According to both institutions, the database will help increase transparency about prices and stimulate greater competition among service providers.
Figures from the World Bank estimates that about 120 million people in Africa receive money from about 30 million relatives and friends who left their home country, for a total of $40 billion a year.
“The database, Send Money Africa, is a years-in-the-making partnership between the Bank, the African Union Commission, and donors. Through its interface, migrants can compare the cost that remittance service providers charge to send a particular amount to a given country,” both institutions said in a joint statement November 17, 2011.
At present, the statement said, Send Money Africa provides data on the cost of sending and receiving relatively small amounts of money (the equivalent of $200 and $500) from 15 major sending countries worldwide as well as in Africa to 27 African receiving countries.
By virtue of being countercyclical, remittances play a crucial role in poor households, said Ambassador Olawale Maiyegun, Director of Social Affairs of the African Union Commission. “For this reason, any reduction in the cost of the transfer would result in more money remaining in the pockets of the migrants and their families.”
Adding his comments, Richard Cambridge, Manager of the Africa Diaspora Programme in the World Bank’s Africa Region said “Send Money Africa will stimulate competition among the service providers and ultimately induce a reduction of the costs. As a result, remittance senders and recipients will benefit from transparent, efficient, less costly remittance services.”
By Ekow Quandzie