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South Africa: High Bank Charges Force Immigrants to Send Money Home 'Hand-to-Hand'

11.05.2017

 | Source:  GroundUp: All Africa

A new survey by Cape Town-based refugee rights advocacy group The Scalabrini Centre has found that the high cost of sending money has kept migrants from using formal remittance systems.

When Tanaka* sends money back to her family in Zimbabwe, she heads to Cape Town's long-distance bus terminal to find passengers or drivers travelling to Harare.

She says it's too expensive for her to send money electronically. "So if I see someone is going to Harare, then I give 'hand-to-hand'". This informal system of cross-border cash remittances is based on trust and convention. Her family uses what she sends to buy food, pay school fees and get medicine.

Tanaka, in her mid-50s, is self-employed as a garment maker and tailor. She makes dresses, sheets, pillowcases and other items, which she sells for a small profit. When times are tough, she doesn't earn enough to send money home as regularly as she would like. "These days things are difficult. Even to look after myself is difficult," she says.

Since arriving in South Africa to look for work in the early 1990s Tanaka, has relied on the "hand-to-hand" informal remittance system.

At first the rands she sent home were exchanged into Zimbabwe dollars. Since April 2009, the money must be converted into US dollars. But the route the money travels has stayed the same: along the N1 from Cape Town to the Beit Bridge border post and then on to the Zimbabwean capital. "Sometimes we don't know each other," says Tanaka of the people she depends on to physically carry money to her family in Harare, a road trip of 2,500 kilometres.

For the informal courriers a "gift" of a few dollars makes it worthwhile. As for Tanaka, she says the hand-to-hand system is cheaper than sending the money via banks or money transfer services such as Western Union.

And she is not alone.

Migrants, refugees and asylum seekers in South Africa send billions of rands home to their countries of origin every year.

Some, like Tanaka, rely on long-distance buses and taxis. Others choose friends or family members. Then there are informal courier systems or small agencies who operate in a legal grey zone, and, for north African migrants, hawala brokers.

All fall outside the formal system, meaning the amounts sent and received can only be roughly estimated by governments and economists.

A new survey by Cape Town-based refugee rights advocacy group The Scalabrini Centre has found that the high cost of sending money has kept migrants from using formal remittance systems. "For most focus group participants ... the cost of remitting was identified as a significant obstacle and hardship for sending money," wrote the authors of the study, which is based on group interviews with 28 African migrants from eight sub-Saharan countries.

The study "They are Looking to us" will be released later this month. Read more on All Africa.

*Not her real name

Source: All Africa