Migrant Remittances in Africa: An Overview
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through money transfer companies or informal providers, recipients may save the remittance in some type of financial institution rather than put it under the mattress. The steady stream of remittance receipts can also be used as a factor in evaluating the creditworthiness of recipients for microloans, consumer loans, and small-business loans (sought, for example, to purchase agricultural equipment) (Ratha 2007). Remittances also play a role in smoothing the income stream of poor households that face high income volatility and shocks. This reduced income volatility can make them more attractive borrowers. Data from recent household surveys conducted as part of the Africa Migration Project and an earlier survey in Ghana reveal that households that receive international remittances typically have better access to financial services, such as bank accounts, as figure 1.8 shows. Households receiving domestic remittances tend to be worse off in terms of financial access than households receiving international remittances, in part
households with bank accounts, %
Figure 1.8 Household Bank Accounts in Selected African Countries, by Remittance Status
80
60
40
20
da Ug an
a ny Ke
ria Ni ge
Gh an a
l ga Se ne
Bu
rk
in
aF
as
o
0
recipient country households with no remittances
households receiving internal remittances
households receiving international remittances from outside Africa Source: Authors’ calculations based on household surveys conducted in Burkina Faso, Kenya, Nigeria, Senegal, and Uganda in 2009 as part of the Africa Migration Project and Ghana Living Standards Survey in 2005–06.