Money received from loved ones working abroad can transform the family's standard of living. From Albania to Australia and from Bahrain to Bangladesh, the essential bridges built between countries because of remittances migrate families and keep children in desperate need of education.
For parts of Africa, life-enhancing remittances will be at a high price. Sub-Saharan Africa is the world's most expensive region to send money home. Africans last year paid as a fee an average of almost 1
More than 200 million people in Africa are dependent on payments from abroad and about 80 million living in rural areas. The lack of roads and bridges and other essential infrastructure can make the need for access to financial services challenging. There are also significant hidden costs, including transport charges, potential hazards along the way and monopoly on the services provided.
All these issues raise costs and make the receipt of transfers illegal in the region. The issue for governments, international organizations and consumer groups has been how to reduce these costs by finding alternative providers that can deliver cost-effective and reliable services.
An effective solution could come in the form of something that has been a staple of African social life for over a hundred years: the humble, yet resilient local post office. Posten's historical footprints and the intrinsic confidence in these community services help to strengthen their appropriateness.
In some sub-Saharan countries, post offices are less than 10 minutes walk away for 42 percent of their customers; Their proximity shows that postal operators are well placed to deliver financial services to their customers. Facts speak for themselves: in Benin and Madagascar, for example, 67 percent of the payees go to the post office for their money, and in Senegal and Ghana it is 62 percent and 57 percent respectively.
Digitalization is also sweeping inadvertently across Africa, perhaps at higher speeds than many other parts of the world. These trends impede rapid changes in the payment market and revolutionize payment systems. The opportunities for postal operators to develop sustainable financial networks that support migrant families and additional financial services are huge.
Results in the African Post Financial Services Initiative. A Success Report on Posting in Africa, written by the International Fund for Agricultural Development and its partners, including the Universal Postal Union, supports these findings and highlightes the urgency of the situation. We can not afford to ignore the effect of high costs on the poorest parts of society.
Reduction of transfer costs is on everyone's list of global priorities. The 2030 Sustainable Development Agenda for Objective 10 to reduce inequality requires steep reductions to less than 3 percent of transaction costs for migrant transfers and elimination of transfer corridors with costs exceeding 5 percent.
Posts are well positioned to achieve this goal: They have networks, logistics and strong ties with the government. If these links are linked to a forward-looking strategy and commitment to offering inclusive financial services, they can succeed in this challenge. However, the time for action is now. The post must reach out and seize this generation opportunity.
By the Director General of the Universal Mailing Association Bishar A. Hussein
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