Africa Cross-Border Finance: Beyond Remittances

By Hamse Abdi Ibrahim

Why the next chapter of African cross-border finance is about more than sending money home

For decades, remittances have been one of the most important financial links between Africa and its diaspora.

Millions of Africans living in Europe, North America, the Middle East and elsewhere send money to relatives, communities and businesses across the continent. These flows support household consumption, education, healthcare, housing and, increasingly, economic activity.

But the role of cross-border finance is changing.

The next opportunity may be considerably larger than remittances alone: building financial infrastructure that connects African households, entrepreneurs and businesses with markets, capital and commercial opportunities across borders.

The question is no longer simply how efficiently money can be sent home. It is how financial companies can help connect African communities abroad with the wider economies of the continent.

Africa’s remittance economy is becoming strategically important

The scale of the opportunity is substantial.

The African Development Bank estimates that remittances to Africa reached approximately $104.6 billion in 2024, making them one of the continent’s most important and stable sources of external finance.

World Bank data also show that remittances remain a significant component of external financial flows to Sub-Saharan Africa, with personal remittances received equivalent to approximately 3.2% of regional GDP in 2024.

These numbers point to something larger than a money-transfer industry.

Remittances create financial relationships between people, households and economies across borders. Those relationships can potentially become foundations for wider payments, trade, savings and investment.

The African Development Bank has also highlighted the wider contribution of the diaspora, including investment, skills, expertise, technology transfer and entrepreneurship.

The opportunity, therefore, is not to replace remittances, but to build additional financial services around the cross-border relationships that remittances have already created.

This evolution is part of a broader transformation of African financial services. As AfricaBusiness.com has previously examined, mobile-first fintech platforms are increasingly developing beyond basic payments toward wider digital financial ecosystems.

The cost and complexity of cross-border payments remain significant

Despite rapid technological development, international payments remain more complicated than domestic payments.

The Bank for International Settlements notes that the G20 programme for improving cross-border payments is focused on making international payments cheaper, faster, more inclusive and more transparent. Interoperability and reducing fragmentation between payment systems remain important parts of this agenda.

This challenge is particularly relevant to Africa.

The latest available World Bank Remittance Prices Worldwide data show that Sub-Saharan Africa remains the world’s most expensive region for receiving remittances. In the third quarter of 2025, the average cost of sending $200 to the region stood at approximately 8.46%.

Lowering these costs is therefore not simply a consumer issue. More efficient cross-border payments can support financial inclusion, international trade and regional commerce.

AfricaBusiness.com has previously explored how fintech is supporting financial inclusion and cross-border remittances in Sub-Saharan Africa, including efforts to reduce costs and make transfers safer and more accessible.

From remittance providers to financial connectivity platforms

A traditional remittance business solves one central problem: moving money from one country to another.

But the needs of diaspora customers are broader.

A customer living in Europe or North America may want to:

• send money to family;
• pay school or medical expenses;
• pay an African supplier;
• support a small business;
• purchase goods or services;
• invest in property;
• contribute to a community project;
• save; or
• invest in an African enterprise.

These activities represent different financial needs, but they are connected by the same underlying relationship: a person or business operating across borders.

This creates the possibility of moving from a transfer model toward a financial connectivity model.

That does not mean every remittance company should become a bank.

Instead, remittance companies, banks, fintechs, mobile-money providers and payment institutions could increasingly work together to provide complementary services, subject to licensing and regulatory requirements.

Dahabshiil as one case study

One example of this evolution is Dahabshiil, a financial services company with roots in Somaliland and the wider Horn of Africa.

According to company-published information, Dahabshiil was established in Burao in 1970. The company says that it developed a remittance network during the displacement caused by conflict in the late 1980s and expanded across the Horn and East Africa during the 1990s. It also states that Dahabshiil Transfer Services was established in the United Kingdom in 1998 and that the business subsequently expanded its network across Europe and the United States.

Dahabshiil’s own current materials describe services and operations spanning multiple markets and state that its international transfer network reaches more than 100 countries.

These are company-reported facts rather than independent estimates and should be understood in that context.

The significance of the example is not simply the size of one company.

It illustrates how an African-origin financial business can develop around the needs of a diaspora community and eventually create financial connections linking African markets with customers and institutions overseas.

The broader trend, however, extends well beyond Dahabshiil.

Across Africa, banks, fintech companies, mobile-money operators and payment providers are exploring ways to connect domestic markets with international customers, businesses and capital.

Diaspora money could support more than household consumption

Remittances are often associated with household consumption, and this remains their essential function.

Families use remittances to pay for food, housing, education, healthcare and other necessities.

But the same financial networks can potentially support productive economic activity.

African Development Bank research on remittances has examined how diaspora financial flows can contribute more broadly to Africa’s development and how their productive use could be increased.

Diaspora investment

Financial institutions could develop appropriately regulated investment products that allow members of the diaspora to invest in businesses and projects in their countries of origin.

SME finance

Diaspora networks could become a source of capital and commercial relationships for African small and medium-sized enterprises.

