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Explaining the High Cost of Remittance to African Countries

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The World Bank recently released a study report with findings that the cost of remitting cash to African nations is higher compared to other continents all over the world. The report indicates that for every 200 dollars sent to Africa, a charge of 12% as remittance fee is imposed.

Inward and Outward Remittances

Since the African Diaspora community generates a lot of income, they are more willing to share the fortune with family back home, e.g. for family members to study and to get a bachelor degree.

The process of wiring money from a foreign country to a native country is identified as inward remittance. On the other hand, money wired from a bank account in a native country to a foreign country is described as outward remittance. In this case, the African Diaspora greatly contributes to the inward remittance of their countries of origin.

African Remittance Market

Due to the fact that these remittances make up to approximately 2.5% of the Gross Domestic Product in various countries in the region, it’s important to point out the critical role played by African immigrants who send money back home.

For instance, in countries such as the Gambia, Liberia and Comoros, online money transfer from natives abroad account for almost 20% of the GDP. This stresses the importance of remittances to the African continent.

Importance of Online Money Transfer

In the year 2017 for instance, African immigrants sent approximately $38 billion according to the World Bank report. In the report, Western African countries accounted for the greatest share of $21.9 billion for Nigeria, and $2.2 billion for both Ghana and Senegal.

A rising quantity of these remittances were passed on directly on the mobile phones of the recipients. This guide about sending money on mobile explains the setting and the benefits of this money transfer method.

The money plays a huge role in fuelling economic growth. Money transfer services such as Western Union and Moneygram are amongst the most commonly used. However, a rising number of new fintech startups explore the remittance market. The British remittance company Worldremit serves Ghana with low fees. Bank transfers are possible as well as sending money to mobile wallets.

Various studies indicate that online money transfer from the Diaspora plays a pivotal role in the native country. Inward remittances directly benefit recipients, therefore improving their lives. These monies are mostly used to cater for basic needs, but can also be utilized as an investment for start-up businesses.

One of the best things about remittances is it eliminates corruption. Since the money is directly sent to individuals, there is no open avenue for corrupt dealings played by middlemen or corrupt government officials. According to Mathieu Jacques, manager of ACP – EU Migration Action Programme, the security of remittances lies in the way in which they are dispersed.

Cost of Remittance in Africa

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Studies reveal that it costs more to send money to Africa compared to other continents. This implies that fees charged for online money transfers in the continent consume a majority of the cash sent in the first place, meaning communities, families and individuals end up receiving less money than the intended amount.

According to World Bank figures, remittances cost almost 10% of the payment amount while the global rate is slightly over 7%. This setback is attributed to various factors such as inefficiencies in processes, online money transfer companies charging exorbitantly and excessive bank regulations just to mention a few.

Reasons for High Remittance Charges in Africa

Excessive bank regulations are implemented to make sure that online money transfer companies do not help in money laundering practices. The checks have a positive influence in discouraging and deterring terrorist funded activities, however, they throw the cost of remittance through the roof, adversely affecting innocent people that are receiving money legally. Reducing the number of regulations for transactions on small amounts will be advantageous to recipients.

Secondly, in most African countries, natives do not have a choice on which online money transfer company to use. This is usually the case since government owned post office possesses exclusive rights to partner with a particular money transfer company. Since most individuals have access to the post office, they are by default the exclusive remittance points especially for those living in rural areas. The effects of monopoly in business are well known since they have the free will to charge higher transaction fees.

Banking networks that form a correspondence attribute to the high remittance overhead charges. Transferring money from one country to another forms a rigorous process that involves various sister or partner banks. In such a scenario, each bank claims a fee in processing payment, a feature that has a domino effect on the final cost of the transaction which is paid for by the sender.

Author bio:

Jens Ischebeck is an Africa focused website publisher. The two main sites are apps-for-money-transfer.com (international money transfer apps for inward and outward remittances) and fast-bachelor-degree.com (accelerated bachelor degree by inline studying).

     

 



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5 Ways For Small Businesses To Fight Established Companies In The Local Market

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“Your most unhappy customers are your greatest source of learning.”
Bill Gates

The pressure on small businesses is much more significant than anyone can imagine. Only if you are a small business owner, then you can understand what it means to fight established corporations to sustain your business and keep your neighbourhood yours.

Most small businesses lose the fight because they lack the right resources, like enough capital, effective strategies or a powerful team, etcetera. However, they don’t realise that they still have a chance to keep their share of the neighbourhood by believing in themselves and employing the correct approach.

Read ahead to learn about some incredible ways that will help you win, summarised by Arcadia Online experts:

Personalise

The advantage that small businesses have over big corporations is the knowledge of the neighbourhood. “With knowledge, comes wisdom”, and they can use it to personalise their marketing and sales approach. Whom would your customers’ trust: a local brand that they know and who knows them or a company, who consider them just a bunch of numbers on their sales sheet? The answer is pretty straightforward; however, the approach needs more significant efforts than usual. The next method will help you understand this further.

Tap the emotions

Emotion-selling has proven that you can sell anything if you can tap into the emotions of your target audience. Apart from explaining the benefits of your customers, you must tell them how your products and services are designed especially for them. Your target customers should feel valued, and if your marketing strategy can achieve that, your sales will skyrocket in no time. Be it cleaning services, promotional mugs or dietary eatables; it does not matter what you are selling, what matters is how you are selling it. Make them believe that you value them, and they will be convinced to make a purchase.

