Financial technology company Mukuru is using a mobile phone based method of sending remittances home to attract millions of African migrant workers who often find the traditional, formal banking system cumbersome and intimidating.
The company has grown exponentially since 2011, and now boasts more than 7,900 pay-in and pay-out locations across southern Africa, chief executive Andy Jury said.
He spoke to the African News Agency after participating at a cross border remittances conference organised by Trade Conference International.
An estimated 3.2 million African migrants living in South Africa, excluding Tanzanians and Kenyans, remit about $2.7 billion home per year.
But nearly 70 percent of these cross-border remittances, mainly sent to support families’ living expenses and school fees, are via informal channels.
“What we’re really trying to do is make sure that we can provide a solution that is primarily focused on making it quick, simple, easy and convenient for them to send their money home to their loved ones and that less money leaks out of the system in the form of money changing hands in the informal sector,” Jury said.
The Mukuru model allows customers to initiate remittance orders through their mobile phones, make a payment at local retail outlets, with the money immediately available for the recipients to collect in the form of cash, bank top-upsor mobile wallets.
The system is an attractive alternative for migrants who find formal channels expensive, particularly when sending small amounts of money, or those who do not have adequate documentation to open bank accounts, or find the process inconvenient or intimidating.
In the past, such migrants have opted for informal channels to send money home, including via long distance bus drivers, but this is usually at a premium, and highly risky.
“We have signed up more than a million customers, predominantly in South Africa sending money to other countries but we are seeing great growth in customers sending money from Botswana, from Zambia and from Zimbabwe to the network,” said Jury.
“Our ambition is to be a pan-African network so we have as many ‘send’ countries as we have ‘receive’ countries.”
- African News Agency (ANA)