FREETOWN , November 19, 2008 -- When one talks about remittances in today’s context, it is mostly about how affluent diasporans abroad send money home through established banks or bureaus. But even within a country, remittances do take place, mostly from the “better-offs” in the cities to their poorer relatives in remote indigent villages. Such is the case in the small West African country of Sierra Leone, which has consistently been ranked near the bottom of the world’s list of human development performers over the last two decades.
Because many of those on the receiving end live in villages which are secluded and often difficult to reach by roads, transferring money to them becomes a challenge. Entrusting travelers with such sums is often risky and carries no guarantee that the money will ever reach the intended. The lack of formal money transfer facilities to such villages has forced certain Sierra Leoneans living in the cities to come up with an ingenious way to send money in the absence of formal intermediaries like banks or bureaus.
Joshua Sondai, who currently resides in Freetown, Sierra Leone’s capital city, hails from Bonthe, an impoverished and desolate island disconnected from the rest of Sierra Leone by the Atlantic Ocean. Bonthe is cut-off from the rest of Sierra Leone in terms of road access, which greatly hinders the flow of goods and services. Its situation thus poses a special challenge for remittance and other forms of development assistance.
Joshua earns a living through employment as an occasional sales representative at a business in Freetown. Whenever he is able to earn more, he remits at least the local currency equivalent of US$20 back home as subsistence allowance to his ageing mother, and to keep his sister’s son in school. The average pay in Sierra Leone for unskilled workers is US$60 a month.
So how does he transfer this money, given that Bonthe is so difficult to reach and there are few trust-worthy travelers who can safely carry and deliver the money to his mother?
“ All I do is to purchase US$20 worth of Zain cell phone (formerly Celtel) scratch cards,” Joshua explained. “I then use my cell phone bearing the Zain SIM card or chip to call one of the pay phone operators back home in Bonthe. I tell the operator that I’m sending US$20 worth of top-up card units into the operator’s phone along with two extra dollars worth of units as the agreed 10 percent remittance charge.”
According to Joshua, the operator receives the units and disburses in cash the local currency equivalent of US$20 (i.e. Le 60,000) to his mother.
“After the transaction, my mother uses the operator’s phone to call me and confirm receipt of the money. It is as simple as that, ” said Joshua.
In the absence of formal banks and bureaus, the cell phone operators in Bonthe have now assumed the role of money transferors .
There are about 100 Zain pay-phone operators in Bonthe District, who are involved in the money remittance business. They reportedly transfer an average of US$ 5,000 a month to the local district residents. This innovative mode of money transfer has been going on for four years, since the civil war ended in 2004, but is a rare practice elsewhere in Sierra Leone.
While it is likely that some urban dwellers use this method to send money to families in remote rural areas, there are currently no formal estimates as to how much money changes hands this way.
Since it is not likely that commercial banks such as the Rokel Bank and even community banks will establish a branch in a remote village such as Bonthe in the near future, pay-phone operators will probably continue filling the gap as a remittance facility for the time being.
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