CABO VERDE FAST FACTS KEY INSIGHTS DATA DEEP DIVE INDEXES PRICING OPERATORS CONCLUSION

FAST FACTS


VOLUME OF REMITTANCES
USD 224,1 million
World Bank, 2020
AVERAGE PRICE OF REMITTANCES TO SEND 200 USD
8.4%
RemitSCOPE Research, 2020
TOP 5 COUNTRIES

VOLUME OF REMITTANCES
USD 223,1 million

World Bank, 2020


AVERAGE PRICE OF REMITTANCES TO SEND 200 USD
8.4%

Remitscope Research, 2020


TOP 5 COUNTRIES


FINANCIAL INCLUSION
57% of adults have an account at a financial institution, incl. mobile money
National Statistics Institute and Bank of Cape Verde, 2015
NUMBER OF OPERATORS
sending to:
7
NOT COMPETITIVE MARKET

Remitscope Research, 2021
paying out:
7

Remitscope Research, 2021

FINANCIAL INCLUSION
<
57% of adults have an account at a financial institution, incl. mobile money

National Statistics Institute and Bank of Cape Verde, 2015


NUMBER OF OPERATORS
sending to: 7
NOT COMPETITIVE MARKET

Remitscope Research, 2021

paying out: 7

Remitscope Research, 2021


KEY INSIGHTS

ACCOUNTS AND DIGITAL PAYMENTS

High account ownership but low usage

According to the Bank of Cabo Verde, 79% of the population owns a bank account, including double counting. Despite the high level of account ownership, these accounts are often under-used and in 2015 only 40% of adults said they regularly use their accounts.


There is an opportunity to enhance the receipt of remittances into an account and foster the use of financial services by remittances recipients. The recently enacted Payment Institutions regulations will be pivotal to receiving remittances, while fostering financial inclusion and digital payments could be extended.

01

02
DOMESTIC PAYMENT INFRASTRUCTURE

Interoperability ensures card-based payments across the country

The retail domestic payment system is led by card-based payments which are interoperable amongst banks and usage is growing 10% per year among the population. The payment infrastructure ensures interoperability across 205 ATMs and more than 8000 POS. This complements the network of 119 retail agencies across the country covering 18 of the 22 municipalities - or 81.8% of the national territory. It also connects Cabo Verde to the global SWIFT network.


However, there is still limited traction to channel remittances through accounts, likely because many people own but do not use them.


03
LICENSING & REGULATORY ENVIRONMENT

Clear and comprehensive regulations but tiered KYC could help.

Cabo Verde’s regulatory environment for remittances is clear and opens opportunity for payment institutions and e-money issuers to enter the market in Cabo Verde.


AML/CFT regulation for remittances is clear and placed under the oversight of the Bank of Cabo Verde. It includes a comprehensive set of consumer protection provisions and new Payment Instrument regulations. A proportionate KYC framework for payment institutions and accounts could foster the use of regulated and non-cash channels. It would also help potential semi-formal payment agents to adhere to AML-CFT requirements.

DATA DEEP DIVE



LINK TO KEY REMITTANCE REGULATION

• The banking law defines financial institutions that are allowed to deliver payment services and means of payment. IMTOs are represented in Cabo Verde by duly licensed FIs Lei de Bases do Sistema Financeiro.pdf (bcv.cv)

• AML/CFT act (Lei n.o 120/VIII/2016) can be accessed here. Imprensa Nacional de Cabo Verde - quiosque digital (incv.cv)

Cabo Verde’s licensing and regulation laws are clear and comprehensive. A newly enacted regulation that provides greater allowances for payment institutions and non-bank agents can increase the use of mobile money and transaction accounts.

INDEXES





IMPORTANCE OF
REMITTANCES

01
score
1 Senegal 88
10 Kenya 62.5
11 Cabo Verde 61.5
12 Liberia 60
43 Botswana 13

DIGITAL
READINESS

02
score
1 Kenya 100
21 Botswana 76
22 Cabo Verde 76
23 Mali 74
41 Mauritania 12

OPENNESS
TO OPERATE

03
score
1 Kenya 100
25 Tanzania 51.5
26 Cabo Verde 43.5
27 Algeria 36
30 Zimbabwe 30.5



What do these numbers mean?



IMPORTANCE OF REMITTANCES


This is a composite score that reflects the size of formal remittance flows to the receive country, how important these are to the country's economy and, (at household level) the proportion that receive money from overseas (including informal). Weights are applied by experts. Scores out of 100.


DIGITAL READINESS


This is a composite score that reflects how ready a country is for international remittances to be terminated directly into digital accounts (including bank account and/or MM). The Index includes whether the regulation permits money to be received into mobile wallets, account ownership, and whether there is domestic MM interoperability. Weights are applied by experts. Scores out of 100.


OPENNESS TO OPERATE


A composite score that reflects where barriers to entry/operate are low for different types of market players. Factors include: lack of specific guidance for RSPs; existence of exclusivity practices; if there is a significant parallel FX market; the numbers of operators sending to a country and international remittance payment aggregators present. Weights are applied by experts. Scores out of 100.



For more information on how the indexes were calculated please download our methodology.


PRICING

CABO VERDE IS ONE OF THE MOST EXPENSIVE PLACES TO SEND TO GLOBALLY

The average cost of sending to Cabo Verde is 8.4% which is higher than the Africa average of 7.7%. Compared to the global average of 6.5%, Africa is already the most expensive region to send to and the cost of sending to Cabo Verde contributes to that.

AVERAGE COST TO SEND EQUIVALENT OF USD200 BY TOP CORRIDORS

Of the corridors surveyed, the US is the most expensive corridor to Cabo Verde with 9.5% of costs and the minimum cost at 4.5%, still above the SDG 10.c goal of 3%. Some operators in the EU, specifically, Portugal, France and Netherlands are able to offer costs well below the SDG goal with one operator offering 0.7% total cost from France to Cabo Verde.

AVERAGE COST BY METHOD TO SEND EQUIVALENT OF USD200 TO CABO VERDE

At 13.8% of the send amount, the cost of sending digitally in Cabo Verde is actually more expensive than cash-to-cash options which are on average 8.5% of the sending amount. The cheapest end-to-end option from Portugal to Cabo Verde costs 9.50% of the send amount.

LIST OF OPERATORS

Operators sending to Cabo Verde (7)

AZIMO
MONEYGRAM
RIA
SMALL WORLD
WALMART2WORLDY
WARI
WESTERN UNION
Operators Paying Out (7)

Banco Angolano de Investimentos
Banco Cabo-Verdiano de Negócios
Banco Comercial do Atlântico
Banco Internacional de Cabo Verde
Caixa Económica de Cabo Verde
Correios de Cabo Verde, SARL
Ecobank

FINAL THOUGHTS

RAPIDLY IMPROVING AND MATURING REMITTANCE MARKET

A sound regulatory framework yet competition remains limited due to various factors including market size and a limited number of IMTOs present which is further hindered by exclusivity agreements for some cases. De-risking and related CBR termination have affected certain banks and corridors, increasing the cost to send to an account. Current country access point coverage is good and can be enhanced should an uptake of non-bank agents be fostered by the new Payment Instrument regulations. Financial access and inclusion could be enhanced if use cases were appealing to remittance recipients and if KYC was more proportionate to the risk associated with payment account services.


Cabo Verde is one of the pilot countries chosen for PRIME Africa. As such, a full diagnostic report has been developed and presented to key stakeholders in the country. The diagnostic details all aspects of the remittance market, including key players, stakeholders, and recommendations.