Moving legal money within Africa is becoming a huge challenge for residents on the continent. The multi-billion dollar industry is fraught with hurdles including inefficiencies in processes and high fees charged by money transfer companies.
A move to check money laundering and funding terrorists has up administrative costs. But this means, millions of people sending legit money have had to bare the brunt. The World Bank says remittances cost almost 10 percent of payment amount. In 2018 alone, the Breton Wood Institution said $40 billion was sent to Sub-Saharan Africa.
According to a recently released World Bank report, remittances to Africa is the most expensive in the world over at 9.4 percent. South Asia ranks the least expensive at 5.2 percent. The average fee cost has hovered around 9 – 10 percent.
But now, a South African fintech start-up is hoping to bring relief to African migrants within the continent. Mama Money says it is Africa’s first cashless money transfer that allows Africans living in South Africa to send money for a low rate of 5 percent.
Ignatius Annor speaks to Director and co-founder of Cape Town-based Mama money, Mathieu Coquillon about current trends in the money transfer industry and to know if African migrants can rely on them.