By Mark Kawalya
The International Fund for Agricultural Development (IFAD) and Stanbic Bank Uganda (SBU) have entered into a partnership that will reduce the expenses incurred by Ugandan migrant workers when sending money home. The process leverages FlexiPay, a digital payments platform that is offered by Stanbic Bank. Aside from remittances, the partnership will also include the provision of digital and financial training for remittance recipients, especially those residing in rural areas. The trainings will educate on the benefits of a saving culture and promote the uptake of digital finance within these communities.
Currently, Ugandan migrant workers send money to Uganda at an average cost of 11.3%. This figure exceeds the global average of 6.25% and is even higher than the African standard of 8.35%. This cost is more than triple the Sustainable Development Goal (SDG) target of 3%.
Under the umbrella of the European Union-funded PRIME Africa initiative, IFAD and SBU have partnered to streamline digital remittances in rural Uganda. Their collaborative efforts will involve the integration of remittance service providers and payment hubs into SBU’s FlexiPay, an electronic wallet that provides access to financial services for unbanked individuals in Uganda.
Sam Mwogeza, the Executive Head for Personal and Private Banking (PPB) at Stanbic Bank Uganda, highlighted the user-friendly nature of FlexiPay, emphasizing its simplified onboarding process for unbanked clients. “The wallet allows its users to store and transfer money, pay bills, top up airtime, and transact through a feature phone as well as a smartphone. We are delighted to extend affordable international remittances in partnership with IFAD through Flexipay and reach rural remittance recipients,” he said.
The majority of remittances, approximately 75%, are directed towards poverty alleviation and improving access to essential needs such as nutrition, healthcare, housing, and education. The remaining quarter supports entrepreneurial initiatives and facilitates access to financial products like savings and credit, which ultimately promotes financial inclusion.
IFAD’s new partnership with Stanbic Bank signifies a significant milestone for Ugandans abroad. They will now incur transaction fees in line with the SDG target of less than 3% when sending money to recipients’ FlexiPay wallets.