Asset Publisher


Rural Finance


Financing Scheme, Innovation (technical or institutional)



"Post office is a financial system that includes all who are excluded from the official financial system."

Parfait Agblonon, General Director, The Post of Benin


In remote areas of Africa, rural people have little access to the financial infrastructure necessary for receiving remittances. By linking remittances to a broad range of targeted financial services in rural post offices, African postal networks can play a key role in increasing rural financial inclusion.


Enhancement in rural finance inclusion

Post offices can reach rural towns and villages where bank branches are not present, offering remittances and other financial services to the un(der)banked.

Reduction in remittance costs

Post offices active in remittances make the market more competitive, increase transparency, reduce remittance costs and time taken to collect money.


The African Postal Financial Services Initiative can offer:

  • Cheaper remittance costs, benefitting migrant workers who send money back to families in their home countries; and
  • Great potential for replication for other African Postal Operators looking to expand their last-mile delivery of remittances


Countries involved

Benin, Ghana, Senegal, Madagascar

Project partners

IFAD's Financing Facility for Remittances (FFR), the United Nations Capital Development Fund (UNCDF), the Universal Postal Union (UPU), the World Bank, the World Savings and Retail Banking Institute (WSBI)

Project dates

2013 – 2017

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In remote areas of Africa, rural people have little access to the financial infrastructure necessary for receiving remittances. Because visiting the closest bank often requires a long and risky trip, many rural people rely on Africa’s 26,000 post offices for financial services. By linking remittances to a broad range of targeted financial services in rural post offices, African postal networks can play a key role in increasing rural financial inclusion. 


In many African countries, remittances need to be collected at bank branches in mostly urban centres. Although remittances are a lifeline for many rural people, the travel time required to retrieve them adds extra cost and risk to an already-expensive transaction. By supporting post offices’ ability to provide financial services, remittances can be sent more cheaply and accessed more widely.

Remittances are a key tool in reducing rural poverty. With an estimated 45 million African migrants living outside their native country, migrant remittances accounts for a significant proportion of all remittances received in Africa. Yet sub-Saharan remains the world’s most expensive region to send money home to, with corridors costing an average of 9.5 per cent.

Post offices are ideally placed to deliver cheaper remittances in rural areas. According to the Universal Postal Union, more than 80 per cent of sub-Saharan post offices are located outside the three major cities in each country. Post offices can also offer remittance services for as low as 5 per cent. However, post offices often lack the technology and expertise to process remittances safely and efficiently, and they do not meet the SDG 10 target of limiting remittance costs to 3 per cent. 


This initiative, co-financed by the European Union, was implemented by IFAD's Financing Facility for Remittances (FFR) ( in close collaboration with African National Postal Operators (NPOs). It aimed to promote, support and scale up key postal networks in Africa in integrating remittance services. Its four specific objectives were to:

  1. Reduce the cost of remittances to and within Africa
  2. Reduce transaction times
  3. Broaden the network of rural locations
  4. Deepen the range of financial services

Post offices, due to their accessibility and familiarity, are more approachable by un(der)banked rural people. They appeal to several segments of the population underserved by other channels, including the youth, the elderly and women in rural households.

Post offices have a distinct comparative advantage in the remittance market in Africa. Holding a vast network of branches that reaches remote towns and villages, they provide postal payments and other remittance services for rural people. Post offices that provide remittances boost market competition, increase transparency and reduce the costs and time necessary to collect money.

For this reason, post offices deserve a renewed investment that accounts for their comparative advantage. The strategy is to increase leveraging of existing postal networks to deliver migrant remittances in the last mile and expand the delivery of demand-driven financial services to the un(der)banked and rural communities. This can be achieved by intervening in the commercial management of the four NPOs in targeted countries, aiming to enhance capacity in business development, financial management and accountability.


In four pilot countries – Benin, Ghana, Madagascar, Senegal – APFSI helped advance postal reforms,  becoming a flagship initiative and an example for other African countries. Through APFSI:

  • the cost of sending money via post office was reduced by 42 per cent, with average costs falling below 4 per cent in the three West African countries and to nearly 5 per cent in Madagascar
  • remittances delivered via post office increased by 60 per cent, from US$383 million in 2014 to US$615 million in 2016
  • three months after 260 post offices were equipped with new technology, aggregated transaction volumes rose by nearly 15 per cent, and the flow of money increased by 400 per cent
  • National Postal Operators in the participating countries increased their aggregated market share in delivering remittances from 8.8 per cent to 13.37 per cent in a US$4.6 billion market.
  • the number of rural access points – of which 70 per cent are post offices – for formal financial services increased from 2.3 to 2.8 per 100,000 adults in the four countries
  • at least 100,000 previously unbanked adults opened accounts for financial services via post offices. 

Lessons Learned/Potential for replication

Based on APFSI’s results and an analysis of seven other countries, National Postal Operators (NPOs) have planned to modernize existing postal networks and broaden the range of financial services they offer.

For instance, NPOs must respond to a rapidly changing remittances market. Although more than 94 per cent of remittances in Africa are still received in cash, a fast-growing portion of remittances is received cashless. Remittances sent via cashless instruments (online, card, mobile) are expected to rise substantially in the medium term, as they can be offered at lower cost. In parallel, the number of rural recipients able to receive cashless remittances grows. The challenge for post offices is to help rural people open universal bank accounts.

In addition, in order to provide access to a broader range of financial services, NPOs will require extensive training and capacity-building, especially in marketing and financial management. 

Next Steps

The APFSI model is adaptable and applicable to other African postal operators looking to expand their last-mile delivery of remittances. In order to fully realize their potential, post offices need:

  • more recognition by financial regulators, policymakers and international financial institutions as an underutilised distribution channel of the financial access infrastructure
  • integrated reform of NPOs, incorporating demand-driven and economically viable operations for scaling up
  • innovation in delivering digital financial services through building partnerships with competent financial institutions and mobile telecom operators
  • development of financial and digital literacy for the un(der)banked for the  empowerment for financial inclusion. 

Last update: 22/01/2019