Analysing the use of fintech for cross-border remittance as a livelihood strategy - A case of Nigeria

Dudu-Eniola, Onaririnogho

Analysing the use of fintech for cross-border remittance as a livelihood strategy - A case of Nigeria

Thesis / Dissertation

2023

Abstract

Despite the dominance of traditional financial institutions in the cross-border money-transfer market, emerging financial technology solutions (FinTech) have transformed how individuals conduct cross-border payments to sustain their livelihoods in the global South. While much has been explored about FinTech adoption, the nexus between FinTech as a livelihood strategy and livelihood outcomes remains under explored. This study examined the use of FinTech for cross- border remittance as a livelihood strategy in Nigeria through the lens of the Sustainable Livelihoods (SLA) framework. The United Nations Sustainable Development Goal (SDG) 10c aspires to reduce the transaction costs of migrant remittances to less than 3%, considering the influence that remittances have on the growth of socioeconomic systems and high transfer costs. This study explores how this can be achieved using FinTech applications for cross-border remittance. The study involved 26 participants (N=26), which included both senders and receivers of cross-border remittances of Nigerian origin living within and outside the country. A qualitative analysis of data collected through semi-structured interviews shows that participants typically indicate receiving/sending remittances which were used to meet housing, clothing, feeding and healthcare needs. Additionally, participants state that the COVID-19 pandemic positively impacted the adoption of FinTech for remittance purposes. There were also challenges encountered in the use of FinTech application by participants who identified country restrictions from international remittance, differences in currency exchange rate, and lack of government policies as major challenges they faced. The outcomes of this study will aid in the development of more innovative FinTech technologies for easy cross-border remittances and remittance receivers' livelihoods. The study suggests that the government should put in place policies to ensure uniform currency exchange rates, and the stakeholders must ensure a more seamless user experience of FinTech applications for cross-border remittance. The findings of this research are invaluable in assisting FinTech startups to enhance their FinTech cross-border remittance performance. Because it is an exploratory study, it will greatly contribute to the literature on the topic and will aid FinTech companies in internalizing their strategies for financial inclusion in both the formal and informal sectors. The study suggests that the government should put in place policies to ensure uniform currency exchange rates, and the stakeholders must ensure a more seamless user experience of FinTech applications for cross-border remittance.

Keywords

Information Systems

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