The Peer-to-Peer Meeting: an exchange of knowledge, practices and information October 2016 Nairobi, Kenya

Transcription

1 The Peer-to-Peer Meeting: an exchange of knowledge, practices and information October 2016 Nairobi, Kenya This Action is funded by the European Union

2 Contents Introduction and Purpose of Event 3 Objectives of the P2P Exchange Meeting on Remittances 4 Key Thematic Areas 4 Feedback from the break-out sessions Main challenges and future outlook 5 Session #1: Adequate and Affordable Financial Services to Migrants and Their Families 5 Session #2: Promoting Financial Inclusion & Literacy: From Policy to Diaspora Investment 6 Session #3: Data Management and New Technologies Developing Tools to Overcome Barriers and Borders 7 Final Recommendations 9 1. Create an enabling regulatory framework for cross border payments 9 2. Improve domestic payments infrastructure and access, particularly in relation to new technologies 9 3. Improve data collection on remittances and payments system 9 4. Improve transparency Assess the informal sector Encourage informal into formal Consider introducing incentives for lowering costs of remittances Facilitate diaspora investment Improve coordination among stakeholders 11 Platform Development 11 Conclusion 11 Next steps 12 Annexes 13 Peer-to-Peer Exchange Meeting on Remittances 2

3 Introduction and Purpose of Event Background Over the past decade, the potential role of Remittances in development as well as alleviation of poverty in developing countries has garnered strong consensus. Remittances are an important source of income for many people across the world. Formal remittances to developing countries are estimated at USD600 billion for 2015, roughly three times larger than overseas development assistance (ODA) and more stable than most other forms of finance. Sending money home can be expensive relative to the often low incomes of migrant workers and the rather small amounts sent (typically no more than a few hundred dollars or its equivalent at a time). In 2015, the UN adopted the Sustainable Development Goals (SDG).SDG 10.c target is by 2030, to reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent. Furthermore, the Valetta summit of 2015 and other political and international gatherings have encouraged quicker progress towards this goal to be made for Africa. Development. During the subsequent two years, the parties focused their discussions on three priority areas: remittances, readmission and visas. In 2012, concrete recommendations on these three areas were endorsed by the ACP-EU Council of Ministers. Trafficking in human beings and smuggling of migrants was added in Recommendations on remittances included, among others, the need to pursue the efforts to significantly decrease the costs of transferring remittances, both from the EU to ACP countries and between ACP countries and to reinforce the capacity of the relevant authorities in the area of collection of reliable data, processing and analysis of the data both at EU and ACP level, including through peer to peer cooperation and exchange of best practices. Both the ACP-EU Migration Action (the Action) and the African Institute for Remittances (AIR), have been working towards supporting activities on remittances in the ACP countries. They also share the common objective of promoting activities on the collection & dissemination of good practices on remittances. In 2010, the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU) launched the ACP-EU Dialogue on Migration and Peer-to-Peer Exchange Meeting on Remittances 3

4 Objectives of the P2P Exchange Meeting on Remittances It is in light of this that the Action and AIR agreed to jointly co-organize the first Peerto-Peer Exchange Meeting on Remittances to inform the Action s stakeholders on positive initiatives on remittances, to exchange on challenges, lessons learned and good practices identified through the implementation of activities of the Action, as well as to followup and discuss the joint ACP and EU Dialogue Recommendations, and to pursue a more in-depth dialogue on remittances and the challenges that need to be addressed to reduce remittances transfer costs. The objectives of the sessions were to: 1. Exchange on challenges, lessons learned and good practices in the remittance market identified through the implementation of activities of the Action with a focus on the recommendations of the ACP-EU Migration Dialogue on remittances; 2. Showcase the implementation of the recommendations on remittances of the ACP-EU Dialogue at local level; 3. Inform the Thematic Report on Remittances and Good Practices Publication that the Action will produce; The P2P Exchange meeting was held in Nairobi, Kenya between 17th to the 19th October 2016 and was attended by around 65 participants. The participants represented a range of stakeholders including policy makers, government representatives, private sector operators, development professionals, international organizations and a broad range of remittances experts. Key Thematic Areas Following introductions from the lead Action Expert on the state of the global remittance markets and contributors from the main international organizations working on migration and remittances 1, the exchange meeting went onto focus on three key thematic areas identified as critical to the group of stakeholders. Each topic was introduced and followed by interactive sessions where delegates split into smaller groups to discuss a number of pre-prepared questions on each of the following themes: Remittances as investment Engaging Migrants and the Formal Sector 2 Addressing Obstacles in Remittances 3 New Technologies Mobile Money Overcoming Borders 4 4. Feed the ACP-EU Dialogue on Migration and Development with concrete examples on remittances for discussion coming from ACP countries and based on the technical assistance intervention and non-state actors initiatives supported by the Action; 5. Exchange on actions to be taken to reduce the remittances transfer costs to less than 5 per cent. 1. Please see Annex I 2. Please see Annex II 3. Please see Annex III 4. Please see Annex IV Peer-to-Peer Exchange Meeting on Remittances 4