Your employees can make a significant difference
Treat your employees like gold. Although you may not be able to pay them as much as established organisations, if you treat them right, they will ensure wonderful results. The primary concerns that local businesses have are lack of skilled employees and lack of financial resources to sustain them. If you can be a great leader, then they will be an efficient team; always remember this. Your employees may have the same mindset as your customers because they are locals, they know the market better than anyone. So have an open-mind regarding opinions. This will make sure that your products and services are well suited for your target audience.

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Don’t target the entire neighbourhood
Grab a niche and run with it. Yes, you heard it right! As already mentioned above, you may not have sufficient resources required to hire and sustain skilled employees, let alone target the entire market. If you can produce products and services for a niche and are able to attract them towards your brand, you will see significant growth of your business. This will reduce your market research, suppress your production abilities and make sure that your quality is up-to-the-mark.

Prefer quality to cost
Quality triumphs price at all times. Most established companies have earned trust and loyalty because they don’t compromise with their quality; however, their prices increase as the fame does. This is a drawback that they have, which you can exploit to your advantage. If you are catering to a niche audience, then you don’t have to increase the number of employees or the spend on raw materials and other expenses, right? You can use these savings to drop your margins a little further because you should focus on sales maximisation and profits will follow. Never compromise with your quality and keep your products & services within the range of your neighbourhood.

You should not lose hope if you are not able to fight the established companies; believe in yourself and follow the tips mentioned above to ensure success at all costs.

“The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try.”
Debbie Fields



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Safaricom Home Fibre Users Get Optional Internet Plus Package Bundled With Mobile Data and More

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Safaricom has been on a roll recently, releasing new products every other day in what the company terms as responding to their customers’ needs. The latest product off the Twaweza train is targeted at Safaricom Home Fibre users.

The service which has been gaining traction slowly across the country has connected over 48,000 households with an internet connection and has laid over 5,000 kilometres of fibre optic cable. The new Safaricom Home packages will be accessible to existing and new users.

At the moment, Safaricom Home offers internet packages of 5mbps (Bronze), 10mbps (Silver), 20mbps (Gold) and 40mbps (Platinum). The new Internet Plus packages will be built on top of these existing packages but offer additional mobile data, talk time and SMS. The Internet Plus packages are as follows:

  • Bronze: 5mbps + 2GB mobile data + 100 on-net minutes + unlimited SMS at Kes.3,000
  • Silver: 10mbps + 4GB mobile data + 200 on-net minutes + unlimited SMS at Kes.4,499
  • Gold: 20mbps + 4GB mobile data + 200 on-net minutes + unlimited SMS at Kes.5,999
  • Platinum: 40mbps + 4GB mobile data + 200 on-net minutes + unlimited SMS at Kes.10,999

Safaricom Home Internet Plus

The new packages are already available and can be accessed through USSD *400#. As part of the packages, customers have the option to either keep the data, minutes and SMS to themselves or sambaza all of them to another Safaricom user, not necessarily a Safaricom Home subscriber.

Despite the SMS being labelled as “unlimited”, it will be under a fair usage policy which could mean that there’s a ceiling of how many SMSs one can send, this is to prevent abuse.

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7 Impactful Web Design Trends For 2018 for Designers

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You have to admit that the digital world is continually evolving. Aside from the massive impact brought about by the rise of social media, a lot of mix and matches are coming out for web designs that will surely demand a better experience for all types of business.

The web design experts claim, considering the reality that when you have a business no matter how small or big, a good way to make it into a success is to include, develop, and build a website for it. However, building a proper website doesn’t just end by introducing your products and services.

Hence, choosing the latest and trendy landscape for your web design should promote an incredible customer relationship. If you’re looking for a great web design that’s a sure hit in the market, these trending points and tips will help.

Deliberately Crafted Typography

Admit it or not, carefully choosing your website fonts will surely catch the interest of every website visitor you have. The evolution and diversity of fonts in web designs is impactful to all of your prospective customers at any given time and situation.

More Innovative Formatting

Formatting in web design refers to your exploration of colors and patterns. When you choose the type of web formatting, it should be engaging and dynamic. Always take advantage of an updated CSS grid and explore available operating systems which gives an on-point layout.

Fiery Colors and Bolder Gradients

Choosing colors will always be a basis for all web designers to show their creativity. Pantone and Ultraviolet colors will give a trendy vibe for your website as this would establish an eye-catching and vivid design.

Shadows and Depth

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Due to the diversity of the digital world when it comes to graphics display, a drop shadow will give a massive impact to your website. Drop shadow is a technique wherein designers would try to achieve a more natural way of shadowing. Obtaining a more natural shadow is working on the image depth rather than overwhelming it.

Geometric Elements

Due to the complexity of the digital world, people nowadays tend to experience nostalgia. On the other hand, because of the more complex geometric elements that a website has, the more people become interested in it. These geometric elements come in every shape and size that a designer can work with.

Website’s Micro-Interactions

Interactivity is a strong trend that is favorable for any business. Consider creating micro-interactions on your website will surely be a hit for your customers in any given market. This website micro-interaction refers to subtle animations you include that may convey a more immersive and interactive dialogue between the visitor and your website.

Master Wide-screen and Mobile Designs

Since most of us are living in a digital world and wanted everything to work on the go, mastering wide-wide screen means being able to access your website’s information using mobile devices. Make your design more dynamic, so it can work and look the same when visitors use a mobile phone.

Takeaway

We are in the last quarter of this year but the evolution of Web design is continually happening. Therefore, your goal of achieving an impactful web design should rely on the trendy tips listed above and a question “Does it keep my site visitors interest and capture their attention?” You decide.



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