Post offices across Africa are helping poor people in rural areas to get access to financial services and provide a cheaper way for migrants to send money home.
More than 15% of adult Africans – nearly 100-million people – use the tens of thousands of post offices and agencies across the continent, said the International Fund for Agricultural Development (Ifad).
Trust in post offices – and the small sums needed to open accounts – make them attractive to people such as the elderly, women and farmers who may otherwise be reluctant to visit banks, Ifad said in a report.
“In Africa, post offices are now considered part of the nation’s social fabric and an immediate access point to financial services,” Pedro de Vasconcelos, co-ordinator of the financing facility for remittances at Ifad.
A money exchanger counts Somali shilling notes on the streets of the Somali capital Mogadishu. (Photo: Stuart Price/AU/UN)
Post offices also play a growing role in delivering migrant remittances, with their low sender fees putting competitive pressure on money transfer operators such as Western Union and MoneyGram, according to the report.
The cost of sending remittances to African post offices is 6.4%, lower than the global average of 7.4%, and the average for Africa, which stands at 9.6%.
In a growing number of African countries, post offices offer a remittance service at an average cost of 5% or less, moving towards the UN sustainable development goal global target of less than 3% by 2030, the report found.
Remittances to Africa last year totalled $64-billion, which is expected to rise to $80-billion by 2020 amid growing migration in the continent as well as to Europe, said Ifad, which gives grants and loans for agriculture in developing countries.
Liberia and Gambia are the African nations that rely heaviest on money sent back home, with remittances making up 31% and 22% of their gross domestic product respectively in 2015, according to data from the World Bank.
Although on average only 3% of remittances sent to Africa are received through post offices, in countries where they play an active role, their market share in remittances has grown to up to 20%.
Given their growing influence, post offices in the continent should encourage people picking up remittances to open savings accounts, said Ifad, which is this week hosting a conference on remittances and postal networks in the Ivorian capital, Abidjan. – Thomson Reuters Foundation.