Financial Inclusion

Improving the lives of migrant farm workers with mobile money solutions


Sending money from Bloemfontein to Harare takes 22 hours on a bus trip or ten seconds using a mobile money solution. Low cost mobile money solutions offer a fast, reliable way to transfer money and is changing the lives of agricultural migrant workers.

Before mobile money solutions, migrant workers had a few options to get their hard-earned money home to loved ones. They could either send remittances home by taking it home themselves, at considerable time away from work, or to send money home with a third party who may well be unregulated and charge a high fee for this service. This is also a risky option especially if it was a large sum of money.

Bank accounts offer a potential solution but are unsuited to low income earners working in rural areas. Banks operate in towns and cities, in working hours and charge high fees[i].

Mobile money transfers are a better way to transfer remittances and bring low income earners into the regulated financial services sector.

Both the International Labour Organisation and the World Bank have recognised the need for greater financial inclusion in rural areas. World Bank statistics show that 70% of the world’s poor live in rural areas, where agriculture is the predominant occupation, and 42% of the world’s farmers are unbanked.

Financial inclusion is an imperative in the National Development Plan, and in this case it starts with a migrant worker being offered a solution that can improve his quality of life by catering to an immediate financial need. It starts with how to send money home safely and quickly at as low a cost as possible.

Mobile money solutions allow workers to transfer money across borders at any time on any day. Unlike mobile banking apps, mobile money transfers don’t require a smart device—they can be done on any mobile phone.

These solutions benefit workers, their families and employers. Workers don’t have to take time off to travel or go to a bank. They don’t have to hand over cash in the hope that all of it will be delivered and they have a record of their transfers.

Mobile money transfers are cheaper than banks. Hello Paisa transfer costs an average of 5% versus the 15-20% fee charged by traditional channels. Add these savings to the savings in fees and travel costs other options incur, and migrant workers have more in their pockets for items like food and school fees. We estimate R150 million has been put into the hands of families of low income migrants from these savings.

Mobile money solutions aren’t as well known as the big banks—yet.

In the communities we serve Hello Paisa is a household name with over 350 000 customers.

Importantly, we are regulated. Hello Paisa was awarded the first independent money transfer operator licence by the South African Reserve Bank in 2014.

Mobile money transfers don’t just offer a safe way to transfer funds, they introduce workers to other financial services, financial literacy improves, and workers start to use products like savings accounts.

Low income earners shouldn’t be excluded from the formal financial sector, with the right products and services we can improve their lives and give them safer, cheaper ways to manage their money and gain control of their finances.

In conclusion I would like to echo the wise words of Muhammad Yunus – who calls himself the ‘banker to the poor’: “It is the ability to control capital that gives people the power to rise out of poverty.”

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Issue 46


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