Remittances | West Africa | Test and Transition
The development problem: Remittances play an important role in domestic resource mobilization, representing up to 5% of GDP in West Africa and acting as a form of insurance against macroeconomic shock. However, several major barriers to the use of remittances exist. These include high fees and trust issues, with average global remittance costs reaching 8% of the amount sent.
The innovation: Afrimarket provides a low-cost cash-to-goods service for sending remittances such as food products, sanitation products and construction materials to West Africa, serving as a compliment to traditional money transfer operators. The innovation increases remittance flows through reduced sender costs using a mobile, no-middleman model, and also increases trust levels by allowing users to send specific products to recipients or to make use of a voucher system.
GIF’s investment: A €2m preferred equity investment (as part of Afrimarket’s Series B equity round)
Why we invested:
- Unique solution applying an eCommerce approach to a development problem
- Remittances are an important source of funds for GIF’s target beneficiaries
- Significant traction with key cash-in partners
- Strong team with significant logistical and eCommerce experience in Africa