IFAD And EU Join Forces to Address The lack of an Efficient Payment Infrastructure in Southern Africa
The International Fund for Agricultural Development (IFAD) has join forces with the European Union (EU) to address the lack of an effective and efficient payment infrastructure for low-value remittances in Southern Africa.
Through the Platform for Remittances, Investments and Migrants’ Entrepreneurship in Africa (PRIME Africa) initiative, IFAD and the EU have collaborated with two leading private sector players in South Africa: BankservAfrica, the largest automated clearing house in Africa, and Mama Money, a fintech company.
The IFAD-EU partnership will support the implementation of BankservAfrica’s Transactions Cleared on an Immediate Basis (TCIB), an inter-operable, low-value and instant payment scheme for remittances.
Through this collaboration, it will seek to reduce the cost of international remittances in Southern Africa, thereby reducing the loss on earnings being sent home by migrant workers.
Speaking on this initiative, Francesco Rispoli, Country Director and Head of IFAD’s Southern Africa Multi-Country Office, said,
“Overall, this initiative aims to harness the potential of cross-border flows to promote socio-economic development and growth. Improvements in remittance services will significantly enhance the lives and financial well-being of migrant workers in South Africa and their families in the region”.
Also speaking, BankservAfrica Executive Africa Business Development, Ruhling Herbst said,
“By opening up the market to more players on an interoperable platform, this payment system enables both banks and non-banks (such as money transfer operators, or fintechs) to access regional cross border payment infrastructure.”
It is interesting to note that the absence of a suitable payment infrastructure for low-value remittances, significantly inflates remittance transfer costs, thereby eroding the potential development impact of such remittance flows in Southern Africa.
