The Remittance Access and Innovation (RAI) programme is a two-year, regional initiative that supports sustainable development by transforming remittance ecosystems to enable remittance flows and improve financial inclusion in Africa.
Worldwide, more than a quarter of a billion people live outside their home country, and many are responsible for supporting their loved ones back home. This support often takes the form of remittances, which are the lifeblood for many developing economies. Yet, the reach and impact of remittance ecosystems remain constrained due to dated and cumbersome identity verification processes. This is particularly relevant for members of rural and low-income groups, who are often costly for financial institutions to serve and are perceived as high risk due to their inability to meet the identification requirements. The result is high levels of financial exclusion for the people who need them most.
COVID-19 has shone a spotlight on the importance of these remittance flows for vulnerable communities in developing and emerging economies to weather crises and bounce back. Global standard-setters, national governments and multi-national corporations have all embraced digital solutions that have made it possible for much of these remittance flows to continue through COVID-19.
Nowhere has this been more evident than in identification requirements in banking where new and innovation approaches to know-your-customer (KYC) and customer-due-diligence (CDD) requirements have been rapidly adopted.
The Financial Action Task Force (FATF) released guidance on identity proofing and related CDD and KYC innovations for a more risk-based, inclusive approach to promote financial inclusion, anti-money laundering and the combating of the financing of terrorism. The Alliance for Financial Inclusion (AFI) has launched a toolkit to assist regulators with a practical framework for implementing the recent guidance in their jurisdictions. Many national and regional jurisdictions around the world are already acting on it.
This regional initiative aims to build on this momentum by building more inclusive remittance ecosystems through the effective application of FATF guidance around identification requirements and verification. In doing so, this programme strives to support the remittance ecosystem and directly benefit many low-income and rural remittance families with reduced onboarding requirements and costs and increased use of digital financial services to reach their daily sustainable development goals. The Remittance Access and Innovation programme develops and supports identity proofing innovations for affordable remittance transfers and inclusion across seven countries: Cape Verde, The Gambia, Ghana, Ethiopia, Kenya, Morocco, Senegal, South Africa and Uganda.The programme is supported by the European Commission and is driven by IFAD’s Financing Facility for Remittances (FFR) and Cenfri. To find out more or get involved in improving access to remittances, contact Masiiwa Rusare.