New ways to send remittances

African blogger White African raises the issue of the middleman on African Remittances which is a $billion market. Before I continue I think it is important to also note speak about the "African Brain Drain" which in one sense is the other side of the remittance issue being that those who leave Africa to work in the West are the ones largely responsible for remittances.

To return to White African's post. He questions why the cost of sending money to Africa is so high compared to other developing countries. First there is the sheer volume (less for Africa) and secondly the "available options" for sending money. The two big players are Western Union and Money Gram which are very expensive. There are however other options now available to Africans such as:

In the past couple of years, we’ve seen voucher-based companies spring up that provide a third option, allowing Africans abroad to buy vouchers over the internet for their families back home. It’s a very interesting field, examples of this include MamaMikes in Kenya and Zimbuyer in Zimbabwe.

Finally, the third way that we’re starting to see money being transferred is through mobile phone credits. WIZZIT and MTN Mobile Moneyin South Africa; M-Pesa in Kenya; Celpay in Zambia and the Democratic Republic of Congo are leading the charge, and we’re likely to see more innovation in this area soon.

MamaMike is one online Web 2.0 site which has created new ways of sending remittances to Kenay. From their site you can help someone pay for the electricity through a voucher scheme or send them airtime. Recently MamaMikes added a feature for sending donations to help Kenyans in distress. They then published how the money was spent on their MamaMikes blog. Working with a group of Kenyan bloggers, volunteer members of MamaMikes decided on a budget "based on Red Cross requirements and set off to make the purchases which are listed on their site.

MamaMikes is an excellent example of online social entrepreneurship which brings together enterprise, service provision, social networks and activism blogging. Hopefully more and more African countries will develop similar sites and provide many more options to those who wish to send and receive remittances.

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