AFRICA: Fastest Growing Payments Market
African consumers need cheap financial solutions to send money to his relatives, receive international remittances, get access to micro-credit, pay the bills and make savings. 15% of the population is using a mobile banking solution across the continent. Making electronic payments is not a worry, because there isn't a monolothic payment app everyone is on, and most merchants Africans use have been using cash forever too. Mobile phone penetration will reach 90% by 2020, of which 40% will be smartphones according to GSMA, IFC, McKinsey, MIX Market MFI information exchange. While large MTOs such as MoneyGram and Western Union remain market leaders across Africa, 2.6% of remittances in 2016 flowed through mobile money wallets, primarily in East & West Africa. By 2021, mobile money wallets are forecast to account for 4.5% of the total value of international remittances accoring to the World Bank. Full Report
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"Global remittances have grown to a record level of $613-billion in 2017, a 7% increase from $573-billion in 2016, according to the World Bank. Payments to low- and middle-income countries rose at a high percentage: up 8.5% to $466-billion last year, from $429-billion the year before, according to the World Bank’s Migration and Development Brief.
This follows two years of decline in these payments, which are generally by expats sending money home to family. African countries Nigeria (with $22-billion) and Egypt ($20-billion) ranked fifth and sixth in the list of top recipients, behind India ($69-billion), China ($64 billion), Philippines ($33 billion), and Mexico ($31 billion).
“Sub-Saharan Africa remains the most expensive place to send money to, where the average cost is 9.4%,” said Dilip Ratha, lead author of the brief. Remittances to Sub-Saharan Africa saw a 11.4% growth in remittances to $38-billion in 2017, “supported by improving economic growth in advanced economies and higher oil prices benefiting regional economies”. These are expected to grow 7% to $41-billion this year.
Nigeria (with $21.9-billion) was the largest remittance recipient, followed by Senegal ($2.2-billion), and Ghana ($2.2-billion). The report found that remittances are a significant share of gross domestic product in several countries in the region, including Liberia (27%), The Gambia (21%), and Comoros (21%). Egypt is included in the Middle East and North Africa region." Full Report