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International Remittances to Exceed $600bn in 2018 – Report

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International digital peer-to-peer remittances conducted via mobile and online platforms will exceed $300 billion globally by 2021, up from an estimated $225 billion in 2018, says a new study from Juniper Research.

The report titled Digital Money Transfer & Remittances: Domestic & International Markets 2018-2022, estimates that total international remittances via formal channels will exceed $600 billion in 2018.

This means that international remittances conducted via mobile and online services will be 36% of formal remittance by value in 2018, growing to 44% by the end of 2021, it says.

The World Bank estimates that global remittances will grow by 3.4% to $616 billion in 2018.Sub-Saharan Africa, with an average cost of 9.1%, remains the highest-cost region, it says.

Global money transfer company Xpress Money, says various African countries rely heavily on remittances to maintain their national gross domestic product. It notes remittances are the continent’s second-largest source of foreign inflows after foreign direct investment.

To facilitate convenient remittances, Africa has always been at the forefront of innovative payments solutions, and one of the earliest adopters of mobile wallets, it notes.

While the region is witnessing a regular growth in remittances, the costs, compared to the rest of the world, remain high, it notes.

Fadzai Deda, best practices research analyst for Frost & Sullivan, says international remittances present a growing opportunity for mobile money service providers as their business models allow them to offer remittance services more cost-effectively than mainstream money transfer operators (MTOs).

The emergence of digital remittance providers in the country offers people reliable and cheaper alternatives that facilitate low-value transactions, which are not viable through MTOs, she says.

Deda points out in recent years, the remittances market has been disrupted by the expanding application of mobile technology and the growing availability of broadband networks.

Emerging fintechs such as such as Mukuru and MamaMoney, popular for sending money from South Africa to neighbouring countries, are taking advantage of the pervasiveness of mobile, she adds.

Also, SA is the only country on the continent from which money can be sent through WorldRemit to other countries on the continent, says Deda. Technology providers like MFS Africa and TerraPay are also playing an essential role in driving the development of digital remittances on the continent, she adds.

Increasing smartphone penetration will drive the volume of online remittance services that enable the transfer of remittances to mobile money wallets, notes Deda. In time, it is expected that there will be a range of partnerships between MTOs, mobile money wallet providers and online money transfer providers, she adds.

The Juniper research notes that traditional money transfer operators are expanding their digital footprint and benefiting from their much-delayed expansion into digital payments.

It forecasts that the combined market share for the top four money transfer operators will continue to increase over the next four years, reaching 39% of total formal remittances by 2022.

Meanwhile, digital-only challenger players such as TransferWise and Xoom are witnessing slow, but increasing market share and revenue growth, says Juniper. The report expects combined market share of these digital disruptors, in terms of formal remittance transactions processed, will increase from 2.5% in 2015 to 12% in 2018.

The Juniper also predicts blockchain will have a significant role to play in the future evolution of transaction settlement solutions, with almost one in three of the proposed use cases for blockchain revolving around settlement and payments.

Sudhesh Giriyan, COO for Xpress Money, says countries like Nigeria are opening doors to blockchain technology to better various aspects of governance and business, including remittances.

“The adoption of technology will surely bring a whole new era of inclusion to the previously unreachable population. The next few years are going to be interesting.”


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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