Enabling International Remittance Services in Georgia

Archil Bakuradze is the chairman of the microfinance institution Crystal Fund. Here he discusses the “Reaching Georgia’s Rural Poor through Mobile Remittances” project, which is a joint effort of the Crystal Fund, Mobile Finance Eurasia and the microfinance organization Crystal and is funded by the Financial Facility for Remittances of the International Fund for Agriculture Development.

International remittances play an important role in the lives of people across the world, but in Georgia they are of major economic importance, accounting for 9% of the country’s GDP. According to various studies, about half of international remittances in Georgia go to rural areas.

Although it constitutes half of the country’s workforce, the rural population of Georgia generates only a small share of the country’s GDP and is poor and largely unbanked, despite the good overall progress of Georgia’s economy and the financial sector.. The aim of our project is to reduce the transaction costs of sending remittances to Georgia, especially to the country’s rural communities, thus enabling them to spend more money on productive activities.

Crystal Fund and our partners have developed an integrated approach to the financial needs of rural households. It is made up of three components working in parallel with each other: i) providing access to electronic payment infrastructure, including enhanced access to international remittances, ii) providing financial literacy, and iii) providing value-added financial services (micro-loans, micro-insurance and micro-savings).

A cornerstone of the project, led by the joint stock company Mobile Finance Eurasia (MFE), is the establishment of a mobile payment platform. MFE is aiming to establish an operator-independent, interoperable platform, which facilitates cross-border remittances as well as various in-country transactions, such as peer-to-peer transfers, airtime top-up, proximity and remote merchant payments, bill payments and transactions with financial institutions.

The mobile finance platform is intended to facilitate access to a fast, convenient and low-cost remittance service for Georgian migrants overseas and their families at home. While remittances sent via traditional formal and informal channels result is a single encashment, we envisage that mobile remittances will translate into a range of transactions, enabling users to establish a verifiable electronic transaction history, increasing the ability of users to leverage the flow of remittances to help them secure loans.

We hope that our project in Georgia will help us develop approaches and innovations that can be replicated in other countries in the Eurasia region, which still has a long way to go in adapting transformative technologies to provide people with better access to finance.

MFE is identifying a suitable technology solution which would cater to the requirements of a target group (if you are a potential technology provider, please contact MFE at info@mfeurasia.com).