Mobile money: A product of choice for women to send and receive remittances


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Mobile money: A product of choice for women to send and receive remittances

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Women constitute the majority of remittance recipients globally and remittances have an impact on both women’s actual income as well as on social norms

Remittances are believed to directly touch the lives of 1 billion people globally, maintaining millions of receiving families above the poverty line with remittances often representing 60 per cent or more of household income. Globally, women represent almost half of the 258 million migrants and back home in the countries of origin, women represent the majority of remittance recipients. For example, UNCDF research shows that 60 per cent of remittance recipients in Cambodia, Lao PDR and Myanmar are women and that 75 per cent of these women live in rural areas. In Nepal, women represent 58 per cent of recipients. The same trend can be found in Latin America where women are the main recipients of remittance and play a central role in managing their family’s day-to-day household spending. In Guatemala, they account for 63 per cent of main remittance recipients, a number that goes up to 70 per cent in Colombia.

Migration also has a direct impact on social norms in the country of origin, especially for women: social remittances also matter. In addition to money, migration also entails the circulation of ideas, practices, skills, identities, and social capital between sending and receiving communities.

Remittance patterns are gendered

According to new research presented by CeSPI at the International Experts Roundtable, women migrants in Italy earn on average 24 per cent less than men. While this does not affect their propensity to remit (women send on average 12 per cent of their revenues every month, compared to 13 per cent for men), it has an impact of their remittance patterns. For example, the average value of remittances sent by women was €425 compared to €469 for men. These results echo findings from previous research that has shown that women migrant workers tend to send smaller amounts of money more often and for longer periods than men. Relative to their income, women senders may be paying over 20 per cent more than what men pay.

In receiving countries, women and men also tend to use the money received differently. Women receiving remittances tend to channel more funds into their family’s healthcare, food and nutrition, shelter and education than men. However, remittances are not just about supporting the basic needs of the families in home countries, investment goals are also important for women migrants, although to a lower extent than for men. Significant differences also exist across migrant communities. For example, CeSPI’s research reveals that Senegalese migrant women play an important role in launching and supporting production businesses back home (a remittance goal for nine percent of women migrants surveyed), while investing in real estate is a goal for 29 per cent of Filipino migrant women.

Since the successful launch of M-PESA back in 2007, the mobile money sector has expanded and there are over 866 million mobile money accounts across 90 countries. Initially developed as a tool for domestic transfers and payments, mobile money has revolutionised the way in which people send money across borders. In 2018, mobile money could be used to send or receive international transfers in 56 of the 90 countries where mobile money is available. Mobile money has a number of distinctive characteristics that make it particularly appealing to women compared to other remittance channels. In fact, in some markets, women have been early adopters of mobile money as a channel to receive remittances. For example, data from WorldRemit indicates that in 2014, 20.46 per cent of their female customers globally would use mobile money as payout mechanism compared to only 13.99 per cent of men. In 2018, this was the case for 28.24 per cent of women receiving funds through WorldRemit and 28.16 per cent of men.

  • First of all, mobile money is significantly cheaper than cash-based remittance services. According to the World Bank’s Remittance Prices Worldwide, the average cost to send remittances globally was 6.84 per cent in June 2019. This global average however masks stark differences across regions and Sub-Saharan Africa remains the most expensive region to send money to, which remittance costs above 15 per cent across many corridors. GSMA August 2017 study showed that the average cost of sending US$200 using mobile money was 1.7 per cent of the transaction. This illustrates the role that mobile money can play in supporting the achievement of SDG target 10.c. Even when mobile money cash-out fees are included, the cost of sending US$200 is 3.9 per cent which is still significantly lower than the average cost of sending remittances via other formal remittance service providers, including banks and MTOs. By increasing the amount of money that goes in the hands of families in receiving countries, mobile money has a direct impact on poverty reduction. In fact, in countries with remittances as a percentage of GDP of 5 per cent or more, a 10 per cent rise in remittances reduces the poverty headcount ratio by about 3.1 per cent.
  • Mobile money is particularly compelling for low-value remittances, where the savings compared with other remittance channels are most significant. As a result, the average value of international remittances sent through mobile money tends to be much lower than those sent through alternative channels, and transactions also tend to be more frequent. While the average size of remittances is around US$500 globally, the average value of remittances sent through mobile money is around US$80. This is making mobile money the ideal tool for women migrant workers.
  • Mobile money also offers increased convenience, privacy and security, which are characteristics that women particularly value. With mobile money, transfers can be made from any location at any time without the need to travel to an MTO agent or bank branch, and they are received instantly. This feature is very important for women in developing markets, which tend to be both time-poor and less mobile than men. Using mobile money, women can send and receive remittances independently from the safety of their home, without having to worry about remittance agents violating their privacy and informing their husbands for example of the frequency and amounts of their transactions. Increased convenience and privacy through mobile money offer women greater control over their financial lives, and contributes to their empowerment.
  • Interestingly, the use of mobile money as a remittance channel seems to be leading to more women receiving remittances directly, compared to cash-based remittance channels. People using traditional cash-based remittance channels typically send one-large value remittance every month to one person, typically a man, who then disburses the amount received among several people. With mobile money, people send more frequently lower amounts to a greater number of recipients, including women. This is important because receiving money directly enables women to have much more control over household budgets and increases the likelihood of greater economic empowerment and decision-making for women.


Mobile money can help accelerate women’s financial inclusion, economic empowerment and poverty reduction

The ability to receive remittances on a mobile money account provides the opportunity to join the digital financial ecosystem and to access a broad and sophisticated range of digital financial services beyond remittances. Women who receive remittances on a mobile money account have the option to either store the received funds safely on their mobile money account or use it in other ways, such as making digital payments to buy milk from a local merchant or pay their children’s school fees or utility bills. In Kenya, remittances received on an M-PESA account can also be directly reinvested to buy government bonds through M-Akiba.

In many countries, the gender gap is lower with mobile money than with traditional financial services and mobile money is helping with closing the gender gap. Globally, 65 per cent of women have an account compared with 72 per cent of men. This means that women are 10 per cent less likely than men to have a financial account. This number reaches 24 per cent in Sub-Saharan Africa and South Asia. However, in many, the gender gap in mobile money account ownership is lower than the gender gap in bank account ownership. In Côte d’Ivoire, for example, men are twice as likely as women to have an account with a financial institution (19 per cent ownership for men versus 10 per cent for women) while 30 per cent of women have a mobile money account, compared to 38 per cent of men. In Kenya, gender is not a significant variable in determining access to mobile money accounts – though it is for formal financial institution accounts.

Beyond financial inclusion, mobile money contributes to reducing poverty of women. Research from Tavneet Suri and William Jack in Kenya found that, since 2008, access to mobile money services increased daily per capita consumption levels by two per cent, of Kenyan households, significantly contributing to lifting them out of extreme poverty. Consumption in female-headed households increased twice as much as male-headed households, suggesting that mobile money disproportionately benefits women.

Going forward, creating an enabling regulatory environment around mobile money-enabled remittances will be critical to allow women to fully benefit from the advantages of digital remittance channels. The GSMA stands ready to support interested parties to work jointly on achieving this goal and accelerating women’s use of mobile money for remittances.

Claire Scharwatt is the Director of Policy and Advocacy at GSMA - a trade body that represents the interests of mobile network operators worldwide.

This article was originally published on the GSMA website.