Abstract
In a global community, people often migrate from one area or country to another, searching for a better life. This migration benefits both the place of origin as well as the new area, town or country. The economic benefits takes place when migrants transfer or send money home through different remittance channels such as commercial banks and retail money-market by means of Electronic Fund Transfer (EFT), World Remit, and Mukuru. This study investigated the relationship between internal migrant remittances and financial inclusion among households in South Africa and whether remittance-receiving households differ from non-remittance receiving households in terms of their use of formal savings instruments and other financial products. Previous studies in this regards offer varying results across the globe and locally. This study is specifically limited to the South African financial service industry with the aim of investigating the relationship between financial inclusion and remittances among households in South Africa with the intention to develop strategies that harness remittances to enhance financial inclusion.
Secondary data was obtained from the World Bank Group (WBG) website using the 2017 Global Financial Inclusion (Global Findex) database questionnaire (interviews) that was conducted from 20 June 2017 to 05 July 2017. A quantitative research inquiry approach was followed incorporating the Chi-Square and Logistic Regression model analysis. The results found that there is a positive and significant relationship between internal migrant remittances and financial inclusion proxies (ownership of financial institution accounts and access to make deposits through financial institutions account). The study further established that 61% of households are financially included and 39% are financially excluded. Additionally, the results of the study confirmed a positive relationship between financial inclusion and the standard of living, emphasising the credibility of remittances as a means of diversification in the South African banking industry. Keywords
Financial inclusion, financial technologies, households, internal remittances, South Africa.