When the coronavirus epidemic broke out in 2020, projections quickly painted a grim picture for remittances in low and middle-income countries. Due to the feared economic implications of the global health crisis, a huge drop was predicted for developing markets. 

But the realities that unfolded starkly contradicted forecasts. Defying predictions that it would drop by 20 percent in the [said] year, remittances slowed down only by 1.6 percent. Regardless of the pandemic’s effect on wages and employment in other parts of the world, LMICs received USD 540 B; in 2019, they absorbed USD 548 B. 

Meanwhile, in some markets, growth was recorded. A classic example is Kenya, which saw its remittances increase by 10 percent from USD 2.796 B in 2019 to USD 3.095 B in 2020, representing 3 percent of the East African country’s GDP, according to data from its central bank. In 2021, its remittances reached an all-time high of USD 3.7 B. 

At the height of the pandemic, Kenyans living abroad sent home more Money than ever, thanks to [the] increased innovation efforts in the market’s financial industry. Fintech startups, in particular, have set up rails enabling convenient cross-border financial transactions between families. 

The adoption of Mobile Money technology has majorly contributed to the increase of remittances, in Kenya and [some] other sub-Saharan African countries alike. However, the cost of transactions over the last decade remains lower than the SDG-recommended target of 3 percent. 

This slight deficit, among a host of others, has necessitated the emergence of fintechs challenging the dominance of Safaricom’s M-PESA, a service celebrated as one of the world’s most successful Mobile money projects. The upstarts—as part of a larger collection of fintechs trying to reimagine Kenyan fintech—have taken an interest in the country’s billion-dollar remittances industry. 

Brian Muriu (CEO) and Alistair Gould (COO) co-founded BFA Catalyst Fund-backed, Nairobi-headquartered Tulix in 2020 to build healthy financial relationships between Kenyans—and subsequently Africans—in the diaspora and those back home. 

In an exclusive interview with WeeTracker, Brian and Alistair (right to left) reveal how the resurging local fintech industry is making a mobile money-driven run for Kenyan remittances, ultimately transforming the segment. 

What inspired you to start Tulix and what gap in the market did you see that you wanted to fill? 

Brian: Money relationships are very complex, especially for Africans. 

Our first insight came when we realized how Africans living in the diaspora found it challenging to make payments to local businesses using mobile money and in addition, collaborate with their beneficiaries on the usage of the money they send to them. 

We started Tulix to give Africans globally access to mobile money for merchant payments and also provide a means to see, co-determine with their people, or determine directly how funds will be spent.

Doing this increases accountability and transparency to unlock the full potential of these funds by eliminating fraud, extra transaction fees, and other costs related to getting the money to the end recipients which are businesses. 

​Kenya has been a leader in the mobile money space with M-PESA, how are startups like Tulix differentiating themselves? 

Brian: M-PESA has been in operation for the last 16 years and is part of the fiber of Kenyan society providing money transfer, merchant payments, and micro-finance services. 

It forms a key part of the payments infrastructure in Kenya and has well-developed APIs that make it possible to innovate new services tailored to various customer segments. One way we’re using such APIs is by making mobile money payments globally accessible. 

Tulix is specifically serving diaspora customers who do not have local mobile numbers needed to access M-PESA [in order] to seamlessly make instant payments to local businesses from anywhere in the world. 

​What are the challenges faced by Kenyans when sending and receiving remittances and how can mobile money fintech startups address them? 

Brian: For senders, direct bill payments to local individuals and businesses are now possible at lower rates. They also now have visibility into how beneficiaries utilize [their] funds.  

The beneficiaries can disburse bills and utilities; mobile money integration makes this convenience possible. The processes involved in accessing funds are faster with services like biometrics, especially for repeat customers. 

Applications have been built to allow senders to make payments from anywhere in the world to any Kenya-based business with a till or paybill number. Before now, such rails were not available; it was complex for both senders and beneficiaries. 

COVID-19 pandemic impacted the demand for remittance services in Kenya. Can you speak to why that happened?

Alistair: When the world expected a drastic drop in money sent home during the pandemic, Kenyans living in the diaspora sent on average KES 6.75 billion weekly in 2020 and increased this to KES 8.11 billion every week in 2021. 

With the current rising cost of living, Kenyans are sending more money than before so the frequency and amount of remittances are now guided by the day-to-day needs of people back home rather than end-month salaries. 

As such, both senders and receivers want a fast, easy, and convenient way to repeatedly make transactions. 

​Has the regulatory landscape in Kenya impacted the growth of the mobile money industry and what changes do you hope to see? 

Alistair: Yes. The regulatory landscape has favored mobile money growth and acceptance, especially for businesses. Specialized financial services are now possible as more people and businesses adopt mobile money to transact hence why Tulix exists. 

​Has the adoption of mobile money in Kenya impacted the remittance market, and what trends have you observed? 

Brian: Kenya was an early adopter of mobile money and this resulted in a push for most financial transactions including diaspora remittance to also be available this way. 

Globally, Gen Z prefers the use of apps for their various day-to-day activities and this has forced financial institutions in US, Europe & Asia to provide mobile apps that they can use. In turn, this has bridged the mobile money gap between countries with senders and those with receivers.  

​Mobile money fraud is becoming a concern. Are upstart fintechs in the space addressing the problem properly? 

Alistair: Startups can only implement and regularly update safety measures at their level for their direct customers. Mobile money operators play the biggest role in securing their [own] payment rails guided by regulators who set the tone for all players within the ecosystem.  

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