Policy makers and financial institutions advocate the use of formal (regulated) remittance channels as the best way to harness remittances. In this research I study the benefits of formal and informal remittance channels from a Zimbabwean migrant’s perspective. The factors, particularly the Zimbabwean migrant’s demographics, adopted country and channel variables will influence the migrant’s choice of remittance channel. Categorical and numerical data that influence the choice of remittance channel used was collected from Zimbabwean migrants resident in South Africa, the United Kingdom and the United States. Categorical date was analysed using a log linear model - correspondence analysis which explores relationships between two or more dimensions. Numerical data was analysed using correlation analysis to examine linear associations and relationships between variables. The research is intended to create an understanding of what influences the migrant’s choice of remittance channels which could assist the policy makers (particularly in Zimbabwe and South Africa) understand how to best harness both remittance channels and improve the financial structures if they hope to increase the migration of remittances from informal to formal remittance channels.Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

Zimbabwean migrants in South Africa often send financial support to their relatives in Zimbabwe. This financial support is known as remittances and is sent as cash or in-kind. This study investigated the characteristics of the South African-Zimbabwe remittance corridor. A critical investigation of the remittance channels used, the type of remittances sent, and the remittance transaction costs involved was done. Data for use in this study was collected through interviews with remittance service providers and by actual remittance transfers to Zimbabwe. A qualitative and quantitative analysis of data using statistical analysis techniques was done. From the analyzed data, it was observed that remittance service providers fall into two channels: formal and informal. The informal remittance channels were found to be the most popular in this corridor. The popularity of informal channels can be attributed to lower transaction costs and a lack of documentation needed from the sender. Informal remittance channels do not require the remittance sender to provide any identification document, therefore, undocumented Zimbabwean migrants opt for them. Long-distance buses that serve the South Africa-Zimbabwe route were found to be a popular channel of sending remittances - both cash and in-kind - to Zimbabwe. In-kind remittances have gained popularity due to the perennial lack of household consumer goods in Zimbabwe. Due to the national lockdown imposed in South Africa as a response to the Covid19 global pandemic, the study was unable to find the volume of remittances that is sent through the informal longdistance buses and trucks. The lockdown resulted in the closure of borders and non-essential travel was not permitted. The study found that the remittance transaction cost in the South AfricaZimbabwe corridor was higher than the global average cost of 6.84% (for formal channels) and the United Nations Sustainable Development Goal of 3% by the year 2030.