Kuda Bank's Strategic Expansion into Tanzania and Canada: Unlocking High-Growth Potential in the African Diaspora Remittance Market

The African diaspora remittance market is a cornerstone of economic development across the continent, with inflows projected to grow at a robust pace through 2025 and beyond. For fintech innovators like Kuda Bank, this represents a golden opportunity to capitalize on a sector poised for disruption. By securing payment licenses in Tanzania and Canada, Kuda is strategically positioning itself to tap into two high-potential corridors of the diaspora remittance ecosystem, leveraging digital innovation to reduce costs, improve efficiency, and foster financial inclusion.

The Remittance Market: A Booming Opportunity

Global remittance flows have demonstrated remarkable resilience, with the market size expected to expand from $828.46 billion in 2025 to $879.24 billion in 2026, reflecting a compound annual growth rate (CAGR) of 6.4%. Africa, in particular, has seen a surge in remittance inflows, rising from $53 billion in 2010 to $95 billion in 2024. While specific data for Tanzania and Canada remains sparse, the broader trend of increasing remittance flows underscores the untapped potential in these markets.

In Tanzania, remittance inflows surged by 34.7% in 2024, driven by a diaspora spread across the UK, EU, and North America. Meanwhile, Canada's digital remittance market is forecasted to grow at a blistering 16.7% CAGR from 2025 to 2030, reaching $1.736 billion by 2030. Outward digital remittances already account for 64.76% of the market in 2024, highlighting the shift toward digital solutions. These trends align with Kuda's core strengths in digital financial services.

Kuda Bank's Strategic Moves in Tanzania and Canada

Kuda Bank's expansion into Tanzania and Canada is underpinned by a dual strategy: securing local regulatory licenses and deploying tailored digital solutions to address pain points in the remittance value chain. In Tanzania, Kuda operates as a Payment Service Provider (PSSP), offering inbound remittance services to the Tanzanian diaspora at an average cost of 6.35%-significantly lower than the sub-Saharan Africa average of 9%. This positions Kuda to capture market share from traditional providers while supporting both personal and business transactions.

In Canada, Kuda is targeting the large African diaspora, particularly Nigerians, with a multi-currency digital wallet. The platform allows users to send money home with competitive fees and manage USD, GBP, EUR, and CAD within the app. With over 100,000 Nigerians in Canada and Nigeria as the fourth-largest source of immigration in 2022, Kuda's entry into this market is both timely and strategically aligned with demographic realities. The service, set to launch in Q3 2024, aims to streamline cross-border transactions and reduce reliance on intermediaries.

Learning from Past Challenges, Building for the Future

Kuda's approach to expansion is informed by lessons from its earlier ventures. A prior attempt at cross-border remittances was abandoned due to reliance on third-party infrastructure and low profit margins. To avoid this, Kuda is now building integrated in-house systems, which will enhance control over operations and improve margins. The company also plans to support U.S. and Canadian dollars within six months, further solidifying its position in these markets.

This strategy contrasts with competitors like LemFi, Eversend, and Nala, who rely on partnerships with traditional banks or third-party platforms. By embedding remittance services directly into its ecosystem, Kuda can offer a seamless user experience while capturing more value from each transaction.

Competitive Positioning and Market Potential

The diaspora remittance market in Africa is highly competitive, but Kuda's focus on cost efficiency, digital innovation, and regulatory compliance gives it a distinct edge. In Tanzania, the company's PSSP license enables it to bypass traditional banking bottlenecks, offering faster and cheaper transactions. In Canada, its multi-currency wallet addresses a critical need for flexibility among users who often juggle multiple currencies.

Moreover, Kuda's expansion aligns with global trends in remittance digitization. The average cost of sending $200 to sub-Saharan Africa remains stubbornly high at 9%, far exceeding the Sustainable Development Goal (SDG) target of 3%. By leveraging fintech and blockchain solutions, Kuda can reduce these costs, making remittances more accessible to low-income users while improving its own margins.

Investment Implications

Kuda's strategic expansion into Tanzania and Canada is not just a geographic play-it's a calculated move to dominate a high-growth segment of the African diaspora remittance market. With the global remittance market projected to reach $270.81 billion by 2032, and Africa's share expected to grow alongside rising diaspora populations, Kuda is well-positioned to scale its operations profitably.

For investors, the key metrics to watch include Kuda's ability to reduce transaction costs below industry averages, its user acquisition rates in these markets, and the speed of regulatory approvals for new services. The company's focus on in-house infrastructure and multi-currency support also signals long-term sustainability, reducing exposure to third-party risks.

Conclusion

Kuda Bank's expansion into Tanzania and Canada exemplifies a forward-thinking approach to the African diaspora remittance market. By addressing inefficiencies in cost, speed, and accessibility, the company is not only enhancing financial inclusion but also building a scalable, profitable business. As remittance flows continue to grow, Kuda's strategic investments in digital infrastructure and regulatory compliance position it as a formidable player in a sector ripe for disruption.