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In Zimbabwe, Remittances are a Lifeline

The scramble is on for Zimbabwe’s billion dollar remittance industry with local and international fintech institutions vying for a share of the pie against legacy banks and traditional money transfer agencies. Diaspora remittances to Zimbabwe surged from $1 billion in 2020 to $1.4 billion last year. This mirrors the continent-wide significance of contributions by diaspora Africans to national development and sustaining family and friends back home. World Bank data shows that remittance inflows to sub-Saharan Africa grew in 2021 by 6.2% to $45 billion against a projected 5.5% this year due to economic recovery in US and Europe. The rise in remittance inflows into Africa coincides with foreign direct investment declines in countries such as Zimbabwe where FDI has fallen from $194 million in 2020 to $166 million last year. At the same time, some big legacy banking institutions such as Barclays and Standard Chartered are divesting out of Zimbabwe, leaving a big opportunity for fintech players to tap into the remittances market through partnerships and alliances or with local banks. Zimbabwean mobile money platform, EcoCash is the latest player to join the remittance market after setting up a partnership to enable receipt of remittances from international PayPal accounts straight into the US Dollar mobile wallets of recipients in Zimbabwe.