The World Bank projected global remittances to plunge almost 20 per cent in 2020 due to issues related to the Covid-19 (coronavirus) pandemic, as it encouraged service providers and authorities to introduce measures to ease use of digital and mobile money platforms.
In a report into the expected impact of the virus on remittances and the communities reliant on these funds, it predicted 2020 would witness the sharpest decline in recent history with $445 billion being sent to low- and middle-income countries, down 19.7 per cent on 2019.
The organisation noted in some markets there had been efforts to encourage use of digital and mobile money channels by reducing or waiving fees for certain transactions.
However it urged: “Remittance service providers and authorities to work together to mitigate the effects of the crisis and encourage the adoption of digital payments, greater use of regulated channels, and wider availability of cost-efficient services”.
Among the ideas floated was the potential to have certain anti-money laundering and counter-funding of terrorism requirements “temporarily simplified” to incentivise online and mobile money transfers, following a “risk-based approach”.
Pointing to the African market specifically, the bank wrote: “The Covid-19 crisis has demonstrated the need for sub-Saharan African countries to promote procedures and regulations based on mobile and electronic payments and transfers.”
Issues contributing to the global slide in transfers are on both the sending and recipient sides. It cited economic issues reducing employment opportunities for some groups of migrant workers, while issues with agents closed during lockdowns hampered the delivery of cash.
World Bank Group president David Malpass said: “Remittances help families afford food, healthcare and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these”.Subscribe to our daily newsletter Back