Maximizing remittances from migrants in South Africa through a low-cost digital solution

IFAD is partnering with Mama Money under the PRIME Africa initiative to maximize the impact of remittances sent by low-income migrants in South Africa to their remittance receiving families in Mozambique and Zimbabwe. The project responds to the growing need of migrant workers in South Africa to maximize their net income, and that of their families back home, by receiving money sent at an affordable price. Mama Money’s RemittancePlus account offered to low-income migrants will be expanded to current informal and cash-only senders, providing a low-cost digital remittance product.

Budget:

Financed: €309,200
Co-Financed: €146,100

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Duration: 2023 ~ 2025

Project Category Financial Inclusion
Remittances & Digitalisation

Target Groups:

South Africa and its corridors to Mozambique and Zimbabwe. Remittance receivers in Mozambique and Zimbabwe, mostly located in rural areas of high migration.
Mozambican and Zimbabwean migrant workers in South Africa sending remittances back home (40 per cent female).

Programme

FFR Strategic Framework

PRIME Africa

Project Goals

Maximize the impact of remittances sent by low-income migrants in South Africa to their remittance-receiving families in Mozambique and Zimbabwe through a cost-effective and simplified-KYC transactional account.

Implementing Partners

Mama Money is one of the leading RSPs operating in over 20 African countries. It is an international money transfer company focusing on providing affordable remittance services. Mama Money offers low-KYC transactional account through a partnership with Flexpay and Access Bank.

Geographic Target

South Africa

Outcomes

In 2023, the project initiated its implementation phase with the development of the Remitplus account, a low-KYC digital account. This product development phase included significant enhancements, notably the translation of the account interface to include Portuguese, facilitating its adoption by Mozambican migrants.
On the demand side, the project focused on training the trainers for Mama Money agents to enhance their capabilities and knowledge, enabling them to better serve customers interested in opening and using bank accounts. This TOT programme successfully covered 860 agents, progressing towards the overall target of 1,500 agents trained.
In September 2023, Mama Money launched outreach campaigns equipped with agent kits, which included gazebos, kiosks, brochures, pull-up banners, tables, chairs, and transportation. These resources were deployed to specific locations to effectively reach the target population.
MamaMoney has opened over 7,000 RemittancePlus accounts in South Africa, with 3,800 customers sending remittances from this account each month. Many migrants are using the card for domestic transactions. MamaMoney has been trialling a digital approach to financial education and awareness, and has seen a reduction in use of their call centre, but so far has not been able to succesfully convert their large cash-based customer base to digital.