MoneyGram International (MGI - Free Report) recently signed an agreement with two postal services providers to improve its money transfer services in the African countries of Uganda and Tanzania.
The postal service providers are Uganda Post Limited (Posta Uganda), and Tanzania Posts Corporation (Posta Tanzania).
As per World Bank figures, Uganda has a population of 33 million, whereas inward remittances are about 775 million. On the other hand, Tanzania has a population of 44 million and inward remittances are around 17 million.
At present traditional banking facilities are not available at rural locations in Uganda and Tanzania and post offices there are mostly located in the outskirts. Thus the rural consumers in these countries don’t have proper access to money transfer services at places where banking conveniences are beyond reach.
Thus the entry of MoneyGram in these locations through post offices is expected to be a boon to this population. Using MoneyGram’s services, people will be able to transfer and receive funds conveniently and safely in these suburban locations.
We expect the deal with Posta Uganda and Posta Tanzania to bolster the client base of the company thereby helping MoneyGram generate more business and improve revenues further.
Earler, in Apr 2013, MoneyGram fortified its African operations through its alliance with a leading South African Bank– First National Bank (FNB). The deal allows FNB account holders to send and receive money transfers using their mobile devices and the bank's huge ATM network.
MoneyGram currently carries a Zacks Rank #3 (Hold). Other stocks like Moody’s Corp (MCO - Free Report) carry a favorable Zacks Rank #1 (Strong Buy) whereas Financial Engines Inc. (FNGN - Free Report) and SS&C Technologies Holdings Inc. (SSNC - Free Report) carry a Zacks Rank #2 (Buy) and are worth noting.