As economic hub of the region, South Africa attracts a large number of migrant workers from neighbouring countries, many of them without the necessary documentation and work permits. Regardless of their status, migrants send money home to families that are often dependent on these remittances for survival. Though the majority of South Africans are now banked, the SADC cross-border remittances economy remains largely informal. Informal remittances are not only risky and often expensive for the senders, but undocumented currency outflows on which no money laundering control can be exercised also present risk to the financial system.

Bringing cross-border remittances into the formal financial system is therefore in the interest of the market and policy makers alike. Yet formal remittances are often prohibitively expensive (a recent World Bank study showed South African corridors to be the most expensive in the world) and a number of regulatory barriers prevent undocumented migrants from using them.  This document provides an overview of the key issues as emerged from a number of research projects on this topic and consider the potential policy options for resolving the problems identified.