Uganda: Dahabshiil Elbows Its Way Into Money Transfer Market

[Adan_1]

Uganda: Dahabshiil Elbows Its Way Into Money Transfer Market

INCREASED capital inflows from Ugandans abroad have attracted another player in the money transfer service market to start up business in Uganda, an investment that is expected to push service prices down.

Dahabshiil, an international money transfer service, is finalising its establishment in Kampala having registered with Bank of Uganda in May. It brings to six the number of money transfer service providers in Uganda after Western Union, Money Gram, Xpress Money, Simba Cash and Posta Uganda excluding banks and microfinance institutions that have countrywide branches.

Its entry into the market is expected stimulate price cuts amongst players in a market, teaming with both international and local money transfer heavyweights. Mr Ismail Duale, the director of Dahabshiil Uganda, said the company was drawn to the market by the high demand for its worldwide services by Ugandans living in Europe, Asia and the US.

[Aerosmith]

Adan - Dahabshiil will not be able to produce a serious market entry among the ethnic Ugandans, corporate or for that matter majority of Ugandans unless it partners with an established local bank or micro financial institution. That itself will be a problematic as they will be required to provide a large equity for deposit. A good bet is Kenya-Uganda money wire market, although this too has its problems with the acquisition of Uganda Microfinance Limited (UML) by Kenya's Equity Bank. Equity Bank is by far the most aggressive local bank here in Kenya, known to outmaneuver even multinationals like Barclays Plc.

A good bet is for them to solidify their existing market(hawala) by providing their existing clients and prospective ones with value added services like money transfer via mobile phone. Obopay(https://www.obopay.com/) is in trial phase currently in US with this service and this is an ideal time to approach them for partnership. The US/Canada and to an extent Europe being its large wiring bases will be ideal. Infact the whole mobi-pay banking will take off all over the world in a few years. The same can be applied in Somalia by partnering with a local cellular provider.