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Nigeria Remittance Market is worth over $10bn annually – Pam Patsley

Pam Patsley, Chairman &Chief Executive Officer of Moneygram International, visited Nigeria recently as part of  efforts to gain a better understanding of the market, customers and different cultural practices.
In a chat with Princewill Ekwujuru and Moses Nosike,  she posits that money transaction volume has increased six times in the first quarter. Read on.

How long has MoneyGram been operating in Nigeria?

MoneyGram started operating in Nigeria in 1998 and has steadily expanded its network of well established and respectable banks.

Pam Patsley

How well is MoneyGram doing financially?

Looking at the overview of Q1 of 2010 results., money transfer transaction volume increased by six percent, with money transfer fee and other revenue increasing 7 percent in the first quarter of 2010 versus prior year. On a constant currency basis, money transfer fee and other revenue increased 4 percent versus prior year.

Total revenue in the first quarter grew 3 percent to $288.9 million, compared with $279.9 million in the same period last year. Fee and other revenue grew 5 percent to $280.9 million, while investment revenue decreased to $5.6 million in the first quarter as compared with $11.7 million in the prior year.

Net income for the quarter was $10.8 million and EBITDA was $57.3 million. Both net income and EBITDA were impacted by $6.9 million of stock-based compensation partially offset by $2.4 million of net securities gains.

Adjusted EBITDA for the quarter was $61.7 million versus $66.1 million in the prior year. First quarter of 2010 adjusted EBITDA reflects lower net investment revenue of $5.9 million compared with the same period in 2009.

What will be MoneyGram’s key focus for the rest of 2010 be?

MoneyGram is off to a good start in 2010.  We grew money transfer transaction volume, increased revenue and created important partnerships with industry leaders like Visa, Fiserv and Smart. We delivered more value and added convenience to existing consumers and expanded our reach to new consumers with the introduction of several new products. We also launched our enhanced website, expanded our global Rewards program and continued to increase our global agent network.

Our focus continues to be on making the right decisions for the long term as we continue to deliver solid performance in the short term.  We are committed to improving margins, generating cash to pay down debt, and capturing operating efficiencies as we seek to create profitable, sustainable growth and long-term shareholder value.

In 2010, we will continue executing against our corporate priorities, to: Pursue profitable, global growth., focus on operating efficiencies to drive margin expansion, Invest capital prudently, emphasize driving free cash flow and Pay down debt

What is your assessment of the Nigeria Remittance Market?

Information we have indicates that the Nigeria Remittance Market is worth over $10bn annually. We believe the market shrank a little in 2009, as a result of the global economic crisis and its effects on employment statistics for migrant workers in key corridors. With the easing of the financial crisis, especially in the US, we expect remittances to Nigeria will experience positive growth.

Our business has experienced good growth both in terms of number of transactions, value and our network. We have been able to achieve this modest growth thanks to the support of our agent banks. With new agents and additional network, we expect our business in Nigeria to grow tremendously in the coming years.

How significant is the First Bank launch of MoneyGram service? Will MoneyGram be signing any more agents in Nigeria?

We are happy to have signed on First Bank and to have the MoneyGram service delivered through an additional 500 First Bank locations nationwide. This will make the MoneyGram service more accessible and convenient to many more customers.

In many markets where we operate, any new agent brings in its wake increased transaction growth and we expect this to be the case with First Bank.

MoneyGram will continue to forge alliances with credible financial institutions as the laws of Nigeria allow to bring our services even closer to our customers. They are a few more agreements in the pipeline which should be concluded over the next couple of months.

What is MoneyGram doing in the area of fraud prevention in Nigeria?

MoneyGram has initiated key actions to combat fraud in Nigeria; Key amongst them are;
Successfully implemented the locking down of a transaction to the location that first viewed

Have added as compulsory a receiver questions for all our transactions in Nigeria to provide additional security
We continue to provide periodic compliance training for the compliance officers and product managers of all our agents.

MoneyGram’s Director of fraud from the U.S. visited Nigeria in April this year,, organizing workshops for all our agents in Nigeria and also meeting with enforcement agencies to presents MoneyGram’s anti-money laundering and compliance efforts

The Regional Compliance Manager for Africa  also visited Nigeria to meet with the EFCC (law enforcement agency) and the agents and present MoneyGram’s efforts on anti-money laundering and compliance generally. The feedback from both events has been very positive.

MoneyGram is also working with agents to restrict locations that pay out fraud induced transactions.
We continue to collaborate with key regulatory authorities i.e. Central Bank of Nigeria, Economic and Financial crimes commission (EFCC) and Special Fraud Unit (SFU).


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