IFAD, the United Nations International Fund for Agricultural Development, has announced a new partnership with the international money transfer operator, Moneytrans.
The project is part of the Platform for Remittances, Investments and Migrants’ Entrepreneurship in Africa (PRIME Africa), an initiative funded by the European Union and implemented by IFAD’s Financing Facility for Remittances (FFR).
The new partnership aims to enhance the financial resilience and economic empowerment of Moroccan remittance families through cost-effective, digitalised remittance flows from Europe, and innovations towards financial inclusion.
IFAD seeks to build confidence in digital payment solutions among such families, who have so far been reluctant to use them due to a lack of knowledge of financial services and the technologies used, opting instead for cash transfers. As a result, many families have been unable to take advantage of the opportunities offered by financial services combined with a formal account. Rural populations, particularly women and low-income households, are targeted by this project, which will broaden access to savings and credit.
Pedro de Vasconcelos, Programme Manager of IFAD’s FFR said: “IFAD’s support will promote the digital transition and financial inclusion of a category of migrant workers who are particularly resistant to the idea of using non-cash transaction methods and who know little about the advantages offered by the financial services that would become accessible”.
“At the European Union, we are aware of the importance of remittances sent by migrants to their countries of origin, particularly for the most vulnerable. Through this IFAD-supported project, we want to help reduce transaction costs to enable migrants and their families to benefit as much as possible from funds transferred to Morocco, by promoting the use of innovative digital financial services, for greater financial inclusion that benefits the target population and the economy”, said Patricia Llombart Cussac, European Union Ambassador to Morocco.
The main channels for sending funds to Morocco are Belgium, France, Germany, Italy, Spain and the Netherlands. Through this partnership, around 18,000 Moroccan remittance senders residing in these corridors are expected to switch to digital services, which will involve setting up formal bank accounts. Some 31,500 remittance recipients in Morocco will also benefit from this initiative, of whom 30 per cent are in rural areas.
Of the money sent by Moneytrans, 70 per cent will be directed to urban areas in Morocco, with the remaining 30 per cent distributed throughout the country, to more than 200 rural localities. Moneytrans’s extensive network and reach make it a good partner for developing and delivering financial services and products for financial inclusion.
Accounting for 7.9 per cent of Morocco’s GDP in 2021, remittances are an important source of income for many Moroccan families. Total remittances received in the country, which is characterised by a large diaspora, strong competition between remittance operators and a regulatory framework that supports the use of low-cost mobile wallets, amounted to 10.4 billion US dollars in 2021.
The cost of sending remittances to Morocco is significantly lower than the African average (5.6 per cent compared with 8.46 per cent). Digital channels are particularly advantageous, with costs for transferring money to a mobile wallet in Morocco from a developed country amounting to just 2.64 per cent in 2021.
* Source: IFAD