5 Addressing some of the Main Barriers Feedback from the break-out sessions Before and during the Peer to Peer Exchange Meeting on Remittances, several critical barriers to improving the remittances markets to ACP countries (and in turn reducing costs) were identified. Following the three sessions/thematic areas mentioned above, the delegates were divided into three groups to examine in depth specific area of interest to them. Listed here is an overview of the main conclusions from these sessions. Session #1 Adequate and Affordable Financial Services to Migrants and Their Families Key features for remittances services The group identified key features for any remittance service aimed at migrants and their families, these included: Good accessibility it is essential to consider rural areas; Fair exchange rates; Fast; Safe; Transparent. Financial Inclusion It was also recognised that the market conditions need to be right for leveraging remittances for financial inclusion. Some of the key themes and opportunities identified in this regard included: How to build trust? This can be done by: - Transparent services; - Accountability. Allowing remittance receiving to be part of the building of credit history for recipients; The provision of bank accounts in migrants home countries. Opening accounts in the country of origin compared to the host country: what are the different barriers and challenges?; Financial education. On products available as well as tools on how to save and budget; E.g. Banks offering fit for purpose products that also provide tools for learning how to save and budget; Financial accountability. Ways in which migrants can gain knowledge about the use of remittances. This may be through 100% control (i.e. a service so they can directly pay school fees), or accountability tools (i.e. reports on advancement of home building); Diaspora Investment: - Improving the conditions for setting up a new business. E.g. India tax incentives for diaspora; - Recognizing that the diaspora is diverse and needs a wide array of products per their interests: home, investment, education, etc. (Key: data to get to know your diaspora). Data Data was identified as a key barrier to creating adequate and affordable financial services for migrants and their families. The group outlined some specific examples where access to data was problematic as well as a few of the reasons for why the provision of data was difficult. Data is a large problem in many countries and key in planning and strategy development; Peer-to-Peer Exchange Meeting on Remittances 5

6 The diaspora is not a homogenous population, hence different parameters need to be taken into account based on their education, economic situation; There is very little data sharing between agencies and government entities; Limited data exists on returnees as people do not declare relevant information; World Bank faces issues in collecting data from some central banks; Government does not always release accurate data to agencies and World Bank gathered data cannot go beyond those political sensitivities; Multi-lateral bodies, such as African Union, can also greatly help with establishing parameters for data; Data needs to be accurate. Government Role Finally, the group also discussed how governments can play a role in creating an enabling environment for migrant remittances and financial services. Some of the key points included: The role of government as a facilitator of the regulatory framework, enabling the environment to mitigate money laundering etc.; Creating a platform of trust, national migration and/or diaspora policy with a clear action plan; Collaborative mechanisms among government institutions, the private sector and national civil societies; Improving the roles of embassies and consulates in reaching out to diasporas. Session #2 Promoting Financial Inclusion & Literacy: From Policy to Diaspora Investment This session focussed on the various ways in which financial inclusion could be promoted. In this group discussion, there was a strong focus on sharing lessons learned from various countries within the ACP. It was also agreed that a three stage approach would need to be taken to financial inclusion, and this included: 1. Strategy formulation; 2. Strategy implementation; 3. Clear tools and indicators for measuring success. Peer-to-Peer Exchange Meeting on Remittances 6

