Highlights from the Global Forum on Remittances, Investments and Development
On the occasion of the International Day of Family Remittances (IDFR) on 16 June 2017, GSMA Mobile Money participated in the Global Forum on Remittances, Investment and Development (GFRID) at the United Nations Headquarters. On the same day, IFAD released their annual Sending Money Home Report, providing data and analysis of remittances and migration trends for developing countries over the past decade, as well as the potential contributions of remittance families to reaching the Sustainable Development Goals (SDGs) by 2030.
Below are some of our highlights from GFRID and key takeaways from recent research.
We won’t be able to achieve SDG 10.c if we don’t manage to scale international transfers via mobile money.
While international remittances continue to represent a significant source of revenue for many developing countries, the cost of sending US$ 200 has remained nearly flat over the past few years. This highlights the urgency of introducing innovative products such as mobile money in order to achieve cost reduction targets.
At GFRID, Leon Isaacs, CEO of Developing Markets Associates, also presented findings from a newly published report commissioned by FSD Africa and noted the importance of digitising remittances in order to achieve cost reduction targets. The study, for example, found that the average cost of sending money from the UK to Africa varies between 11% for ‘cash-to-cash’ transfers, 8% for online services and 6% for those terminating into a mobile wallet.
Dilip Ratha, Lead Economist at the World Bank focusing on migration and remittances, presented new insights on the cost of remittances. The World Bank has recently published new findings from the Remittance Prices Worldwide (RPW), showing that mobile operators are the cheapest remittance service provider, with an average cost of 2.87% for sending USD 200.
All these new insights confirm the results of a study conducted by the GSMA in August 2016 which found that sending via mobile money is, on average, more than 50% cheaper than doing so via available global money transfer operator channels.
Beyond its impact on cost reduction, mobile money can help to maximise the impact of remittances on development.
Nathan Naidoo, GSMA Mobile Money Public Policy Director, noted that connecting international remittances to a transactional account can provide a gateway to broader financial inclusion. Mobile money offers that potential: instead of cashing out, recipients can use their digital money to pay for school fees, utility bills, or to send money onward, to family in need.
Convenience was another key benefit highlighted during the conference. For example, Orange’s Head of Digital Inclusion Services, Catherine Flouvat, noted that freedom from the opening hours of a traditional remittance agent can make life easier for those based in remote areas or managing inflexible schedules.
Women represent around half of all remittance senders globally and have a key role to play in the remittance space.
It was noted that initiatives around international money transfers should have a gender focus in order to maximise the impact of remittances on development. In her opening remarks, Louise Arbour, the Special Representative of the Secretary-General for International Migration, put forward the case for focusing on women, who tend to remit a higher proportion of their income than men. Louise emphasised that “we must unlock the potential of migration for women by abolishing gender-biased legal, administrative, and cultural restrictions to their movement and to their financial inclusion.”
To realise the promise of mobile money for international remittances, regulators and multilateral organisations need to work with mobile operators to find solutions to accelerate growth.
Progressive regulation is required to enable international remittances via mobile money in a greater number of corridors. For example, in their endorsement of the IDFR, the IOM (UN Migration Agency) highlighted the need for better partnerships between the financial industry and regulators at a global level to foster an enabling regulatory framework.
The mobile industry is keen to engage in such partnerships to unlock the development of international remittances via mobile money across more markets, as highlighted in endorsements of the International Day of Family Remittances by the GSMA and Vodafone Group.
So, where do we go from here?
On 12 July 2017, the GSMA will be hosting a workshop on international remittances during GSMA Mobile 360 – Africa in Dar es Salaam, Tanzania. This workshop will be an opportunity to bring together a wide range of stakeholders who are interested in joining forces to advocate for the development of international remittances via mobile money across a greater number of markets. Please join us to share your thoughts on how we can enable this growth.
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