The United Nations Capital Development Fund (UNCDF) has partnered with remittance service providers (RSPs), helping them run innovation pilots to support better access to and usage of digital remittances for migrants’ wider financial inclusion and resilience.
As part of the partnership, we conducted market scans and undertook data analysis of more than 70 million remittance transactions, with sex-, age-, and corridor-disaggregated data, additional customer surveys, and qualitative interviews with senders and receivers.
We’ve distilled the transaction data analysis and insights into the following RSP case studies. A second series of case studies, forthcoming in 2022, will demonstrate insights based on demand side data, including a survey conducted among 3,000 remittance senders and receivers, and 100 qualitative interviews.
Some of the key research insights on migrant-centric and gender-smart product development through the work with our RSP partners include:
- Half of the 281 million migrants are women, and more than half of the international remittances receivers are women. Yet only 3 out of 10 women are receiving and sending their remittances digitally.
- Women often rely on costly cash-based remittances through informal and formal agent remittance channels, which hinders the adoption of other financial services.
- 72 percent of women remittance senders and 53 percent of women remittance recipients felt more confident in handling money since they started using digital remittance services.
- Most senders and receivers reported remittances to be used for consumption (79 percent), and that beyond that there are a variety of other use cases.
- Women remittance customers tend to channel more money into their family’s healthcare (25 percent for women, 17 percent for men), education (35 percent for women, 28 percent for men), and utility bill payments (34 percent for women and 29 percent for men), men more often tend to use remittances more often for business and asset accumulation (36% for men, 28% for women).
- Digital remittance users had higher levels of other financial inclusion including the use of domestic payments, savings or insurance or pension. Once women are on a digital highway, we find increased adoption of other financial services, including domestic mobile money, savings, credit.
- Women sent smaller amounts but more frequently, and also are equally loyal customers.
- Every international remittance transaction has household implications. For 19 percent of the remittance recipients, it is the sender (often the spouse) who directly decides how the remittances are used, for 26 percent of the customers it is a joint decision between family members; and for 55 percent it is the receiver that directly decides how the money is spent. Women customers more often decide jointly with their spouses, while (young) men decide with other family members.
- These insights are often highly corridor-, sex-, age- and migrant profile-specific and will have profound implications on the ways products and policies need to be designed and tailored to the needs of customers.
Read on to learn how our research has helped inform remittance companies in piloting or scaling digital remittances and linked financial services, bringing forth insights on policy as well.
Remittances are a lifeline for people in Bangladesh, one of the top remittance-receiving countries in the world. Our research highlights the role digitization can play in boosting financial inclusion and the availability of a larger suite of financial services, as is evident from the COVID-19 pandemic that accelerated the transition from cash- to digitally-terminated remittances in Bangladesh.
The Gambian economy greatly depends on international remittances. 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 for enabling faster, cheaper and more inclusive remittance services. Our research highlights how 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 other utilities—validating and highlighting the importance of formal remittance inflows in creating macro-economic benefits.
Remittances constitute as much as 24 percent of Nepal’s GDP. To further aid this, in 2020, IME Pay combined its existing international remittance and mobile wallet services to enable customers to receive international remittance transfers directly into their mobile wallets. Our research points to how digital remittances accelerate the financial inclusion and resilience of migrants’ families, especially women.
Research from our collaboration with Wizall Money in Senegal highlights how customers using digital channels to receive remittances report experiencing more positive financial outcomes—such as being able to handle financial emergencies and having less financial stress—than cash recipients.
Read the Wizall case study in French.
Eighty-eight percent of the United Arab Emirates (UAE) population constitutes migrants, accounting for billions of dollars in outward remittances. Nearly 60 percent of these migrants constitute low-income or blue-collar workers, earning less than the minimum requirement to open a UAE bank account. Since our collaboration to improve access to and usage of the digital remittance channel through C3Pay—Edenred’s solution that enables migrants to receive their wages digitally—Edenred has added over 200,000 customers to its C3Pay app, sending around US$272 million in remittances to their home countries; nearly doubled the number of women eligible to make digital remittances through the C3Pay app; and have onboarded more women field and telesales agents, which aligns with our gender-smart and migrant-centric technical assistance.
SentBe, one of the Republic of Korea’s fastest-growing digital digital remittances Fintech remittance companies, collaborated with UNCDF us to better understand its customers and their remittance behavior, and help enable financial literacy services to drive migrant customers’ access to and usage of digital remittances and financial services through formal channels. Analyzing We carried out institutional data mapping and demand- and supply-side data analytics on more than 1.5 million SentBe cross-border remittance transactions records. T, we find his article shares key insights from the analysis, discussing the influence on migrants’ financial inclusion and resilience.the app is popular among young migrants and women customers (increased from 33 to 50 percent). Women customers are slightly more loyal users than men.
This article is part of a case study series on UNCDF remittance partners showing migrant and gender insights for better remittance access, usage and financial resilience. This first series draws largely from market scans and transaction data covering around 70 million+ remittance transactions. The second series (forthcoming in 2022) explores demand–side data including surveys conducted among 3,000 remittance senders and receivers, and qualitative interviews. The data and research is helping inform remittance service providers as they pilot and scale digital remittances and linked financial services.