7 With this in mind, two country examples were discussed in detail. ETHIOPIA Strategy formulation: The government set in place a National Diaspora Policy and Directive, with a clear definition of diaspora. Strategy implementation: Based on the National Diaspora Policy a number of actions were taken. These included: 1. Creating a profile of the diaspora and creating financial inclusion tools and mechanisms for the diaspora (e.g. Ethiopians abroad can open fixed deposit account, current accounts and saving deposits double interest rate for diaspora); 2. In 2006 exclusivity agreements relating to remittances were banned; 3. The creation of a foreign housing development scheme. Measuring success: This has yet to be completed but a clear strategy has meant the data is available to do so. CAPE VERDE Strategy formulation: There was strong political support for engaging with the Diaspora of Cape Verde. Strategy Implementation: 1. Establishment of strong link between the diaspora and the Government of Cape Verde; 2. Opening embassies and consulates to improve and promote cultural awareness; 3. Developing social security agreements with hosting countries; 4. Support to diaspora associations; 5. Establishment of special emigrant account; 6. Electoral rights for migrants and dual citizenship rights exemption of import taxes for certain products upon return; new government priorities: new diplomatic measures, online consulates, specific status for emigrant investors, integrating the diaspora into social policies. Other countries of interest: JAMAICA A high level of diaspora engagement practices and a strong focus from the Ministry of Finance on financial literacy. Including the creation of a financial literacy app for young people and credit union members. KENYA There have been new measures to target the diaspora: tax rebates for social impact on community projects, crowdfunding in USA, and micro finance initiatives. Peer-to-Peer Exchange Meeting on Remittances 7

8 Session #3 Data Management and New Technologies Developing Tools to Overcome Barriers and Borders The discussion of data management and new technologies covered a broad range of areas including: the value of big data, importance of databases and challenges relating to measurement of data so as to facilitate comparison. Some of the key themes discussed are outlined below. The use of consumer surveys to build a better understanding of the formal vs. informal marketplace. It was recognized that obtaining information on informal remittances was very difficult and that the main tool that could be used was household surveys in the country that the remittance was sent to. Previous World Bank surveys in Kenya, Uganda and Ethiopia are good examples of this; Boosting diaspora engagement to get more accurate data is seen as a key tool. This would reveal qualitative responses that would then help to design quantitative research in the country that remittances are sent to; Data maturity and questions on privacy and intellectual property need to be addressed at an early stage in order to build trust with senders and receivers; The power of social media in providing new types of data in very large volumes. With Big Data now a commonly understood concept it is clear that there is a mass of information that can be used at an aggregate level to predict behaviour, identify trends and help law enforcement. However, there has been limited work in this space as far as remittances are concerned; The potential disruption of social payments on the remittances market. Companies such as Wipay, facebook and others are rumoured to be interested in remittances. Should this happen, it may have a transformative effect on the remittances market; Consumer education at the sending and receiving side of a remittance is required to help introduce new technologies; The importance of data in the debunking and the derisking problem. This is a complex area that needs a co-ordinated response across many stakeholders, some of whom have completely differing objectives. For example, law enforcement has a different agenda to development agencies; The importance of data and information in creating proportionate regulatory environments. If better use of data can be made, it is anticipated that items such as transaction limits at which information is required on senders and receivers would only be introduced for certain categories of payments. For example, it may be that small transactions below USD200 would not require the same level of identification. Peer-to-Peer Exchange Meeting on Remittances 8

9 Final Recommendations Based on the discussions held over the course of the exchange, the lead Action expert alongside the main Action experts and participants, summarized the key recommendations they felt had been reached over the course of the exchange. The recommendations were summarized as: 1 Create an enabling regulatory framework for cross border payments 2 Improve domestic payments infrastructure and access, particularly in relation to new technologies 3 Improve data collection on remittances and payments system 4 Improve transparency 5 Assess the informal sector 6 Encourage informal into formal 7 Consider introducing incentives for lowering costs of remittances 8 Facilitate diaspora investment 9 Improve coordination among stakeholders 1. Create an enabling regulatory framework for cross border payments Exclusivity agreements to be banned where they still exist; Risk based approach: a standard code of conduct, or compliance standards should be developed and adopted in coordination with the industry to help address derisking; Identification requirements for KYC/AML purposes should be proportionate to the risks. Many remittances are of low value (less than USD200) and the risks associated with them are also considered to be low. 2. Improve domestic payments infrastructure and access, particularly in relation to new technologies Support infrastructure and access points such as post offices, retail and mobile services; Inclusive approach: remittances are one part of a complex financial ecosystem which includes other areas such as transaction accounts, savings and credit, credit history and so on. Therefore, considerations on remittances should be included in the design of domestic payment systems and found ways to integrate remittances into them; Many mobile based services operate on a closed loop basis whereby payments can only be made to another individual who is on the same network. This hinders growth. Therefore, initiatives to achieve interoperability between different product providers should be considered. For example, Tanzania has achieved full interoperability between its money transfer providers; Introduce proportionate regulatory frameworks for new technologies and antimoney laundering and know your customer requirements. As an example, it is known that the average transaction size for mobile payments is USD82 which is much less than traditional remittances. Therefore regulatory frameworks should take this into account; Financial awareness and literacy. Engagement with diaspora, access and usage for local accounts to the diaspora. Ex: Ethiopia, Cape Verde. 3. Improve data collection on remittances and payments system National macro-data. There is a shortage of accurate and comprehensive data on remittance flows at a national level. Some measures that could be employed to address this include: - Establish consistent methodologies across ACP countries for national level data AIR could play a role on this. Peer-to-Peer Exchange Meeting on Remittances 9

