Authors: Marup Hossain, Muhammad Ali Akram and Eugenia Perez Pons
- The Gambian economy greatly depends on international remittances, more than ever during the COVID-19 pandemic period. However, the country is currently unable to take full advantage of these flows because a large share is sent through informal mechanisms. As a result, there is a strong business case for remittance service providers and fintech companies to digitize remittance flows, enabling faster, cheaper and more inclusive remittance services. One of such providers is Ping Money, with whom UNCDF has recently partnered to expand access to digital remittance payments and other digital financial services in The Gambia, particularly for women and youth.
- UNCDF’s initial research shows that remittance senders from the UK, especially men, often shop around for service providers before settling on one to transfer funds. Social media listening showed that women senders in the UK were more careful and considerate before deciding whether to use the app. Although high compared to many other digital remittance providers, women consist of 40 percent of the PING Money customers (remittance senders). 44 percent of the PING Money remittance recipients are women compared to 53 percent women receivers in the Gambian market, in general).
- The overwhelming majority of Ping Money remittance recipients pick their remittances up in cash in the Gambia. The recent addition of Ping Money’s value-added energy bill payment service has taken off, with nearly a quarter of active customers sending both remittances and bill payments and another fifth using the platform exclusively to pay for their electricity and and other utilities. Half of these bill payments are below US$ 10 only. There seems to be a strong demand for migrants to send international remittance payments to help improve energy access and other bill payments for their families back home.
- While 42 percent of customers sent at least 10 remittances in the last year, they do not necessarily send them regularly and consistently. An initial analysis suggests that female recipients tend to have more leeway in spending the funds they receive, while the uses of remittances sent to men are more prescribed. Moreover, when received digitally there are more specific use cases including savings. For instance, savings is the main use of remittances if picked up digitally in the Gambia, which is only 2 percent in case of cash pick up.
According to official statistics, remittances comprise as much as 22 percent of The Gambia’s GDP.1 However, if estimates of informal remittances are included, total remittance values are likely to reach as high as 33 to 50 percent of GDP.2,3 Dependence on remittance reached a historic high during the COVID-19 pandemic period, reportedly to 63 percent of the country’s GDP in 2021.4 Regardless of the exact figures, it is clear that remittances are a central part of The Gambia’s economy and society, as they are received by a quarter of adults and over half of women, especially those living in urban areas.5
Ping Money is a UK-licensed remittance provider and fintech firm that offers a simple service for users to digitally send money to The Gambia in real time. Ping Money also offers cross–border top-ups for mobile airtime and bill payment services for electric utility service providers.
UNCDF has recently partnered with Ping Money to formalize remittances and expand access to payments and financial services in the Gambia, particularly for women and youth. The collaboration will also support Ping Money in adapting, piloting and scaling its digital wallet service, a platform that enables customers to receive remittances and safely store funds digitally and that will offer many Gambians their first opportunity to access formal financial channels.
To kick off the partnership, UNCDF collaborated with Ping Money to carry out institutional data mapping, a market scan, demand- and supply-side transaction data analytics and social listening exercises. This blog shares the key insights that these exercises generated regarding remittance access, usage and financial resilience among Ping Money customers. It concludes with a list of product innovations that Ping Money has already implemented based on these data–driven insights.
Access to digital remittances
Migrants’ access to digital remittances depends on the availability, safety and convenience of such solutions in both the home and host countries as well as migrants’ awareness of these services. While not entirely complete, access can be inferred through customer profiles.
Remittance senders often shop around for service providers, signing up but not necessarily making transactions. As shown in Figure I, only 20 percent of Ping Money’s registered users were considered active, meaning that they made at least one transaction since their registration. Women, middle-aged individuals and migrants are more likely to be active than those who registered but never used PING Money services.
Of active Ping Money users, 40 percent are women, nearly 80 percent are aged 25-54, almost 70 percent are migrants and 55 percent are nationals from an African country (Figure II).
As shown in Figure III, the proportion of men and women remittance recipients is rather balanced, with 56 percent of transactions sent to men. Most remittances are sent to customers’ siblings and friends. Around 10 percent of transactions were remittances that customers sent to themselves as a means of transferring money into their Gambian bank accounts.
