Paper

Capturing a Market Share? Migrant Remittance Transfers & Commercialisation of Microfinance in Africa

Proceedings from "Current Issues in Microfinance", Aug 12-14, 2003, South Africa
Download31 pages

This paper argues that with the increasing competition, professionalization and commercialization in the microfinance markets, uniformity of products and services can become a significant disadvantage. It discusses the opportunities and challenges of money transfer or other financial services to remittances for MFIs, and argues that such products offer great opportunity to MFIs and can aid in the commercialization process due to:

  • Perceived or actual proximity of MFIs to client groups which receive remittances;
  • Possibility of integrating remittance receivers as microfinance clients.

The paper looks at the remittance flow to understand the business potential for money transfer services, and discusses the following for remittances:

  • Volune and flow for Africa;
  • Receiving and source countries;
  • Receipts and uses;
  • Average amount and transfer costs.

It finds that there exists:

  • A high potential for capturing a market share of an under-serviced market of remittance money transfers;
  • Only regulated MFIs to take advantage of this opportunity;
  • Product opportunities like domestic money transfers, which can contribute as competitive and profitable service for commercializing MFI.

About this Publication

By Sander, C.
Published