NIGERIA:Emerging trends, innovations in diaspora remittances
By Chijioke Nelson
Remittances represent household income from foreign economies, mainly from the temporary or permanent residents in other countries, popularly called the Diaspora. But the remittance of this disposable income back home has emerged a novel fallout of the 21st Century, given the increasing significance.
These remittances include cash and non-cash items that flow through formal channels – electronic wire, or through informal channels like money or goods carried across borders.
International experience suggests that remittance flows have implications for macroeconomic and financial stability, hence accurate compilation and recording, as well as new trends and innovations in remittance corridors are crucial in understanding the dynamics of the market.
At a point in the fight for stable foreign exchange market in Nigeria, a definite policy on the flow channel and exchange rate was made.
Remittances contribute to economic growth and to the livelihoods of people worldwide. It constitutes the second largest financial inflow to many developing countries, exceeding international aid. It also has a distributive impact on households as income and consumption
patterns are affected.
The vast majority of remittances are used to provide for the basic needs of households regardless of the country, with relatives of the sender, particularly the parents, being the most likely recipients. Generally, remittances are used for housing, consumption and education financing, with increased flows observed during “back to school and pre Christmas periods.”
The favourable side of globalisation on the movement of skilled workers and technological advances were enablers of this 21st Century phenomenon.
Of course, the size of the Nigerian Diaspora community has increased, precipitating significant increases in remittance flows into the country. According to Wikipedia, about 20 million Nigerians live outside the country, with majority in the U.K. and United States. In fact, the British Foreign office put the population of the Nigerian community in the U.K. at between 800,000 and three million.
Within Africa too, the number of people living and working outside their home countries has been on a steady rise over the years, which typically follows a d
iscernible pattern – a drift from weaker economies to relatively stronger economies in the continent.
These exert a lot of influence on their home countries’ economy by trade-related flows as well as home remittances for the upkeep of dependent relatives. In those countries, they mostly earn their living as traders, but now an ever-increasing number of High Income Personnel (Hips) like bankers, educators, artistes, diplomats, medical practitioners, petroleum/telecommunications personnel, has emerged in the demographics. Nigerians also feature prominently in this category.
According to a World Bank report, the Nigerian remittance market is worth well over $10billion, yet with enormous opportunity and growth prospects. The development has given rise to demand for money transfer product with extensive reach across Africa by financial service providers that have strong foothold across the continent.
Notable among Nigerian banks that are trying to explore the growing importance of the remittance landscape are UBA, FCMB, GTB, Union Bank, Ecobank, First Bank, and Keystone Bank, among others.
For the foremost pan-African bank, Ecobank Transnational Incorp., its Rapid Transfer product was conceived out of the need to provide convenient, accessible, and reliable money transfer service for its retail and wholesale customers and non-customers alike, as the lender stands out in extensive geographic footprint, making it advantageously positioned to deliver the most reach.
The Ecobank Rapid Transfer is a proprietary send and receive money transfer product available in all Ecobank locations across Africa. It is a unique product that facilitates easy transfer and access to funds across Nigeria and in all the 33 countries across the continent, where it currently operates.
The Executive Director, Consumer Banking, Ecobank Nigeria, Mrs. Carol Oyedeji, said the product is a strategic initiative that expands the reach of the bank and allows both customers and non-customers access the enormous benefits offered by the pan-Africa reach.
“This is a more convenient way we believe bank customers in Nigeria can be served better. The uniqueness of this product is its swiftness in delivery and accessibility as transactions are consummated instantly at the receiving end. No matter the bank you have your account in Africa, you can receive money through Rapid Transfer,” she said.
Among its objectives, the Ecobank Rapid Transfer is facilitate economic integration in the region by making available more accurate statistical data for realistic inter-regional policy decisions and progressively capture and migrate regional transactions from the informal sector to the formal sector.
The Ecobank Rapid Transfer could be made through cash to cash, cash to account, account to cash, account to account and cash pull transaction formats. This new service offering allows remittances to be received directly into the receiver’s personal bank accounts anywhere in the country and same accessed any day or time just like any other deposits.
With near or real-time connections, the receiver has access to the funds whenever he/she wants. Funds are available to receivers 24/7, 365 days in the year and they can easily retrieve money transfers from their accounts at night, during public holidays and on weekends, using any of the e-transfer channels- ATM, POS, Internet banking, Ecobank mobile App, sub-agency and physical withdrawal from the branches.
Speed, convenience and ease of mind are in-built features of this new innovation. Fund is guaranteed to be securely deposited directly into receiver’s account with the risk of fraud and other malpractices hitherto associated with fund transfer receivership in the country eliminated.