Justice for the poor

From the Guardian Global Development pages, on the high costs of remitting money back to home countries

Fees for remitting money vary wildly between providers and countries. African migrants, who sent almost $60bn (£38bn) in remittances last year, pay the most. On average migrants sending money home to Africa lose 12% to fees. Moving money between African countries can cost much more – sending money to Tanzania from neighbouring Kenya or Rwanda, for example, costs an average of 22% (or a $44 cut on $200 transferred).

“It’s horrifying,” said Michael Clemens, of the Centre for Global Development, a thinktank based in Washington. “Really in a competitive environment there’s no reason these things should be more than 2, 3 or 4% … There’s a justice component to it, there’s no doubt about it.”

Agree with Michael Clemens here, but it also occurs to me that for years now, the costs of micro-credit have been justified on the same grounds – high set-up costs, low-value transactions, poor regulation, etc. Any talk of ‘justice’ in that case is usually dismissed as lazy sentimentalism. Not much has changed really, in all these years, micro-credit for the poor continues to be much more expensive than the credit that you or I can access, which in turn is much more expensive than the credit that our rich industrialists can access.

Here’s hoping that remittances have better luck…soon.

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