where around 60,000 small and micro merchants use Kazang Pay to accept card payments. In Zambia, there are around 3.8 million debit, credit and ATM cards in issue and 41,000 point of sale (POS) terminals in place. The value of POS transactions has grown to K 111.4 billion by 2022 from less than K 20 billion in 2018, according to the Bank of Zambia.
Says Leon de Wit, managing director at Kazang Zambia: “Zambia has made enormous strides in terms of financial inclusion, with card usage and penetration growing at a rapid pace. With Kazang Pay, merchants can now easily accept card payments on the same all-in-one terminal they already use for vending of VAS products.
“Card transactions help merchants to grow basket sizes and potentially attract more customers, and at the same time, reduce the risks and costs of handling cash. Moving towards digitalised payments will also enable merchants to track sales, manage cash flow, and create a footprint that could make it easier for them to access loans.”
Ashley Naidoo, director of Kazang Pay in South Africa says: “Our Zambian merchants have eagerly embraced our card acquiring service as a valuable part of our one-stop solution. Following the launch of Kazang Pay in Zambia, we have seen higher VAS sales across our merchant base and much-improved merchant retention and with our card acquiring solution we now appeal to a broader merchant base.”
Distributed by APO Group on behalf of Kazang.
ABOUT KAZANG:
Kazang (www.Kazang.com) is a leading provider of cash and digital solutions to merchants in Southern Africa’s informal economies. Our fintech solutions include a diverse range of value-added services (VAS), card acquiring, secure cash vaults and supplier payments platforms. Operating with a network of approximately 90,000 active devices, we process approximately 2.2 million transactions daily in markets such as South Africa, Namibia, Botswana, and Zambia.
We are dedicated to helping small and medium merchants grow and succeed, through increasing their sales, making their businesses more efficient and reducing their risks with its holistic portfolio of products and services. Kazang is a member of Lesaka Technologies (https://LesakaTech.com).
ABOUT LESAKA TECHNOLOGIES, INC:
The Connect Group and Kazang was acquired by Lesaka Technologies, Inc. in April 2022. Lesaka Technologies, (Lesaka™) is a South African Fintech company that utilizes its proprietary banking and payment technologies to deliver superior financial services solutions to merchants (B2B) and consumers (B2C) in Southern Africa. Lesaka’s mission is to drive true financial inclusion for both merchant and consumer markets through offering affordable financial services to previously underserved sectors of the economy. Lesaka offers cash management solutions, growth capital, card acquiring, bill payment technologies and value-added services to retail merchants as well as banking, lending, and insurance solutions to consumers across Southern Africa.
Lesaka has a primary listing on NASDAQ (NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock Exchange (JSE: LSK). Visit www.LesakaTech.com for additional information about Lesaka Technologies (Lesaka ™). $LSK / $LSAK
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