Mobile Money-enabled International Remittances and Financial Inclusion among Zimbabwean Migrants in the United Kingdom

Nyanhete, Alois Itayi (2023). Mobile Money-enabled International Remittances and Financial Inclusion among Zimbabwean Migrants in the United Kingdom. PhD thesis The Open University.

DOI: https://doi.org/10.21954/ou.ro.00016e9f

Abstract

Mobile money remittances have been effective in providing financial services to some previously unbanked groups. While much research has been done on domestic mobile money remittances, very little research has been done on the rapidly growing international dimension of mobile money remittances. This study contributes to filling the gap in knowledge by asking: Do mobile money-enabled international remittances (MIR) improve financial inclusion among the senders of remittances? Building on literatures on financial inclusion, financial capability and transnational family care, the study develops an expanded conceptualisation of financial inclusion that encompasses a socio-culturally sensitive analysis of access to and use of financial services as well as financial capability, and furthermore recognises the importance of digital financial services in achieving financial inclusion.

The study employed a mixed methods design and data were collected through an online survey (n=347) and semi-structured telephone interviews (n=23) conducted with Zimbabwean migrants in the UK. The investigation was supplemented by evidence from the analysis of secondary data from WorldRemit, a UK-based remittance service provider, relating to MIR sent by their customers to Zimbabwe. Analysis of variance tests, Pearson chi-square tests and Joinpoint regression analysis were employed to analyse the quantitative data, while theoretical thematic analysis was applied to interpret the qualitative data.

The investigation found that the benefits of using MIR included greater convenience, accessibility and security for users. However, the study did not find any effects on the financial capabilities of remittance-senders that could be directly attributed to using MIR. Nonetheless, focusing the investigation on the effects of remitting on the financial capabilities of the senders of remittances rather than the recipients generated new evidence that extends the body of literature on remittances and financial inclusion which overwhelmingly focuses on the recipients of remittances.

Macroeconomic challenges, government regulatory policies and market conditions in Zimbabwe negatively affected the use of MIR to send remittances by the senders who participated in the study, Cash-out fees that were charged when the recipients of MIR in Zimbabwe withdrew remittances from their mobile money wallets and a tax that was levied on MIR and other electronic money transfers by the Zimbabwean government made it more attractive for the remittance-senders to transfer remittances through cash-based methods instead of MIR. The existence of these additional costs incurred by users of MIR challenges the claims made by some proponents of digital financial inclusion that digital remittance services cost less than cash-based services.

The study thus demonstrated how the use of MIR to transfer remittances by remittance-senders is influenced by the macroeconomic and regulatory environment in the country they are sending MIR to. If the environment is conducive, then there may be more use of MIR in sending remittances and hence greater potential for MIR to promote financial inclusion. However, if the conditions are less favourable, then the benefits of using MIR could be eroded by the drawbacks that arise from the poor conditions in the receiving country, and the contextual factors could eventually become major constraints that compromise the positive effects of MIR in promoting financial inclusion.

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