Trade finance

Payment providers could increasingly support transactions between African companies and suppliers or customers in Europe, North America and other international markets.

Property and infrastructure

Appropriately regulated financial structures could allow diaspora savings to participate in professionally managed property or infrastructure projects.

Digital financial services

Customers who initially use a company to send money could potentially access additional services such as payments, savings, insurance or investment products where regulation permits.

The important distinction is that these are opportunities, not guaranteed outcomes.

Their success would depend on regulation, consumer protection, market demand, risk management and the quality of financial infrastructure.

The potential importance of fintech as infrastructure is also becoming more visible across Africa. Investment in African fintech can create effects extending beyond financial services by supporting entrepreneurship, SMEs and access to wider economic infrastructure.

Africa-Europe-North America: a three-continent financial opportunity

Europe and North America are particularly important because they contain large African diaspora communities and significant pools of financial capital.

The relationship between these regions and Africa is already multidimensional.

• People: African migrants and diaspora communities.
• Money: Remittances and personal transfers.
• Business: Importers, exporters, entrepreneurs and SMEs.
• Knowledge: Professional expertise, technology and networks.
• Investment: Private and institutional capital.
• Payments: The infrastructure connecting these activities.

The next phase of cross-border finance could connect these elements more closely.

Consider an African entrepreneur living in Europe.

Their financial relationship with Africa may begin with sending money to family. Over time, however, the same person may want to pay an African supplier, purchase property, invest in a business or establish a company serving customers in both markets.

Financial infrastructure that can safely and efficiently support these activities could become increasingly valuable.

Technology is an enabler, not the entire solution

Digital technology has transformed the way people send money.

But technology alone cannot solve the structural problems of international finance.

The BIS’s work on cross-border payments continues to emphasise interoperability, common standards and cooperation between payment systems as important elements of a more efficient international payments environment.

For African financial companies, this means that future growth will require more than mobile applications.

It will require:

• strong regulatory relationships;
• effective customer identification and compliance systems;
• transparent foreign-exchange pricing;
• partnerships with banks and payment institutions;
• interoperable payment infrastructure;
• cybersecurity;
• consumer protection; and
• reliable governance.

Trust may ultimately become one of the most valuable assets in cross-border finance.

This is particularly important because the infrastructure supporting cross-border transactions faces growing technological and security demands. AfricaBusiness.com has also examined why securing cross-border financial flows matters as payment volumes and digital complexity increase.

Regulation will determine how far the opportunity can go

Moving from remittances into broader financial services creates additional regulatory responsibilities.

Companies operating across several jurisdictions must navigate different licensing requirements, anti-money-laundering obligations, sanctions rules, consumer-protection requirements and data regulations.

This means the future of African financial connectivity should not be viewed simply as a race to build the largest digital platform.

It should be a race to build the most trusted, compliant and interoperable financial connections.

For African companies seeking partnerships with European and North American institutions, governance and regulatory credibility may become as important as customer reach.

The opportunity for African financial companies

The potential business model can be expressed simply:

Remittances + payments + trade + investment + diaspora networks = financial connectivity.

This represents a significant shift in perspective.

Instead of asking only:

“How much money can we transfer?”

financial companies can increasingly ask:

“What economic activity can we enable across borders?”

The second question opens a much larger market.

What comes next?

The future is unlikely to belong to a single company or a single technology.

It is more likely to emerge through partnerships between African financial institutions, fintech companies, banks, governments, regulators, international payment networks and diaspora communities.

Africa already has an enormous network of people living and working outside the continent.

The challenge is to connect that human network more effectively with Africa’s businesses, financial institutions and investment opportunities.

The evidence suggests that the opportunity is significant. Remittances are already one of Africa’s most important external financial flows, while the diaspora represents a broader source of capital, expertise, commercial relationships and international networks.

If African financial companies can build trusted bridges between these communities and markets, remittances could become the first layer of a much larger financial ecosystem.

The next chapter of African cross-border finance may therefore not simply be about sending money home.

It may be about connecting Africa to the world — and connecting the world to Africa.

Sources and Information

1. African Development Bank — African economic and remittance data, including analysis of diaspora financial flows.
2. World Bank Data — Personal remittances received (% of GDP), Sub-Saharan Africa.
3. World Bank Remittance Prices Worldwide — international remittance cost data.
4. Bank for International Settlements / CPMI — G20 programme for enhancing cross-border payments.
5. Dahabshiil — company-published information concerning its history, services and international operations.

Image credit: Photo courtesy of Hamse Abdi Ibrahim

Author’s disclosure

This article is an independent contribution by Hamse Abdi Ibrahim.

It has not been commissioned by, prepared in cooperation with, or submitted on behalf of Dahabshiil or any company affiliated with the Dahabshiil Group.

References to Dahabshiil are included as a case study within a broader analysis of African cross-border financial connectivity. Information specifically concerning Dahabshiil’s history, operations and international footprint is based on company-published information where indicated. The analysis of future opportunities and potential developments represents the author’s own analysis and should not be interpreted as statements or forecasts made by Dahabshiil.