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.
Suvojit Chattopadhyay 