Ping Money offers digital remittance transfer services; 61 percent of transactions are sent using a credit card and the rest with a bank transfer. However, as shown in Figure V, the vast majority of transactions are still received in cash. The overwhelming dependence on cash-based pick-up reveals the scope of opportunity for remittance digitization, which is about 50 percent less expensive and more convenient than cash and can open doors to the use of other digital financial services, including insurance, savings and credit.6
Usage of digital financial services
The extent to which migrants use digital financial services, for instance, sending and receiving methods, frequency, volume and sizes of transactions, depends on whether the services are designed with migrants’ needs in mind and whether there are specific use-cases for migrants for the spending of remittances.
In addition to its remittance service, in February 2020, Ping Money introduced a second offering that enables users to pay their electricity bills and mobile airtime in the Gambia digitally. As shown in Figure IV, the bill payment service has already grown significantly, with nearly a quarter of active customers using Ping Money for both remittances and bill payment and another fifth using it exclusively to pay bills. Adoption of the new service has helped the company expand its customer base to more non-migrant customers, many of whom use Ping Money exclusively for energy bill payments in the Gambia.
As shown in Figure VI, 14 percent of remittance transfers are below $50 in value, 59 percent are below $200 and 17 percent are over $500. A quarter of all bill payments are below $5, half are below $10 and nearly a third are over $15. While there is not a big difference in the amount of money men and women send in remittances, women tend to send larger bill payments. The Ping app allows migrants in the UK to frequently and flexibly pay for their electricity and water access in Africa.
Improving migrants’ financial resilience involves strengthening their financial health and ability to withstand setbacks.
To this end, families with regular remittance incomes may be more financially resilient than those with inconsistent receipts. The customer data shown in Figure VII indicates that 42 percent of Ping Money customers sent at least 10 remittances in the last 12 months. However, these are not always sent on a regular basis. About 34 percent of customers sent remittances every quarter and only 8 percent sent them every month. This irregularity may be because many migrants work in jobs that do not pay a monthly salary. Alternatively, it may reflect customers’ efforts to reduce transfer fees by sending larger transactions less frequently.
A subgroup analysis of remittance use (Figure VIII) suggests that remittances sent to men are intended for specific purposes while those sent to women are intended to support the family broadly. This may reflect gendered social norms that affect how men and women access, use and benefit from financial services. Interestingly, remittance transactions that are picked up digitally are intended to be put to a wider range of uses, including savings, than those picked up in cash. This trend provides some evidence supporting the value of remittance digitalization in The Gambia.
Achievements and next steps
- Improving access by exploring partnerships with banks and credit unions in The Gambia to make it easier for Gambian economic migrants to open and easily deposit funds in savings accounts via Ping Money.
- Strengthening usage by offering bill payments and broader use cases for a wider variety of domestic payments, for example, construction materials and shopping.
- Driving financial inclusion by facilitating remittance-linked domestic payments– for migrants and their families in the Gambia.
The next stage of the partnership will involve launching a mobile wallet in the Gambia to improve the adoption of digital remittance services, particularly among women and youth. Further research efforts will explore how digitization can change the remittance landscape in The Gambia.
- World Bank, “Personal remittances, received (% of GDP) – Gambia, The”, DataBank database. Available at https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=GM.
- Besart Avdiu and Moritz Meyer, “How COVID19 changed the path of remittances in The Gambia”, World Bank Blogs, 23 March 2021. Available at https://blogs.worldbank.org/africacan/how-covid19-changed-path-remittances-gambia
- Local news sources, including Binta Jaiteh, “CBG: Remittances increased in 2021,” The Voice, 10 January 2022. Available at https://www.voicegambia.com/2022/01/10/cbg-remittances-increased-in-2021.
- Digitalization of remittances: an opportunity for financial and digital inclusion – a specific country analysis on The Gambia. https://www.ifad.org/en/web/latest/-/digitalization-of-remittances-an-opportunity-for-financial-and-digital-inclusion-a-specific-country-analysis-on-the-gambia#:~:text=Formal%20remittance%20inflows%20to%20the,US%24773%20billion%20in%202021.
- United Nations Capital Development Fund, FinScope Consumer Survey: The Gambia 2019.
- World Bank, Remittance Prices Worldwide: Making Markets More Transparent. Available at https://remittanceprices.worldbank.org/corridor/United-Kingdom/Gambia.
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