Pan-African fintech startup that enables users to send and receive money from over 12+ countries in Africa, LemfFi, has suspended its operations in Ghana, citing regulatory issues.
Announcing the company’s decision to suspend operations in Ghana, it wrote on X,
“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 in Ghana. We recognize that this change will bring about some inconvenience, and we sincerely apologize. We are appreciative of your business and your support. If anything changes in the future, you will be the first to know.”
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LemFi’s suspension of its services in Ghana is coming after the Central Bank of Ghana on November 16, 2023, released the list of eight remittance providers that are operating in the country’s foreign exchange market without regulatory approval.
LemFi was among the startups on the list, with several others which include; Wise, TransferGO, Xoom, Sendvalu, Boss Revolution, Aza Finance and Supersonicz.
The Central Bank’s notice referred to Ghana’s Foreign Exchange Act, 2006 (Act 723), which strictly prohibits foreign exchange dealings without the required licensing. Operating without a license, as outlined in Section 29.1 of the Act could lead to fines or imprisonment.
The bank claimed that LemFi and other international money transfer companies are not licensed or authorized to operate as electronic money issuers or payment service providers in Ghana.
The suspension means that customers cannot use LemFi and other international money transfer companies to send or receive money to Ghana.
The Secretary of Ghana’s Central Bank, Samdra Thompson therefore ordered all financial institutions in the country to desist from operating with the aforementioned published companies.
In her words,
“Approved IMTOs are hereby reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all guidelines in respect of their operations”.
Meanwhile, in May this year, following LemFi’s rebrand, Ghana news agency in a report, stated that the company has contributed immensely to the growth of the country’s fintech sector.
The suspension of LemFi’s operations in Ghana due to regulatory impediments will no doubt pose several potential impacts on users in the country, as some of them who rely on LemFi for financial services may experience a sudden disruption in their access to the platform.
LemFi, formerly Lemonade Finance, was founded in 2020, with a vision to empower immigrants seeking to achieve more. The company delivers its services through an app that enables users to send money to more than 12 countries across Africa.