10 Mandate banks/mtos/mnos to supply standardized data as part of their granting systems; - Governments to share data across departments to address the problem of different parts of government not being aware of data that exists. For instance, law enforcement could share total data on remittance flows with development departments/agencies; - Share macro-data with all stakeholders. It is important for stakeholders such as new technology providers, to have accurate data at a national level in order to make investment and marketing decisions. Without accurate data, opportunities may be missed. Italy provides a good example of data that is collected at a national level; - Map access points so that a comprehensive picture is obtained on where funds can be collected or sent. Diaspora data. It is important for national governments, MTOs, banks and others to understand where their diaspora is. Tools that can be used include: - National census to determine more information on the size of the local population and changes since the previous census; - Utilize border data to capture where diaspora are moving to or arriving from. Togo is a good example of a country that does this; - Surveys are useful for gathering a range of information about migration patterns and on the diaspora; - Mapping where diaspora members is a really effective tool. A good example is Ethiopia. Other considerations: - Consider how to handle data privacy as this will become more important over time; - How to use big data is an issue that people are just beginning to consider. As yet there are no good examples of where this is being done successfully; - Data needs to be accurate. This is selfevident but currently there are only limited examples of where accurate data is held. 4. Improve transparency Tools include: - Price comparison portals such as SendMoneyPacific and Saver Asia; - Consider regulation, e.g. EU PSD, USA Dodd-Frank; - Consumer protection, complaints, etc.; - Financial literacy apps; - Communication/awareness generating tools, e.g. leaflets, community campaigns; - National level working groups on remittances and diaspora investment. 5. Assess the informal sector The informal sector is very large and in many cases it is very efficient; Capturing data on informal volumes is a big challenge across the ACP region. There is no uniform data or authoritative data on the informal remittance flows; Consider regulatory approaches to bring informal operators into the formal sector; Recommendations: - Develop standardized data collection across ACP region. Leverage supervisory powers where necessary; - Share best practice for measuring informal remittance flows, e.g. * Finscope which used a combination of surveying techniques and other forms of data. Use correct sampling technique as people might be resistant to answer direct questions and include gender-sensitive questions; * Togo example-survey conducted among diaspora, online through Ministry s webpage, and inquiries at borders. 6. Encourage informal into formal Outreach by diplomatic missions to their diaspora in the relevant countries is an important activity; Information should be provided with passports to educate migrants on the dangers of sending money informally; How to help undocumented/irregular migrants is a critical issue that is not easy Peer-to-Peer Exchange Meeting on Remittances 10

11 to address and requires some or all of the following: - Government level agreements/ amnesties; - Influence send countries to allow transfers to be sent based on ID not migration/visa status; - Provide standard documentation for irregular migrants, e.g. Matricula Consular, future Ethiopian yellow-card, etc. 7. Consider introducing incentives for lowering costs of remittances Can be used to change consumer behavior, e.g. PRI, Canada government. Although, to date, there are only a limited number of activities in this space; This should be considered where the normal market behaviour of the private sector may not lead to a desirable change in behavior. 8. Facilitate diaspora investment Boost roles of embassies and consulates in reaching out to their diasporas; Design tools to facilitate the diaspora s formal investment and discourage channelling resources into the informal sector, e.g. diaspora focused bank accounts; Within the diaspora it is important target private individuals. They have an important role to play in moving from policy to implementation; Development platforms which leverage the knowledge/talent of the diaspora (e.g. Cape Verde example which called on diaspora s medical expertise); Example: Togo implemented diaspora strategy in , which in part aimed to mobilize diaspora investment. To further facilitate diaspora investment, Government needs to better understand how remittances are used in order to propose alternatives to facilitate diaspora investment. Raise awareness of the added value of migrants activities in terms of investment, use concrete and measurable examples to demonstrate what works; Enhance collaboration and build connections, partnerships and knowledge sharing. A well-informed diaspora is able to benefit from the investment opportunities in their country of origin and add value to that country; Entrench and Retain. Take steps to mainstream and entrench diaspora needs in the national agenda. (ex Diaspora Day, Ethiopia); Policy coherence across government departments and between donors is important; Leverage the Peer2Peer Exchange Meeting; Create a database of best practices and experiences. Platform Development The purpose of the exchange was to create a space where experts and policy makers could speak freely, learn from each other s experiences to best leverage remittances and migration for development. Whilst the exchange offered an excellent initial step to fostering discussion, it was recognized by organizers that a permanent platform for engagement was required if the learnings gained and relationships made were to be sustainable. For this reason, the final session focused on the value of maintaining a network, with ACP EU Migration Action presenting on the Capacity4Dev.eu platform and the ACP-EU Dialogue_Remittances Group. The platform will provide an easy to use framework for sharing ideas and experience across stakeholders, building on the relationships and the goodwill generated from the 3-day exchange. Regular contributions will be encouraged from all members across the ACP regions. 9. Improve coordination among stakeholders Familiarization and trust building. What is the level of trust of diaspora in the local government?; Peer-to-Peer Exchange Meeting on Remittances 11

