Stakeholders in the remittance market from across Africa are in Cape Town, South Africa, to discuss how to leverage money transfers through the postal network and make them more affordable and accessible to rural people.
About 100 delegates from postal operators and banks, regulatory authorities, governments, the private sector, international organizations and civil society are attending the first African Conference on Remittances and Postal Networks, a two-day event hosted by the International Fund for Agricultural development (IFAD).
Each year, remittances worth more than 60 billion USD are sent to and within Africa, but often at great expense. The conference is addressing the challenges for improving the provision of remittance and financial services through postal networks in rural Africa. This includes market positioning of postal operators, linking remittances with financial inclusion, innovative technologies for financial inclusion and the legal and institutional environment affecting post offices and remittances.
The UPU is convinced that the postal network is key to reaching this goal. In recent years it has partnered with IFAD on several projects in Africa, Central Asia and Asia-Pacific. “Together, we have connected some 30,000 post offices in Africa, Asia and Central Asia to the UPU’s electronic financial network, making it possible for millions of additional people to send and receive digital payments through the post,” says M’Hamed El Moussaoui, chairman of the UPU’s financial inclusion working group.
Development impact
According to an IFAD press release, remittances make a major contribution to the incomes of rural households. “But, at the same time, a dearth of services, lack of competition and other causes also make rural remittances enormously expensive,” IFAD points out.
Similarly, it says, high transaction costs, limited rural payment networks, low financial literacy and consumer protection, as well as problematic regulatory environments prevent these financial flows from having greater development impact.
According to UPU research, more than 80 per cent of post offices in sub-Saharan Africa are located outside the top three cities in each country, in areas where banks are often absent. Post offices are often well placed to deliver remittances in rural areas.
The conference is organized under the African Postal Financial Services Initiative. This unique joint regional programme was launched by IFAD in collaboration with the World Bank, the Universal Postal Union (UPU), the World Savings Banks Institute/European Savings Banks Group (WSBI/ESBG) and the United Nations Capital Development Fund (UNCDF). It is co-financed by the European Union.
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