Mobile Money’s role in International Remittance

International remittance, the transfer of money home by a foreign worker, is a key area in which mobile money can potentially play a very valuable role in economic and social development (micro financing has proven in recent years to be of great importance in many countries).

The International Fund for Agricultural Development estimates that global remittance is in excess of $300 billion (USD) annually which is greater than the sum of all international aid. For instance the World Bank estimates that in 2008 (http://data.worldbank.org/indicator/DT.ODA.ODAT.CD) India, China and Mexico received approximately $45 billion, $41 billion and $25 billion respectively. Furthermore, in nearly 40 countries, remittance represents a share of GDP greater than 10%, such as in Tajikistan (45%) and Moldova (38%).

However, despite the significant role of international remittance for developing nations, more than 90% of the world’s poorest have no access to basic banking services. Yet there is near universal saturation of mobile technology.

However there are still significant barriers, both technical and regulatory, to mobile money development. And although the key innovative players in the mobile money space are from the the developing world, they are in no position to influence the developed world to take the necessary steps needed.