12 Conclusion Overall, the P2P Exchange Meeting enabled a rich exchange of views and information. Significant progress was made and invaluable links were built between participants. Many innovative ideas were developed. Next steps Whilst the P2P workshop was intended as a stand-alone activity there are two clear next steps that follow from it: 1. Input into the Thematic Report on Remittances and Good Practices. The outputs from the sessions will help to inform and validate the initial progress made on the report; 2. The establishment of an on-going platform for engagement between stakeholders and experts. This will continue to evolve over time. Leon Isaacs, Moderator, November International Organization for Migration (IOM) Peer-to-Peer Exchange Meeting on Remittances 12

13 Annex I Briefing document Remittances in the Global Context The role of International Organisations Remittances are low-value regular money transfers sent by migrants to their families back home. They are also predictable and have been shown to be a good counter-cyclical phenomenon. The World Bank estimated that $431 billion were sent as remittances to developing countries in Remittances are also private flows of funds sent from one individual to another. So, why are International Organisations so interested in them? Part of the reason is to do with their size, at over three times the level of Official Development Assistance (ODA). Another part is connected to the other benefits that they can bring, particularly in terms of reducing poverty and in aiding financial inclusion. They are an intrinsic part of other areas of interest to international organisations, such as migration and people smuggling. Panel members and delegates will discuss the reasons behind this. Is their main role in creating awareness and education about remittances, or are there more granular and pragmatic approaches that can be undertaken?. The presenters will provide concrete examples of the work that their organisations are doing, what results they have achieved and what priorities they see for the remittances market. They will also talk about how their work links with the globally agreed goals which have been committed to by political leaders through organisations like the UN, G20, ACP-EU and others. They will also develop ideas on how to share best practice and scale strong workable solutions. The outcome of this session will be a greater audience understanding of the role of International Organisations, a positioning of the key issues in migration and development as well as strong scene-setting of the topics for the remainder of the peer-to-peer meeting. This plenary session will enable International Organisations to position remittances in a global context and describe some of the key developmental areas around this phenomenon and how it links to other topics. It will address key themes both within the remittance market itself and also in the broader international development arena. Of particular interest will be the roles that the international organisations and governments are able to play. Whilst there is a lot of discussion about the importance of remittances, as well as some of the challenges involved with them, there are questions about what practical solutions are able to be adopted to create improvements and lower prices. Importantly, what can international organisations really do to help?. Peer-to-Peer Exchange Meeting on Remittances 13

