Post offices in Africa offer migrants cheaper way to send money home: U.N.
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By Kieran Guilbert
DAKAR (Thomson Reuters Foundation) - Post offices across Africa are helping poor people in rural areas access financial services and provide a cheaper way for migrants to send money home, a U.N. agency said on Monday.
More than 15 percent of adult Africans - nearly 100 million people - use the tens of thousands of post offices and agencies across the continent to access basic financial services, said the International Fund for Agricultural Development (IFAD).
Trust in post offices - and the small sums needed to open accounts - make them attractive to people such as the elderly, women and farmers who may otherwise be reluctant to visit banks, IFAD said in a report.
"In Africa, post offices are now considered part of the nation's social fabric and an immediate access point to financial services," Pedro De Vasconcelos, coordinator of the Financing Facility for Remittances at IFAD, said in a statement.
Post offices are also playing a growing role in delivering migrant remittances, with their low sender fees putting competitive pressure on money transfer operators like Western Union and MoneyGram, according to the report by the U.N. agency.
The cost of sending remittances to African post offices is 6.4 percent, lower than the global average of 7.4 percent, and the average for Africa, which stands at 9.6 per cent, said IFAD.
In a growing number of African countries, post offices offer a remittance service at an average cost of 5 percent or less, moving towards the U.N. Sustainable Development Goal (SDG) global target of less than 3 percent by 2030, the report found.
Remittances to Africa last year totaled $64 billion, which is set to rise to $80 billion by 2020 amid growing migration within the continent as well as towards Europe, said IFAD, which gives grants and loans for agriculture in developing countries.
Liberia and Gambia are the African nations which rely heaviest on money sent back home, with remittances making up 31 percent and 22 percent of their gross domestic product (GDP) respectively in 2015, according to data from the World Bank.
While on average only around 3 percent, some $2 billion, of remittances sent to Africa are received through post offices, in countries where they play an active role, their market share in remittances has grown to up to 20 percent, the IFAD report said.
Given their growing influence, post offices in the continent should encourage people picking up remittances to open savings accounts, said IFAD, which is this week hosting a conference on remittances and postal networks in the Ivorian capital Abidjan.
(Reporting By Kieran Guilbert, Editing by Ros Russell; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit news.trust.org)
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