Repository of Practices

Primary GCM Objectives

GCM Guiding Principles*

*All practices are to uphold the ten guiding principles of the GCM. This practice particularly exemplifies these listed principles.

Sustainable Development Goals (SDGs)

Dates

2018 - Present

Type of practice

Research Study

Geographic scope

Regions:

Africa

Summary

The research responds to the need to develop a specific knowledge base around the increasing importance of mobile remittances. It intends to gather data, generate insights and provide policy guidance on mobile flows for African countries. More specifically, MobileRemit Africa aims at complementing RemitSCOPE Africa, a web-based platform that supplies users with remittance-based data and analytics. The first component of the MobileRemit Africa involves the creation of a mobile-remittance-enablement index score for African countries, allowing for a nuanced understanding of the factors that may aid or impede the adoption of the mobile channel for remittances. The index is built upon 5 pillars that allow for country comparisons and best practices dissemination: e-money international money transfer, market environment, enabling environment, inclusion environment and consumer protection.

Organizations

Main Implementing Organization(s)

International Fund for Agricultural Development (IFAD)

Partner/Donor Organizations

DMA Global

Developing Markets Associates Limited

Benefit and Impact

The research's assessments showcase that the recourse to digital channels has increased since the spread of the Covid-19 pandemic. This broader scope paved the way for a stronger link between remittances and financial inclusion. The access to mobile-enabled methods, in combination with online methods, facilitated lower transfer costs and allowed remittance-receiving families to reach their own individual goals, in terms of income, better health and nutrition, educational opportunities, housing and sanitation, entrepreneurship, and eradication of poverty. Moreover, it can enhance opportunities to create convergence between the financial goals of remittance families and the commercial strategies of financial service providers.

Key Lessons

The relevance of family remittances in transforming local economies in low- and middle-income countries is broadly recognised by policy makers and the international community. Yet, barriers of cost, security, and convenience remain, hindering the full transformational potential of remittances.
In response, IFAD developed MobileRemit Africa as a key instrument of the Platform for Remittances, Investments and Migrants’ Entrepreneurship in Africa (PRIME Africa) initiative, co-financed by the European Union and initially implemented in seven African countries (Ghana, Kenya, Morocco, Senegal, South Africa, The Gambia and Uganda) along with their main remittance corridors. Considering the crucial role played by digital remittances in recent years, a set of tools has been adopted to cope with those barriers, namely online channels, mobile channels or a combination of both.

Recommendations(if the practice is to be replicated)

Remittances terminated into mobile wallets constitute an opportunity for rural areas beyond the brick-and-mortar cash access points. Nevertheless, the spheres related to rural communities and gender inclusion have to be considered and addressed by public policies and private sector innovations to avoid hindering access to vulnerable groups. Especially if considering that women now comprise about half of all remittance senders (100 million) and that they are often digitally excluded in LMICs, and particularly in rural areas.
In addition, public and private responses were more effective to cope with the negative effects of the pandemic. However, this required mobile money players' market participation and available conductive regulatory environment.

Innovation

The research activity could be presented as innovative, scalable and sustainable for different reasons. The novelties lie in the digitalization of regular remittance flows, as well as the low transfer fees and the increased recourse to financial options, which allows more savings, greater insurance and direct access for the families to their wallets.
Furthermore, the initiative boosts the financial resilience and economic empowerment of remittance recipients through cost-effective digital channelling and safeguarding of remittances flows. It also carries the potential to reach more customers in more rural areas and broaden partnerships with relevant stakeholders. Moreover, it foresees the inclusion of local actors to set up business models which can survive at project end in the long run. Last but not least, the practice is in line with the changing circumstances posed by the pandemic since remittances can represent an important shock absorber in times of crisis and can complement public-sector disaster financing or accidents.

Additional Resources

MobileRemit

Date submitted:

06 February 2023

Disclaimer: The content of this practice reflects the views of the implementers and does not necessarily reflect the views of the United Nations, the United Nations Network on Migration, and its members.