14 Annex II Briefing document Remittances as Investment Engaging Migrants and the Formal Sector Historically, remittances have been primarily used for consumption purposes. The majority of funds sent by remitters to their families at home have been spent on food, clothing, housing and other essential every day expenditures. Studies, and efforts by development agencies, have focused on the potential for the diaspora to not only send money for consumption but also to make investments in their countries of origin. Indeed, in 2015, the World Bank estimated that diaspora members may have the potential to invest as much as USD497 billion in savings held in the host countries that could potentially be invested in their countries of origin. This is particularly relevant at a time when interest rates on savings in developed countries are at an all-time low and potentially larger returns could be made in other markets. However, very little is currently known about diaspora investment habits and there are few examples of successful initiatives to achieve scale and long-term success in attracting diaspora investments. In order to achieve diaspora investment a robust engagement plan must be implemented that brings diaspora as a willing and valued partner of government. This is a multi-faceted area that requires greater attention. The discussion will examine a range of topics that all need to be addressed in order to try to bring a cohesive approach to diaspora investment. Panel members are invited to reflect on the below topics: 1. Is there actually a link between remittances and investment?. Or is it a case of 2 plus 2 equals 5? 2. What examples are there of existing best practice in diaspora investment? 3. What examples of good diaspora outreach are there? 4. How is it possible to engage the diaspora in a productive and mutually beneficial way? 5. What is the role of governments in encouraging diaspora investment particularly where people have migrated for political reasons? 6. How can trust be developed in investments for the diaspora, particularly in markets where there is an absence of normal capital market infrastructure? 7. How to achieve a balance between the understandable needs of the diaspora for security and return whilst at the same time meeting the government s needs for investments in specific areas? 8. What is the decision making process that diaspora members go through in determining where to invest their savings? 9. What tools/investment vehicles are particularly promising for diaspora investment? 10. Are there opportunities to harness normal remittance flows for investment purposes? 11. Some countries have introduced diaspora bonds. How do they work? Are these effective, do they serve the purposes of all stakeholders? This discussion will identify the common areas that impact all countries looking to attract diaspora investment, attempt to understand the motivation of diaspora members and seek to find ways to harness the potential funds in a way that provides security and return for investors and brings much needed funds into their home country. On the breakout, participants attending this session will be invited to further explore this topic by doing a diaspora mapping exercise. Together, participants will be able to build a matric of diaspora investment possibilities reflecting the different ways migrants can be engaged. Peer-to-Peer Exchange Meeting on Remittances 14

15 Annex III Briefing document Addressing Obstacles in Remittances How to Reduce Costs? Remittances are private, low-value regular money transfers sent by migrants to their families back home. They are also predictable and have been shown to be a good countercyclical phenomenon. The World Bank estimated that UDS431 billion were sent as remittances to developing countries in Yet, despite the fact that remittances are over three times higher than the cumulative. Official Development Assistance (ODA) the cost of remittances remains high. The overall cost of remittances has been viewed as important by the international development community and many governments especially since 2009 when the G8 set a target at the L Aquila Summit that remittance prices should average 5 percent of face value by At the time, this represented a reduction of 50 per cent from the prevailing price of 10 per cent. Despite also being adopted by the G20 in 2011, the target was not reached in 2014 and therefore the G20 maintained 5 percent as an aspirational target but has not set a time target for it. The Sustainable Development Goals which were adopted in 2015 had as Goal 10.7c the target that by 2030 remittance prices would average 3 per cent and would not exceed 5 per cent in even the less competitive corridors. Since 2008, the World Bank has monitored the price of remittances through the site remittanceprices.worldbank.org(rpw) and has undertaken a number of initiatives based on the General Principles for International Remittance Service. 1 RPW now measures the average price of sending USD200 and USD500 across 365 corridors on a quarterly basis. However, the price of remittances still remains stubbornly high and stood at 7.60 per cent for Q which is down from around 10 per cent in The senders of remittances to developing markets are therefore spending in excess of USD32 billion to transfer their money and it is argued that if the price were reduced this would help more people out of poverty. Perhaps an equally important benefit of lower prices would be that more people would use formal channels to transfer their money which might in turn lead to greater financial inclusion and other benefits for the receivers of these payments. This session will focus on why remittance prices are still high and what can be done to reduce the cost. Participants will use their own experiences to shed light on initiatives that have worked to lower prices. Areas to consider include: 1. Remittances are, by their nature, complex as they involve multiple jurisdictions, multiple stakeholders and product providers and often conditions between different corridors vary dramatically; 2. What to consider of the role of the regulator, in terms of which types of businesses should be able to offer the services and what protections are required for consumers?; 3. How can one create effective competition, whether it is through the approach to exclusivity clauses, the type of service provider, etc.? What is the role for governments in this? 4. What is the role of price comparison websites? (such as Send Money Africa, ie.) 1 TANCE/Resources/New_Remittance_Report.pdf Peer-to-Peer Exchange Meeting on Remittances 15

16 5. How to handle factors such as grey of parallel exchange rate markets (which is a particular challenge in a number of developing markets); 6. Is there a role for incentives in the lowering of remittance costs?. Are there lessons that can be learned and applied from the Pakistan Remittances Initiative approach of subsidising certain remittance transactions?. What other incentives could be applied?; 7. What can technology do in helping to reduce remittance costs?; 8. Are there particular corridors / regions to be approached? And, if so, how should this be done?; 9. How can greater transparency be brought to the market and would it make a difference?; 10. How can a balance be achieved between the need robust AML/KYC procedures and the requirement to enable remittances to flow to challenged markets?; 11. How can one achieve a coherent and co-ordinated approach that will cover all of the areas that need to be addressed in order to reduce prices?; 12. What are the easy to implement actions? In addressing these and other points this session will result in practical solutions that can be developed and help to create a comprehensive framework or toolkit that can be accessed by all ACP members in helping to lower the cost of remittances that are being sent to their respective markets. Peer-to-Peer Exchange Meeting on Remittances 16

