Informal remittances are those sent through unlicenced or unregistered means. These flows have typically been cash-based; either in the form of cash physically carried across borders or sent with family and friends, cash given to bus or trusk drivers that are crossing borders, or through unlicenced money transfer providers, including those using the hawala system. Increasingly, informal transfers also take place using digital channels but through unlicenced and unregistered agents or brokers.
By their very nature, informal remittances are undocumented and unrecorded and as such the scale and true value of them is unknown. Across Africa different numbers estimated, with some analysts suggesting that informal remittances could account for as much as 50% of the total amount sent through formal channels. With potentially such large sums involved, remittance service providers, policy makers and regulators are always very keen to get a better handle on what is happening on the ground.
The main way to measure informal remittances is through a representative household survey which is able to estimate the sums sent through informal channels. However, even surveys are not always accurate and often underestimate flows as either people are unwilling to disclose use of informal channels or are unaware that the channel they are using is informal.