To improve financial services for Moroccans, a new partnership has been launched between the United Nations International Fund for Agricultural Development (IFAD) and international money transfer operator, Moneytrans, which is part of the Platform for Remittances, Investments and Migrants’ Entrepreneurship in Africa (PRIME Africa) project.
PRIME Africa is an initiative that exists as a result of receiving funds from the European Union and is implemented by IFAD’s Financing Facility for Remittances (FFR).
The mentioned partnership is focused on increasing the level of financial stability and economic empowerment of Moroccan families who are interested in receiving services related to money transfer transactions to other countries. This project will involve efficient digital money transfer flows from Europe. The initiative also provides for the use of innovative solutions that contribute to expanding access to financial services.
IFAD is currently making efforts to build trust in digital payment transaction mechanisms. In this case, the focus is on interacting with families who are cautious about such tools due to the low level of awareness about financial services and technologies used in the relevant industry. Consumers of this group most often opt for traditional money transfers. Because of this, to some extent, prejudice, many families have not taken advantage of the benefits and opportunities provided by innovative financial service providers.
The new partnership is aimed at rural residents. In this case, attention will be focused on interaction with women and low-income households. Consumers will be provided with expanded access to loans and savings.
Pedro de Vasconcelos, head of the FFR IFAD program, is convinced that the initiative will become a catalyst for the transition to digital technologies. In his opinion, migrant workers’ access to advanced solutions in the sphere of financial services will be expanded. Pedro de Vasconcelos says that consumers of the specified category reject offers related to the use of non-cash payment methods. He noted that migrant workers are poorly aware of the new generation of tools that they will be given access to.
Patricia Llombart Cussac, the EU Ambassador to Morocco, says that the European authorities are aware of the importance of money transfers that migrants send to their countries of origin. She noted the special importance of these cross-border transactions for representatives of vulnerable segments of the population.
Patricia Llombart Cussac says that the project, which has received support from IFAD, will help reduce the costs associated with international financial operations so that migrants and their families can maximize the use of funds transferred to accounts opened in Morocco. She stated that in this case, measures will be involved to encourage the application of digital tools. In her opinion, the use of new-generation transaction methods will benefit the population and will become a factor of beneficial impact on the economy as a whole.
The European countries in which money transfers to Morocco are most frequently carried out are France, Germany, Belgium, the Netherlands, Italy, and Spain. Under the new partnership, about 18,000 Moroccan migrants living in the mentioned states are expected to become consumers of digital services. Access to innovative solutions will be provided on condition of opening an official bank account. This requirement may become a deterrent for some migrants.
It is also expected that about 31,500 money transfer recipients living in Morocco will benefit from the new initiative. It is known that 30% of them are residents of rural areas.
Of the funds transferred by Moneytrans, 70% will be sent to urban areas of Morocco. The remaining 30% will be distributed throughout the country. Moneytrans’ extensive network and reach make this company a good partner for expanding access to financial services.
Remittances, which accounted for 7.9% of Morocco’s GDP in 2021, are an important source of income for local families. The total volume of transactions sent to this country in the mentioned year amounted to $10.4 billion. The specificity of Morocco as a functional space in the sphere of financial services lies in the fact that there is fierce competition between money transfer operators and there is a regulatory framework that encourages the use of inexpensive mobile wallets. The specified country is a lucrative market because migrants from this geographical area live in many States and make up a large diaspora.
The cost of sending money transfers to Morocco is significantly lower compared to prices for similar services in other African countries (5.6% vs. 8.46%). Digital channels are a particularly advantageous solution since the transfer of funds to a mobile wallet in the specified state from a developed country in 2021 was 2.64%.
As we have reported earlier, Mastercard Partners With Cash Plus to Launch International E-Card in Morocco.
