World Bank unveils online portal to ease diaspora remittances
The cost of sending remittances to and within Africa could come down thanks to a new online database that will compare costs among money transfer service providers.
Send Money Africa, which the World Bank and the African Union launched on Thursday, would help migrants to compare the charges of sending money to a given country by different service providers.
As a result, senders and recipients would benefit from transparent, efficient, less costly remittance services.
“Send Money Africa will stimulate competition among the service providers and ultimately induce a reduction of the costs,” said Richard Cambridge, manager of the Africa Diaspora Programme in the World Bank’s Africa region.
Diaspora remittances to Kenya totalled $643 million (Sh64.3 billion) as at September, 39.5 per cent higher than the amount received in the same period last year and $2.1 million more than remittances of $641 million last year.
This means that a significant amount was spent to remit the money home since the average cost of sending money to Africa is more than 10 per cent of the amount sent, compared to a global average cost of nine per cent.
The World Bank estimates that about 120 million people in Africa receive a total of $40 billion a year from about 30 million relatives and friends who left their home country.
However, when it comes to choosing which operator to use to send money to Africa, too often migrants do not have the necessary data to make an informed choice.
According to the World Bank ‘Remittance Prices Worldwide’ database, Africa is the most expensive region of the world to send money to.
Remittances are a crucial in uplifting the standard of living among poor households.
Reduction in the cost of the transfer would result in more money remaining in the pockets of the migrants and their families.
At present, Send Money Africa provides data on the cost of sending and receiving relatively small amounts of money (the equivalent of $200 and $500) from 15 major sending countries worldwide as well as in Africa to 27 African receiving countries.
Research shows that if the cost of sending money is reduced by five percentage points, recipients in developing countries would receive over $16 billion more annually.
