Global Remittance Flows Into Continent Less Than 20 Percent

SINAPI ABA Trust (SAT), a financial institution which seeks to be transforming lives in Africa through micro finance, has revealed that the total global remittance flow into African continent is less than 20 per cent.

The financial institution attributed the low flow of remittance into Africa to lack of confidence and trust building, and exorbitant service charges on the part of the African immigrants.

Speaking in an interview with the Business Chronicle at a conference dubbed 'Harnessing the Potentials of Migration for Development' in Accra, the Chief Executive Officer of SAT, Tony Fosu, added that the percentage of remittances that flows into sub-Sahara Africa when compared with Asia and Latin America countries, which is nothing to write home about.

According to him, the main objective of this conference seeks to link up immigrant associations in the developed world to microfinance institutions in Africa, towards building the necessary confidence so that immigrant organizations and people from Africa can have the confidence to remit money and also to create the necessary environment for people in Africa, to put the money into good use.
Mr. Tony Fosu emphasized that if Africans are able to have access to their remittances on time, they would be able to put the remittances into productive use, such as buying their farming inputs and also pay for other services. This would increase their productivity thereby increase their turn over to improve the national economy.

These institutions face a number of challenges that minimize the comparative advantage they enjoy (for instance geographic location), vis a vis other banking institutions. It is imperative to support MFIs with a realistic lens, in order to increase financial access in Africa through the diaspora".The Principal Investment Officer of African Development Bank (AfDB), Jaaba Rafeal said "The full picture is rather complex because the number of microfinance institutions (MFIs) in Africa operating in the business of remittance transfers is very small, below 5% of all remittance payers.

He noted that although financial institutions generally offer a full range of financial services, the geographic scope of their branches is often limited to their presence in the urban areas.

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