GlobalMoneyTransfer

Public offices, businesses, households and individuals need to make or receive payments. Efficient and affordable money transfer and payment services are an important financial service most people require, including those who do not typically use financial or banking services. In world, commercial banks and post offices have been the main formal providers of money transfer and payment services. Despite the network of formal providers throughout the country, however, rural areas and client segments such as low-income earners tend to be badly serviced or excluded. In the urban centers where formal financial institutions are concentrated, these largely target the corporate sector and high income individuals and exclude low-income earners through conditions such as high minimum balances for account opening, high minimum deposits, and high fees for transactions. The availability of financial services has suffered a setback since the mid-nineties. Commercial banks have closed down less-profitable branches especially in rural areas. The post offices, with the single largest network of offices and often the only choice for much needed basic financial services, withdrew their telegraphic money transfer service. This has left many rural and low-income people with few if any formal service alternatives, especially for domestic money transfers. For international transfer, the situation is slightly different. In the past five years, a number of institutions targeting mainly low-income earners have entered the transfer business. Money transfer services (MTS) providers such as Western Union and Money Gram have entered the market and signed up primarily banks as agents. These service primarily the urban centers, fees are relatively high, and the vast majority of transactions are funds received. Such gaps left by formal providers have typically been bridged by informal means and services. These include transporting the money oneself or sending it with a friend or through an unlicensed service. These have increased and changed over time as electronic and mobile communication has facilitated transaction. More recently, bus and courier operators have joined with money transport services. This study aimed to find out what money transfer services operate in Kenya and who uses them. It highlights service features and gaps based on which it discusses the potential for microfinance institutions as a service provider and identifies opportunities and criteria for developing money transfer products.Aim and Objective of the ProjectThis Project aimed to identify the range of money transfer services operating in different Countries and how businesses and individuals, especially low-income earners use them. These include formal, semi-formal and informal services to send or receive payments or remittances domestically, within the Countries, or internationally. The Project analyses service features and gaps so as to gauge the opportunities and also the criteria for developing money transfer services in the Countries.