Promoting digital remittances through postal networks in Uganda

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Promoting digital remittances through postal networks in Uganda

Budget:

Sector:

Duration:

Implemented By:

Target Groups:

Program:

Project Category:

Project Goal

To enhance the financial resilience and economic empowerment of Ugandan remittance families through innovative, cheaper, inclusive and replicable remittance solutions from the European Union (EU).

Implementing Partner

Eurogiro is a part of Inpay A/S, a Danish financial technology (fintech) company serving over 40 postal operators, postbanks, money transfer operators (MTOs) and financial institutions worldwide.
- PostBank Uganda (PBU) is the fourth largest commercial bank in Uganda and active in the international remittance business.
- Posta Uganda (PU) has 155 post offices in the country, with more than 140 outside Greater Kampala Metropolitan Area.

Geographic Target

Rural Uganda and the remittance corridors with the Netherlands and Sweden

Project Objectives

Cost Reduction

Implement a unique private–public partnership through Eurogiro’s PostalPay branded app, which allows senders to remit to Uganda conveniently. A multi-MTO cashier solution will ease cash-out operations in the last mile and will also contribute to enhance competition and price transparency.

Digitalization

Accelerate the use of digital products and strengthen the digital payments ecosystem to facilitate international remittance transfers to Uganda.

Financial Inclusion

Link remittances with basic financial services for recipient families in rural areas of Uganda.

Formalization

Expand formal channels for international remittances by using the existing physical and digital postal infrastructure, with a potential for replication in other postal networks across sub-Saharan Africa.

Remittance context in Uganda

In 2019, Uganda’s population was 44.3 million. According to estimates,1 around 875,000 Ugandans (2 per cent of the population) reside outside the country.
64 per cent of the Ugandan diaspora lives in Kenya, South Sudan and Rwanda. Other top destinations are the United Kingdom, the United States, Canada, Sweden and Germany (UN DESA, 2019).
Uganda is host to one of the largest refugee populations in the world and the largest in Africa.
In 2022, international remittance flows to Uganda reached US$1.2 billion. These flows have represented 3 per cent of its yearly gross domestic product (GDP) during the past decade.
Uganda is among the top 10 remittance recipient countries in sub-Saharan Africa.

Project Description

IFAD is partnering with Eurogiro under the PRIME Africa initiative to promote digital remittances through PostBank Uganda (PBU) and Posta Uganda (PU) in rural areas of the country. The project leverages Eurogiro’s PostalPay app for sending international remittances into PBU accounts and to PBU and PU branches for cash payouts. The PostalPay app promotes both a physical and a digital method to pursue financial inclusion at the last mile.

Project Activities

01 Market Research

Market Research to assess the needs of Ugandan senders in the Netherlands and Sweden, as well as recipients in rural Uganda, a market research will be carried out to adapt Eurogiro’s forthcoming digital remittance solutions.

02 Technological Innovations

Technological Innovations Senders in the Netherlands and Sweden will have access to Eurogiro’s PostalPay app. In parallel, recipients will be able to choose their preferred means of receiving money and notify their relatives abroad. Greater competition in the market will be sought through the integration of Eurogiro´s “Financial Supermarket” in PBU and PU, as additional MTOs will be engaged.

03 Community Search

Community Search Marketing among senders, digital financial literacy and product awareness training for remittance recipients will enable broader project outreach. Supported by PBU staff including tellers andagents – training will focus on the use and benefits of digital financial products and services leveraged by remittances (such as mobile money accounts, savings or loans).

Expected Results

Supporting Sustainable Development Goals

At least 6,000 Ugandan remittance senders and recipients will start using the PostalPay app, Eurogiro’s digital remittance channel;
Remittance costs through Eurogiro’s PostalPay app will be reduced to 2.5 per cent of the sent amount, in line with SDG target 10.c;
More than 30,000 people in Uganda will benefit from increased financial education and awareness of digital remittances;
Media and communications about digital remittances will benefit over 250,000 adults in Uganda.