Introduction

In an exciting development for Nigerians, the diaspora can send remittances that their families back home can now receive in Naira, according to a new circular by the Central Bank of Nigeria (CBN). 

CBN had banned banks and International Money Transfer Operators (IMTOs) from paying recipients of diaspora remittances in Naira. 

Instead, the apex bank wanted only formal channels (banks) to transfer remittances to recipients as its now-suspended governor Godwin Emefiele implemented several policy measures to tighten regulations around foreign exchange (FX). 

CBN are, however, loosening the strict control over FX and have widened the options to Nigerians of receiving remittances in foreign currency, Naira or e-Naira. 

This article will discuss diaspora remittances to Nigeria and how Fincra can help fintechs simplify the processes. 

Diaspora remittances to Nigeria

With this new development, fintechs who work in the remittance space have an excellent opportunity to address the challenges that numerous Nigerians face in receiving diaspora remittances from their loved ones abroad. 

Nigeria, with its significant immigration trend and a substantial number of individuals sending remittances back home, presents a massive market for these remittance companies. 

In 2022 alone, Nigerians living abroad remitted an impressive $19.8 billion back home in Nigeria, emphasising the scale and importance of this market in Nigeria.

Let’s examine how important remittances are in a developing economy like Nigeria. 

Economic growth

Remittances contribute significantly to the country’s economic growth as a significant source of FX earnings which stabilises Nigeria’s balance of payments and ultimately helps the Naira. 

Poverty alleviation

Recent data suggest a 45% poverty rate in Nigeria, a very high level which, with easy and accessible remittance processes, can help reduce. People who receive funds from the diaspora can use them for basic needs like food, healthcare, education, housing and generally improve their living standards. 

Financial inclusion 

Financial inclusion is one of the drivers of economic growth as more people participate in the market. Remittances spur people outside the financial system to open bank accounts or mobile money wallets to receive remittances from their loved ones abroad.

Job creation/employment 

When people go beyond using remittances to cover basic needs, they use these funds to start or expand small businesses contributing to the local economy. These remittances create jobs and employment opportunities for business owners and anyone they employ. 

Social investments

In a developing economy like Nigeria, where government spending is not robust enough, remittances can fund social investments like healthcare, education, and infrastructure projects, especially in rural communities. 

Diaspora engagements 

Sending money back home is a way of engagement between the diaspora and those at home. Remittances ensure the diaspora maintains close ties with their home country and communities. This engagement can further lead to the transfer of skills and knowledge.

Fincra: The API to easy remittances

With this new development, remittance companies need local payment partners to facilitate payouts to customers, enabling smoother transactions and enhanced accessibility for both senders and recipients. 

For remittance companies seeking a local payment partner, Fincra has the perfect product to simplify diaspora remittances to Nigeria.

With Fincra Pay-Out, fintechs companies can send remittances directly to the recipient‘s bank accounts and mobile money wallets. 

With a single API, remittance companies can use Fincra to power convenience and reliability, ensuring that Nigerians can receive funds directly into their bank accounts or preferred financial institutions. 

This direct approach ensures quicker, more secure, and more reliable transactions, providing both senders and recipients peace of mind.

Conclusion

The availability of direct remittances in Naira through Fincra represents a significant milestone for Nigerians and their families abroad. 

This development holds immense potential for financial empowerment, economic growth, and improved living standards by simplifying the process and ensuring greater convenience and reliability. 

With Fincra’s APIs, remittance companies now have a valuable local partner to facilitate seamless transactions and contribute to the welfare of individuals and communities across Nigeria.

Checkout our API documentation for more details.