17 Annex IV Briefing document New Technologies Mobile Money Overcoming Borders The remittance value chain is quite complex and often includes three (or more) different service entities (sending agent, receiving agent and service provider). Remittances are currently still predominantly cash-based with an estimated 95 per cent of transactions being cash-to-cash. 1 Cash in itself is expensive and in many cases is used because there has historically not been any alternative. In recent years, new technologies have been brought to the remittances market and those that appear to be making the most difference to prices, efficiency and financial inclusion are online services and mobile services. A number of businesses are now offering online services at the sending end. This provides senders with the option to make their transaction at their own 1 Source DMA Market estimates. Western Union advise that 7 per cent of their transactions are made via digital channels, including mobile and online services. convenience on a web portal of a money transfer company without the need to visit a location. Payment can be made by a debit card, bank account transfer or sometimes by using a credit card. This initiative removes the sending agent (which can account for around 25 percent of the cost of a remittance) and thus plays a major role in reducing prices. Mobile banking, on the other hand, has predominantly grown in developing markets (particularly in Africa where nearly all the deployments have been made) and is currently being used as a paying out/disbursement method. Mobile also has the advantage of bringing more participants into the financial space by opening a virtual account. Both of these technological advancements have been shown to lower the cost of sending remittances and on average are priced at lower levels than cash-to-cash and account-to-account services. SERVICE TYPE AVERAGE % TOTAL COST BY SERVICE TYPE Bank account 12% Multiple 10% Cash to Account 9% Cash 8% On-line 6% Mobile Prepaid Card 1% 3% 0% 4% 8% 12% 16% AVERAGE % TOTAL COST Peer-to-Peer Exchange Meeting on Remittances 17

18 The recent Send Money Africa report (Q2 2016) shows that mobile services cost 3.29 per cent compared to online at 6.21 per cent, cash at 7.73 per cent and bank accounts at per cent. This session will specifically look at new technology and the roles that it can play in improving efficiencies and reducing prices. The experts will provide examples of good practices and talk about which of the multitude of new technology solutions, ranging from blockchain to websites show the most promise. Some questions that will be considered include: regional/continental basis? The outcomes of this session will be a greater common understanding of the potential benefits that mobile and other technologies can bring. It will also develop deeper knowledge on the roles for different stakeholders that are required to achieve the promise that technology can bring. In the breakout, delegates will be expected to, together, map the relevant stakeholders in an analytical exercise. 1. What conditions are required for mobile to be successful?; 2. What does a balanced regulatory approach look like?; 3. Can technology really replace cash?; 4. What sort of education is required for senders and receivers?; 5. Can other financial products and services be delivered via mobile?; 6. Who are the main stakeholders in the mobile money value chain?; 7. Do remittances have to be delivered by banks or MTOs (Money Transfer Operators) or can they be delivered by TELCOs (Telecom operators)?; 8. Why does mobile money seem to face challenges in gaining traction in many of the key developed country sending markets?; 9. What is the best way to ensure that the most appropriate technology solutions are available to those who need them?; 10. In the African context, what safeguards can governments put in place to protect consumers and what incentives could be used to increase the use of mobile payments?; 11. Is interoperability a necessity for successful mobile money services on a national/ Peer-to-Peer Exchange Meeting on Remittances 18

