Money transfer companies see an increase in the number of new customers
Having fled an economic collapse in his native Zimbabwe, Brighton Takawira was able to support his mother at home with the modest income of a small fragrance company he started in South Africa.
Then the Covid-19 hit. Borders closed. The buses he had used to send his money stopped working.
âI had to send something, even a few dollars,â Takawira said, even though that sometimes meant going without bread. So he tried an online money transfer company on the recommendation of a friend.
He is one of the many African migrants pushed towards digital transfer services.
This is fueling a boom for Africa-focused money transfer companies, despite World Bank forecasts of a historic 20% drop to 46 billion shillings in remittances to the poorest countries this year. due to a global economic slump induced by a pandemic.
âWe saw an increase in remittances because the diaspora wanted to help their families,â said Patrick Roussel, who heads mobile financial services at Orange.
Like Takawira, many have had to dip into their savings or make sacrifices. The virus gave money transfer companies an edge over their competition – bus drivers and travelers used to send money home.
âWe have seen an influx of new customers, and we see them mainly coming from the informal market,â said Andy Jury, managing director of Mukuru, the company Takawira now uses.
The jury and other industry leaders say this shift is likely to last as digital money transfer services are cheaper, faster and more secure. Mukuru, which allows customers to send cash and groceries, experienced a 75% acceleration in growth compared to last year.
Remittances to sub-Saharan Africa totaled 5,000 billion shillings last year, according to the World Bank. Experts say that figure only tells part of the story.
Much of the money Africans send home through informal networks is missing from official data.
According to data from the Central Bank of Kenya, remittances for September reached 28.4 billion shillings compared to 23.4 billion shillings in the same period last year.
Remittances to Zimbabwe increased 33 percent through July. Remittance company WorldRemit said transfers to Zimbabwe had doubled in six months.
Azimo saw an increase of almost 200% in the number of new customers in April, May and June.