Kigali_Rwanda: Rwanda receives 9.7 billion Rwandan francs sent each year by 4,781 Rwandans living in the United Kingdom. However, the average cost of sending 129,000 Rwandan francs from the UK to Rwanda is 13%, one of the highest average cost in the region, and almost twice as much as sending money to Kenya, where it costs just 7%.
In general, sending money to Africa is more expensive than anywhere else in the world, according to new research published at this week’s Global Remittance Conference in New York. The report argues that existing technology – like regional automated clearing houses, remittance payment processing hubs and aggregators - could all make sending money from the UK to Africa much, much cheaper.
The report shows that the average cost of sending money to Africa is almost 10%, compared to the global average of just over 7%. Yet the UN Sustainable Development Goals say that by 2030 the global average price for remittances should not exceed 3% of face value, with even the most expensive countries not being more than 5%.
The report shows that one and a half million people in the UK send over four billion pounds to Africa every year. But it reveals that nine out of ten of these transactions are carried out using cash and only one in twenty is initiated online.
The report was commissioned by Financial Sector Deepening Africa (FSD Africa) and written by Developing Markets Associates (DMA).
Ms. Waringa Kibe, the Country Director at Access to Finance Rwanda (AFR) acknowledged that it’s more expensive to send money to Africa than anywhere else in the world. But Waringa noted this gap reveals opportunities for the emerging Africa financial technology firms to develop digital solutions that would increase efficiencies in service provision and reduce the cost of cross-border money transfers.
“The findings also draw attention from all stakeholders such as policy makers, regulators and private financial sector players to put in place and accelerate mechanisms that will facilitate the flow of money transfers to the Rwandan economy,” said the Access to Finance Rwanda.