19 Annex V Program DAY ONE MORNING MONDAY, 17 October :45 09:00 PARTICIPANTS REGISTRATION 09:00 10:00 Welcome Address ACP-EU Migration Action Leon Isaacs, Expert Kenyan Ministry of Foreign Affairs Washington Oloo, Director of Diaspora & Consular Affairs Delegation of the European Union Ambassador Stefano-Antonio Dejak, Head of EU Delegation in Kenya International Organization for Migration (IOM) Jeffrey Labovitz, Regional Director IOM Regional Office Nairobi African Union Commission (AUC) Mustapha Kaloko, AU s Commissioner of Social Affairs 10:00 10:30 GROUP PHOTO & BREAK 10:30-11:30 Migration & Remittances: initiatives that matter ACP-EU Migration Action Leon Isaacs, Expert ACP-EU Migration Action Renza Tovazzi, IOM Program Officer African Institute for Remittances (AIR) Amadou Cisse, Executive Director Africa-Europe Diaspora Development Platform (ADEPT) Gibril Faal, Interim Executive Director 11:30 12:30 Remittances in the Global Context - Perspectives from International Organizations Leon Isaacs - ACP-EU Migration Action, Expert Note taker: George Bogiri IOM Claudia Natali, Regional Labour Mobility and Human Development Specialist World Bank Soheyla Mahmoudi, Senior Operations Officer and Task Team Leader African Union Commission Olawale Maiyegun, AU Director of Social Affairs IFAD Mauro Martini, Migration, Remittances and Development Officer 12:30 13:30 LUNCH DAY ONE AFTERNOON MONDAY, 17 October :30-15:30 Remittances as Investment Engaging Migrants and the Formal Sector Kenneth Coates ACP-EU Migration Action, Expert Note taker: Olivier Grosjean Table #1: Hailu Kinfe African Union, Remittances Expert Table #2: Paloma Monroy ACP-EU Migration Action, Expert Table #3: Demeke Atnafu Ethiopian Ministry of Foreign Affairs, Director of Diaspora Information & Research 15:30 16:00 BREAK 16:00 17:30 Addressing the Obstacles in Remittances Claudia Natali IOM, Regional Labour Mobility and Human Development Specialist Note taker: Jermaine Grant #1: What are the easy-to-implement actions? Philip Bob Jusu, African Union, Migration Officer #2: How can one create effective competition? What is the role for governments in this? Ralph Wharton, Caribbean Confederation of Credit Unions, Business Development Officer #3: How can greater transparency be brought to the market? And would it make a difference? Jonathan Capal, DMA Global, ltd, Director #4: What practical solutions can be developed to create a comprehensive framework ACP members Pedro Ferreira Marcelino, ACP-EU Migration Action, Expert Peer-to-Peer Exchange Meeting on Remittances 19

20 DAY TWO TUESDAY, 18 October :45 09:00 PARTICIPANTS REGISTRATION 09:00 10:30 New Technologies Mobile Money Overcoming Borders Daniela Villacres ACP-EU Migration Action, Expert Note taker: Mlungisi Kunene #1: What does a balanced regulatory approach look like? Abdishakur A Mohamud Central Bank of Somalia #2: How to ensure that the most appropriate technology solutions are available to those who need them? Nana Boakye-Adjei, DMA Global, Associate Director #3: What conditions are required for mobile to be successful? Barry Cooper & Catherine Denoon-Stevens, CENFRI 10:30 11:00 BREAK Breakout Sessions - Towards tangible recommendations on remittances 11:00-17:30 Breakout Session #1 Adequate and affordable financial Breakout Session #2 Promoting financial inclusion & Breakout Session #3 Data Management & New services to migrants & their literacy: from policy to diaspora Technologies - developing tools families investment to overcome barriers and borders Laura Porras Gibril Faal Barry Cooper The Inter-American Dialogue ADEPT CENFRI Note taker: Jermaine Grant Note taker: George Bogiri Note taker: Mlungisi Kunene ACP-EU Migration Action ACP-EU Migration Action ACP-EU Migration Action Focal Points: Focal Points: Focal Points: Mali, Guyana, Zimbabwe & Ghana Kenya, Sierra Leone, Ethiopia Somalia, Togo & OECS & Cabo Verde 19:00 OPEN COCKTAIL RECEPTION Peer-to-Peer Exchange Meeting on Remittances 20

21 DAY THREE TUESDAY, 19 October :30 10:30 Establishing an online community of practice on remittances ACP-EU Migration Action Adriana Detrell, IOM Regional Office Brussels 10:30 11:00 Peer to Peer Evaluation ACP-EU Migration Action Lucas Hackradt, IOM Regional Office Brussels 11:00 11:30 BREAK 11:30 12:30 Presentation of the P2P Report & Recommendations Leon Isaacs ACP-EU Migration Action, Expert Kenneth Coates ACP-EU Migration Action, Expert Paloma Monroy ACP-EU Migration Action, Expert Daniela Villacres ACP-EU Migration Action, Expert 12:30 13:00 Closing remarks Kenyan Ministry of Foreign Affairs Washington Oloo, Director of Diaspora & Consular Affairs Delegation of the European Union Ambassador Stefano-Antonio Dejak, Head of EU Delegation in Kenya ACP-EU Migration Action Olivier Grosjean, IOM Program Officer African Institute for Remittances (AIR) Amadou Cisse, Executive Director 13:00 14:00 LUNCH 14:00 16:00 Peer to Peer Networking time Peer-to-Peer Exchange Meeting on Remittances 21