Unaitas becomes the first sacco to partner with MoneyGram

Unaitas Chief executive officer Tony Mwangi. He said the SMEs lender will list in the Nairobi  bourse in 2018. PHOTO | FILE
Unaitas Chief executive officer Tony Mwangi. PHOTO | FILE 

Financial services firm Unaitas has become the first Sacco in Kenya to directly partner with MoneyGram, giving it access to the foreign exchange business.

Unaitas will directly earn commissions from transactions unlike other micro-lenders who have to part with commissions since they are signed up through commercial banks which have agreements with the international money transfer service provider.

The agreement is expected to create a new revenue stream for the lender that plans to convert into a bank.

“Unaitas will directly access 20 per cent agency commission from every income accruing from a transaction. In addition, we will also get 20 per cent of every forex gain,” said Unaitas head of operations Nyaga Thagichu.

“Unaitas will also have authority to appoint other agents in Kenya, the same way banks appoint Saccos, and get the primary commissions on all transactions through such agents.”

Kenyan diaspora

The financial services firm said it is targeting Kenyans in the diaspora who can be a source of long-term deposits which offer an affordable source of funds for the micro-lender.

Kenyans living abroad have invested heavily in the Sacco. “Many Kenyans abroad send money back home, not necessarily to anyone, but to their own account to await when they eventually return back home, or for transactions which sometimes take long to materialise or don’t go through e.g. land purchase… such monies provide very long term-deposits without such heavy cost burden as is the case for fixed deposit,” said Mr Thagichu.

Data from Central Bank of Kenya (CBK) shows diaspora remittances rose to Sh154 billion last year from Sh141 billion in 2014, a nine per cent increase.

Commercial banks and mobile money service providers are also partnering with cash transfer agents to muscle in on commissions from the billions that Kenyans in the diaspora send home.

MoneyGram, the world’s second-largest money transfer company, entered into an agreement with Safaricom in early 2014 to allow users of MoneyGram in about 200 countries to send money directly to Safaricom’s M-Pesa.

Bharti Airtel and IDT Corporation, an American remittance company, have also signed a deal that will allow Kenyans in the diaspora to directly send money through Airtel’s mobile money transfer service.