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Remittances —
a financial lifeline
that ICTs can strengthen.
With our history developing online financial systems and working in developing countries, fluidIT solutions was a natural partner for UNDP Somalia to support Somali money transfer operators (MTOs). Whereas very little formal banking services exist in Somalia, the MTOs provide a financial lifeline to Somali families and businesses, and can transfer funds to virtually anywhere in the country within one hour.
FluidIT Solutions met with virtually every Somali money transfer operator to review their needs and their existing systems. The key needs were security, remittance transfer processing, anti-money laundering detection and compliance, and efficiency. We also thoroughly reviewed and tested the best state-of-the-art remittance software platforms. Using a custom evaluation tool based on the MTOs' needs and industry best practices, we recommended suitable candidates, and helped develop a Request for Proposal for the project implementation.
Online banking, point of sale (POS) systems, cellullar-phone based technologies called mobile banking, and stored value cards (or "smart" cards) are exciting new technologies that are beginning to roll out in Africa and other regions. There are numerous opportunities to support the remittance and microfinance sectors through the appropriate use of information and communication technologies, both for MTO support, retail customer service, and the remittance of both currency and goods through online marketplaces. The Diaspora is playing an increasing role in channelling remittances into community development services, and in Mexico, the government has instituted matching grants that triple the impact of remittances. Hometown Associations provide one model for combining remittances with community development. An overview of the African remittance landscape, and recommendations of how ICTs can help them make a bigger impact, are shared in our remittance paper.
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