- In the wake of the pandemic, the World Bank had predicted a dramatic fall of remittances.
- However, the trends in African countries such as South Africa, Zimbabwe, Malawi and Zambia suggest that formal remittance flows across African borders have actually gone up.
In the wake of the pandemic, the World Bank had predicted a dramatic fall of remittances. However, the trends in African countries such as South Africa, Zimbabwe, Malawi and Zambia suggest that formal remittance flows across African borders have actually gone up.
The key contributor to this development is the growing role of digitised banking services in empowering marginalised communities and people with new financial tools.According to reports, remittances are expected to retain or even exceed their current levels of importance with Foreign Direct Investment flows into Low and Middle Income Countries (LMICs) expected to decline by as much as 35% over 2020.
World Bank had also projected a deepening digital divide that will ultimately exacerbate global inequality. The role of intuitive digital financial services platforms in bridging this divide is becoming more important than ever by facilitating and giving access to customers for, global money transfers, loans, saving accounts etc. This has become a powerful force for change by driving financial inclusion in African economies.
The global health crisis and national lockdowns have proved that when informal cash-out services became less accessible, people turned to intuitive digital financial services platforms, supported by physical distribution infrastructures, to send and receive money when they needed it most. Remittances mark only the beginning of a digitised and customer-led journey to financial inclusion and upliftment in many of these economies.
