A South African bank last week launched an instant money transfer facility from that country to Zimbabwe, as financial institutions scramble to offer a service that has long been a preserve for cross- border transporters.
BY NQABA MATSHAZI
FNB said it had conducted extensive network research and come up with a product that is in demand and accessible to most Zimbabweans living in that country.
The head of digital and alternative banking for FNB Africa, Yolande van Wyk said the bank will charge at least 4,5% of the money that was being remitted.
For Zimbabweans in South Africa this may come as good news, although some remain skeptical and say they will stick with informal cross-border transporters, known as omalayitsha.
“The good thing about FNB is that they allow all Zimbabweans, even those seeking asylum and those without permits to open accounts, so it might be a hit,” Thembani Moyo, a Zimbabwean based in South Africa said.
FNB estimates that at least 1,9 million Zimbabweans based in South Africa remit about US$700 million to Zimbabwe annually, but this is often through unregistered facilities.
The World Bank, FNB said, estimates that a fifth or US$140 million of money sent to Zimbabwe from South Africa was spent on the cost of getting it here.
According to a World Bank chart of remittance percentages, FNB, Nedbank and Standard Bank charged over 18% to send money to Zimbabwe, while Absa charged 15% for online services.
Western Union charged 8,7% for cash to cash, Bank of Athens charged 39% and Bidvest 32%, bringing the total average charge for the first quarter of 2013 to 17%.
The charges for cross-border transporters vary, with the average fee being 20% of the money remitted, while in more efficient remittance corridors, the charge is between 3% and 5%.
Despite the unreliability of informal remittance methods, a study by a South African rights group, People Against Suffering Oppression and Poverty (Passop) last year said Zimbabweans in South Africa were sending home up to US$900 million dollars annually.
The study revealed that of an estimated three million Zimbabweans, 90% sent money home regularly, sending an average of a third of their incomes.
“These findings are higher than those from most other remittance corridors in various parts of the world, which underscores the depth of the current dependence on remittances in Zimbabwe,” reads the report.
The report estimated that 40% of the remittances were repatriated back to Zimbabwe.
“This accentuates not only the importance remittances currently have in supporting livelihoods, but also their effect on the Zimbabwean economy, being one of the most important sources of foreign currency inflows,” continues the report, Strangling the lifeline: An analysis of remittance flows from South Africa to Zimbabwe.
Latest figures for remittances from the Reserve Bank of Zimbabwe were not available, but the 2011 data reflected that US$263,3 million had been sent to Zimbabwe from abroad.
‘Bank transfers cannot replace omalayitsha
For Siphathangani Ncube omalayitsha are not just a money transfer service, but have become part of her culture.
Ncube, who has three children in neighbouring South Africa, says the cross-border transporters not only delivered money, they brought groceries and furniture.
“Had it not been for them [omalayitsha] my children would still be here without jobs, they were taken to South Africa by these guys and I paid them in installments,” she said.
Ncube said omalayitsha offered a personalised service, which she could not get from either banks or money transfer agents.
She said several of her neighbours’ children were omalalyitsha and this was employment creation, as they would not ordinarily have found jobs elsewhere.
“We cannot wish them away, they are part of us,” she said. “If we do not support them, they will have nothing else to do.”