Many of us here on LinkedIn are so consumed by our #firstworldproblems (e.g. spotty wifi) that we forget that 750 million people live on less than $2 a day.
YOU should CARE about this if you are from wealth or asset management.
There is a vital flow of immigrants sending money back to their original homes to help families pay the bills, that in turn helps fuel our world economy, people’s education and ability to live. But people lose more than half their hard-earned money when remitting funds to Africa.
Today I am talking with Louis-Antoine Muhire (@muhirela), Founder of MERGIMS (www.mergims.com), a startup I met at the recent Finals of Kickstart Accelerator Zürich. MERGIMS is busy solving what started as a personal problem but became a community problem. 💥 🚀
How can we pay basic services for migrants and refugees and control the process?
Q: What are the problems with transferring money to Africa?
From inefficiency, bureaucracy, banking fees to outright robbery, poor people trying to do the right thing are faced with mountains of challenges to put their money to work. The first problem is really ugly – people lose up to half their money on:
- The government, which taxes people’s remittances
- The money-senders, who charge 10% or more fees
- The intermediaries, who employ unfavourable conversion rates
- The robbers, who typically lie waiting near the local cash-remittance shops
But there is a secondary, more fundamental problem. People often mis-use the moneyfor other things than it was intended for. A recipient might typically pay their overdue phone bill or rent first, before their education bill which was the primary reason for transfer. All this cries for a smarter, digital solution.
Everything is prepaid in Africa!
MERGIMS enables directly paying people’s telecommunications, education, grocery bills – things that MATTER locally. The goal is to have high impact and keep costs really low.
Q: Why should I care about this, coming from wealth management?
Impact funds are very in because wealthy people want to do good and invest in products that give back. Louis-Antoine is looking to partner with micro-finance or wealth managers who are ramping up their Impact offerings. There are tax advantages on both ends of the transaction being worked out, and the team already have 25,000 customers on the platform and seeking $500k seed funding to grow even faster. It takes the team 48 hours to onboard a vendor and they have four guys on the ground locally in the markets they are growing. Traction Time!!
Q: Can we see how this works?
Sure! We added in footage with a live demo from 20:45 so you can check it out!
Look, if it wasn’t for Banks we would all still be living without paved roads, internet and running water. So to me startups like MERGIMS really matter because they are using banking infrastructure to solve real-world problems and we all can help support that to grow.
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