Remittance startup, LemFi, has suspended its operations in Ghana. The startup disclosed this in a statement on Tuesday afternoon.
“We regret to inform you that we are suspending all services to Ghana. As a result, you will be unable to send money to banks and mobile money,” a part of the statement read.
Prior to this development, the Bank of Ghana had on Thursday, November 16, 2023, released a list of unapproved money transfer organisations, which included Lemfi. In its statement, the apex bank warned Ghanaians and concerned financial institutions to cease all transactions with the affected companies. Failure to comply, it said, would result in severe sanctions including licence withdrawals.
In reference to section 3.1 of the Foreign Exchange Act, 2006, the Bank of Ghana maintained that no entity was authorised to carry out foreign exchange transactions without a licence granted by the Act.
Founded in 2020 by former OPay employees, LemFi offers remittance services to Africans in the diaspora. Users can hold, send, and receive money in at least two currencies — that of their host country and home country.
The three-year-old startup has raised capital from investors such as Y Combinator, Microtraction, and Ventures Platform. In August 2023, it announced a $33 million Series A, which it intends to use in financing an expansion drive.
The startup also acquired an International Money Transfer Licence (IMTO) in Nigeria, allowing it to process remittances to Nigerian bank accounts without an intermediary. It also acquired Rightcard Payment Services, a UK-based fintech. The acquisition gives it the ability to offer increased security to customer funds while allowing larger transactions.
It is unclear when the startup launched in Ghana and the extent of its operations. However, this blog post suggests that it began enabling transfers to Ghana in January 2023. This development is yet another reminder of the constant tension that exists between regulators and innovators in Africa.
