The Rise Of Remittance

REMIT TO THE FUTURE

The importance of remits as a resilient source of foreign exchange signifies that it merits greater attention from policymakers, especially in circumstances that the MENA region is currently experiencing. So far, MENA countries have not made good use of remittances to finance productive investments.

Identifying specific development and investment projects for diaspora and migrants is a way of attracting remittances, and such a policy should be carefully designed and marketed. Equally, remittance-receiving countries should define specific rules on remittances.

According to Western Union there are two billion people worldwide who are considered under served and millions in the region, presenting an excellent resource pool for exchange companies to tap into.

“We plan to utilise our brand, global network and infrastructure to provide more financial services to the underserved,” says Farah.

The industry’s push to include more than just basic offerings is occurring as more companies in the region try to capitalise on a growing demand for financial services from migrant workers.

Moving forward, exchange houses stress the need for innovation through technology and improved customer service through better products and enhanced delivery.

Farah adds, “We understand that customer behaviour is changing, requiring more options across different technologies. This will be in the form of online, mobile, ATMs, stored value and distributing third- party services throughout our global network. Still, cash transactions will not disappear altogether. There will always be over-the-counter business.”

With the current socio-economic upheaval, flow of remittances will be mixed. Due to turmoil in conflict countries, like Syria, Libya and Sudan, migrants will probably perceive a greater need to send remittances to their families.

On the other hand, a feeling that transfers may not reach their beneficiaries could reduce the willingness of migrants to send remittances home, until the situation in their countries stabilises. Analysts predict that countries like Egypt, Tunisia, Jordan, Lebanon could be hit.

Despite all the uncertainty, Western Union anticipates that there will be 5-6 per cent growth in remittances in 2012, while the World Bank expects global remittances to rise to $515 billion by 2014.