International funds transfer or remittances is common with migration, the transfer of funds by cross border migrants to their families and loved ones in their countries of origin. Remittances have thus been recognised as an important source of income for people living in developing countries.
Despite going to individuals and households, remittances actually promote development by increasing investments in human and physical capital. The World Bank reported in 2016 that global remittance flows totalled about USD601billion, of which USD441 billion went to developing countries, nearly three times the amount of official development assistance at the time.
It is estimated that about 1 million Ghanaians are in the Diaspora, with roughly 80% of them sending money back home regularly. This act is testament to the bond that exists between Ghanaian emigrants and their families back home.
According to the May 2022 release of the International Association of Money Transfer Network (IAMTN), about 75% of Africans in the Diaspora send money home, with altruistic motives, to cater for food, education, healthcare, among others.
According to World Bank, total remittances flow into Ghana amounted to about USD4.5 billion, a 5% growth over the previous year, and representing 5.9% of Ghana’s GDP.
Remittance was considered the bedrock of financial support for about 600,000 households in Ghana in 2020, empowering mostly women to save, invest and generate capital for micro businesses (GFRID, May 2022).
Ecobank’s resolute commitment to building a world class Pan African bank and contributing to the economic development and financial integration of Africa led to the introduction of customized products and services to the market, including Rapidtransfer. Rapidtransfer is Ecobank’s proprietary remittance product, which enables movement of money across Africa and from some 25 countries in Europe.
Today, Ecobank’s one-bank agenda, with standardised but diversified capacity and market knowledge has enabled bonding of families and loved ones through convenient and secure transfer of money across African diaspora communities.
Ecobank is facilitating and promoting Ghana’s financial inclusion agenda with the Ecobank Rapidtransfer, which enables funds transfer beneficiaries to receive their funds directly into their bank accounts, on mobile wallets, in-branch or at Ecobank Xpress Points across the country.
While beneficiaries bear no cost for receiving, senders pay only up to 3% of the sent amount for this service, making it very affordable for remitters. This is below the average remittances cost in both Africa and Ghana, as remittance service providers in the formal sector usually charge fees of 10%-15% of the principal amount. This makes Rapidtransfer the preferred option for receiving funds from across Africa and Europe. Beneficiaries are ultimately better off, anytime Rapidtransfer is used.
The importance of inwards remittances to Ghana cannot be overemphasised, as there are many positive developmental impacts of the service to the country. The foreign exchange from remittances alone is huge enough to help reduce the current account deficit of Ghana.
The large sums of money from remittances, earmarked for investments in housing and other infrastructure, positively impact the economy and facilitate development at the local levels. Also, the huge proportion of international financial transfers for direct consumption and recurrent expenditures, including living expenses, education, health care, marriages, etc. serve to increase the standards of living of beneficiaries, who are largely deprived and live in rural communities.
All these, favourably aligned with the UN SDG 10.C, which aims at reducing to less than 3% the transaction costs of migrant remittances and eliminating remittance corridors with costs higher than 5% by 2030. Besides Rapidtransfer, Ecobank also partners with renowned international remittances services brands like Western Union, Ria, and MoneyGram to serve the remittance community in Ghana.
