Evaluation of mechanisms implemented since 2011 on how to reduce remittance costs
The Ministry of Malians Abroad has asked the EU ACP Action for Migration, implemented by the International Organization for Migration - IOM, to review the mechanisms that have been put in place since 2011 regarding remmittance and migration.
In particular, the mandate of this assistance was to review the mechanisms that relate, inter alia, to the following:
- The lifting of the exclusivity clauses in the representation contracts of the Transfer Companies of Argents (STA);
- Improving the collection, updating, exchange of information on migrant statistics and transfer flows;
- Financial education and information on the costs and terms of financial intermediaries;
- The definition of a communication strategy adapted to migrant audiences;
- The establishment of a guarantee fund on migrant initiatives to promote access to banking and financial services;
- Put in place a mechanism for monitoring and securing investments through the support of migrants and their families in both areas (training, orientation, monitoring) integrating financial intermediaries at the outset;
Regarding the lifting of the exclusivity clause in the representation contracts of the Transfer Companies of Argents (STAs), now there are sixteen money transfer companies and each Malian bank has agreements with several of these companies. There is an alignment between STAs of transfer prices which are between 4.6% and 4.75% of the total. Transfer prices of mobile phone companies, which have recently entered the market, are between 2% and 3.5% of the total sent. Thanks to these developments, the banking rate, which was 11% before mobile telephones in the WAEMU zone, is currently 15%.
With regard to improving the collection, updating, exchange of information on migrant statistics and transfer flows, in general there is still a shortage of qualified personnel in terms of data and a systematic sharing gap between the data custodians and users. There are also assets, such as the Migration Database (BDM), which is an important migration database in finalization.
In the field of financial education and information on the costs and terms of financial intermediaries, now there are initiatives led by non-governmental organizations with funding from the European Union. The Ministry of Malians Abroad has published The Guide for Malians Abroad, which will be an important tool, and in the media there are some radio and television programs. However, there are no institutions, or resource centers, that can put together all the issues related to migration (transfer pricing, legal issues, government and private initiatives, etc.) to produce packages information / training to make available to the media.
The establishment of a Guarantee Fund on migrant initiatives to promote access to banking and financial services. Migrants are considered a risky public. Very few banks have a sectoral approach to the market. The lack of follow-up of the financing after their granting is a cause of many losses in the sector of the guarantees. A choice will have to be made between the creation of a Bank of the Malians Abroad and the establishment of Credit Lines / Guarantee with Regional Vocation (to know with the banks better established in each region). One risk to consider is that a specificity of guarantees for migrants risks turning into a perpetuity of lost aid. There is a lack of articulation between rural guarantee and investment mechanisms and investment measures for migrants.
Regarding the establishment of a mechanism for monitoring and securing investments through the support of migrants and their families in both areas (training, orientation, monitoring) integrating financial intermediaries at the start, there is little or no information empirical evidence of migrant practices in business creation or development. The creation within API Mali of a unit responsible for monitoring the investment projects of the Malians from outside has not yet taken place. Nevertheless, Api Single Window is an important asset and a useful entry point for business start-up procedures. The lack of support for investors in general and migrants in particular throughout the life of their projects remains the main problem to be solved.
GFMD 2018 - Background Paper RT Session 3.2 "Beyond Remittances: leveraging the development impact and promoting the transnational engagement of diaspora and migrants"