BY ANTONY MUTUNGA
The number of consumers who depend on remittances is expected to rise in the next 12 months amidst high cost of living and inflation. Remittances to and from Africa will see a rise in the next twelve months.
According to Western Union’s inaugural Global Money Transfer Index, which was conducted in five countries; Kenya, Nigeria, South Africa, Morocco and Senegal, the majority of Africa’s consumers (62%) receive money transfers at least once a month or more while 59% send funds across borders at the same rate. In the next 12 months, 78% expect an increase in these remittances.
The survey also shows that economic challenges have pushed 81% of receiving consumers across Africa to ask for more money to be remitted. While many local currencies weakening against the US dollar, consumers have been keeping an eye on their performance, with 67% of consumers in Africa sending more money when the currency value falls in their receiving country while 65% of receivers across the region agree that when currency values fall, they receive more money.
In order to be better prepared in terms of currency fluctuations, 84% of senders want money transfer brands to offer an additional service notifying them when relevant currency values begin to shift so they can plan transfers accordingly.
“The Index tells us that the cost-of-living squeeze across Africa means consumers are relying on money transfers as their daily lives have become more challenging,” Mohamed Touhami el Ouazzani, Head of Africa at Western Union, said.
As most of the world shifted online during the pandemic, Africa was not left behind as many migrated as well. However, many more remain unconnected, leaving a gap towards true digital equity. Despite 58% of Africa’s consumers wanting to use digital-only solutions for their money movement needs, 49% want a choice in platforms when transferring or collecting, to combine both digital and in person experiences.
Combining digital and physical experiences is key to maximising financial inclusion. Only by offering consumers with diverse option when moving money can money transfers create long lasting relationships and make an impact in community.
To ensure remittances increase, consumers are hoping money transfers will focus on advances that will enable even greater convenience, better planning and inclusivity. According to the index, 74% of senders and receivers across Africa are frustrated with repetitive and time-consuming paperwork.
In fact, 83% of senders in Africa would prefer facial recognition/biometric technology for instant and reliable registration and 78%of receivers in Africa want their funds to be disbursed on a prepaid card or e-wallet that does not require a bank account, as well as the option of receiving in different currencies.
Also, 85% of all consumers surveyed in the region are also eager for integrated ‘super’ apps, allowing them to manage remittances alongside other financial products with ease.
For a long time, family support has been the main purpose for remitting for most consumers in Africa. However, this is fast changing as paying for education costs, supporting business interest at home and saving for the future become major reasons for remitting.