MONEYGRAM has partnered with Econet Wireless, Zimbabwe’s largest mobile company, to make it more convenient for Econet users to receive money through their mobile phones.
MoneyGram users will now be able to send up to $500 directly to receivers’ EcoCash accounts; the platform is available 24hours a day.
“Once the receiver keys in their eight digit reference number the money will be deposited into the receiver’s account within minutes,” said Anton Luttig, MoneyGram’s Regional Director for South East Africa.
Transaction fees are calculated at the time of sending the transfer, and will be communicated to the sender by the MoneyGram agent.
“Our customers are very excited about the new service and have encouraged us to invest more in this type of innovative services, “ said Luttig. “In a few weeks’ time we will be able to offer a directed send service which allows a sender to direct their remittance directly into an EcoCash wallet.”
Remittances make up a significant source of financing on the continent, supporting families and driving investment. The region receives billions of dollars in cash from its diaspora, a recent study showed, money that could be tapped to raise much-needed development financing.
Future remittances can also be used as collateral to lower borrowing costs and lengthen debt repayment periods, the bank in its recent Migration and Development Brief said.
Remittances to the region reached $32.9 billion in 2014, a 2.2% increase over the year before, which had seen a sluggish growth of 0.9%.
This is however expected to slow to 0.9% this year, but will recover to 3.4% next year, and 3.8% in 2017.
Nigeria accounts for two-thirds of this flow, at $21 billion, or a third of its imports in 2013. As the country’s credit rating continues to struggle, the bank says remittances to Africa’s most populous country will be vital in supporting domestic economic activity.
In a clutch of other countries such as Uganda, Rwanda, Guinea, Seychelles and South Africa remittances form a key part of imports, ranging from 18% in the former to 1% in the latter.
Kenya, South Africa and Uganda booked strong growth, countering the stagnation in Nigeria, which remained flat.
Some African countries are also extremely dependent on remittances, which form 20% of the GDP in Liberia, Lesotho and The Gambia.
The region also has the highest costs of sending remittances home in the last quarter of 2014, at 11.5% to send $200, against an average global rate of 8%, and double the cost of sending money to South Asia.
The most expensive path of sending money was from South Africa to Zambia, Malawi, Botswana and Mozambique.
Technology such as online and mobile money transfers is one way of reducing this, the study noted, but its growth has been hampered by regulation on fears of money laundering.
Internationally, the migrant stock is expected to breach 250 million this year, in part driven by conflicts.
Globally, $426 billion was sent as remittances, affected by factors such as a weak Euro Area, lower oil prices and exchange rate effects as the depreciation of the euro reduced the dollar value of remittances.