Opinion and Analysis
Streamline cash transfer
Posted Wednesday, January 30 2013 at 18:21
Whereas Kenya should be commended for having the lowest international money transfer charges in Africa, there is still room for it to achieve a greater competitive edge and lowering the cost even further.
According to the World Bank, whereas it costs about 9.2 per cent of the total sum to send money from abroad, in Asia, the rate is about seven per cent while in countries like Saudi Arabia, it is even lower at 4.7 per cent.
What this means for authorities in Kenya is that with better and more efficient systems and if concerns like the risks associated with money laundering and fraud are addressed, there is potential to bring the cost much lower.
The net effect of such a drop would be a boost in remittances which can be used to fund private and public development projects while cushioning the shilling from fluctuation against other currencies like the dollar or pound as happens so often.
By streamlining services like M-Pesa and card-based money transfer systems, Kenya can gain more as it will facilitate not only remittances but also e-commerce whose cornerstone is a secure and affordable money transfer system that ensures that sellers get their money after buying receive their supplies.
Besides ensuring that Kenya has laws to facilitate money transfers, the enforcement of punishment for crimes like money laundering should be seen to be more robust.