Wegagen, one of Ethiopia’s oldest banks, announced it is taking in impressive remittance earnings and expanding money transfer partners. This comes at a time when transferring money from Diaspora has seen challenges.
Simret Tesfay, Remittance Division Manager at Wegagen, said that remittance revenue is more sustainable now.
“Like other financial firms, illegal actions have hindered remittance earnings, however we have been able to maintain high performance,” she said at a press conference held at Hilton Hotel on May 15 in relation to the Bank’s signing ceremony with World Remit, an emerging global digital money transfer company.
Simret says the black market has affected legal money transfer. “To be winner and continue to increase our revenue we have developed innovative approaches like using digital money transfer services with partnering companies including World Remit,” the Remittance Division Manager added.
Abay Mehari, President of Wegagen, who signed the partnership agreement on behalf of the Bank with World Remit, said that using digital money transfer is easier and more preferable than traditional methods because it can improve accessibility.
“Expanding branches and accessibility is crucial, in my opinion improving exports is vital to smash the parallel market which is flourishing and in growing demand,” the president explained.
The service of World Remit introduced eight years ago has become popular since one can transfer money from anywhere to a receiver in different ways. The receiver can get the money by bank account transfer, cash pickup and mobile money.
The options of World Remit such as being able to transfer to an account or mobile can keep receivers from unnecessary expenses or encourage saving money, according to Fikru Woldetensie, Marketing and Corporate Communication Manager of Wegagen.
He said that his company’s presence in some growing regions is significant and reaches every corner including refugees’ centers like South Sudanese in Gambella Region with a money transfer from their facility.
The digital platform that the global remittance actor introduced has several differences from the traditional transferring approach, according to Sharon Kinyanjui, Head of East and Central Africa of World Remit.
“In the traditional approach the Diaspora would have to go the bank or money transfer agents to send the money to family or others at home but with our method they can send the money via mobile money from anywhere. Our service has reduced the cost of sending money,” Kinyanjui.
“Traditional transferring companies could charge from ten to 12 percent of the transfer amount but in our case it is up to 2 percent only,” she said.
Elfagid Aregahegne, Head of Business Development and Operations World Remit in Ethiopia, said that Ethiopia has secured about USD 5 billion per year from remittance, which is from 25 to 30 percent of total transfer to the country. One of the reasons people prefer to send their money through informal remittance is the high cost of sending which his company has reduced significantly, according to Elfagid.
We have been working strongly in places like the Middle East and the Gulf to encourage Ethiopian Diaspora there to save their money at the bank using different options.
World Remit, which has been operating for the last two years in the country, launched its first mobile money service in Ethiopia in 2018.
According to Simret, Wegagen is using 10 partners in international money transfer. The bank, which is one of the top six profitable banks, has 1.2 million account holders and 338 branches.