Vietnamese remittances set to reach $7.3b

Overseas remittances have surged strongly this year and were expected to reach US$7.3 billion by year's end, an increase of over 14 per cent over 2009, said State Bank of Viet Nam Governor Nguyen Van Giau.

The growth in this figure was considerable in comparison to other measures of foreign capital inflows, e.g., foreign direct investment or official development assistance, and had been increasing steadily in the past two weeks, Giau said, suggested that the increased inflows would help stabilize the foreign currency supplies and reserves, as well as the balance of payments.

With foreign reserves currently thin and the demand for dollars expected to undergo a seasonal increase before the Lunar New Year holidays, the State Bank of Viet Nam has already needed to intervene in the foreign exchange market by pouring additional dollars into the commercial banking system.

The World Bank recently released a report on remittances worldwide in 2010, with Viet Nam ranking 16th among the top 30 countries surveyed.

Remittance fees to Pacific countries higher than global averages says report

A recent report says the average cost of remitting to the Pacific is significantly higher than global averages.

"Fiji Live" reports that according to the report called "Trends in Remittance Fees and Charges" prepared by Australia and New Zealand, this is a challenge to the Pacific’s primary remittances policy.

It says the average cost of sending remittances to Pacific Island Countries is 21.7 percent of the amount remitted when sent from Australia, and 15.2 per cent when sent from New Zealand.

It says it is estimated that remitters to the Pacific pay at least 90 million US dollars in remittance fees each year.

The report, which was presented at the recent Forum Economic Ministers meeting in Niue, noted that around 470 million US dollars was formally remitted to Forum island countries in 2008.

Following discussions about the report, the Forum Economic Ministers Meeting in Niue agreed "to explore and prioritise support for domestic initiatives in both sending and receiving countries to promote lower remittance costs."

Western Union remittances now officially available via Zoompass

Western Union and EnStream have announced that the Western Union’s international money transfer service is available through the Zoompass Mobile Wallet Application.

Earlier, in September the two companies announced their strategic alliance to enable 23 million Canadian mobile subscribers to send Western Union Money Transfer transactions from their mobile phones to over 200 countries and territories worldwide, through the Zoompass Wallet.

"The EnStream and Western Union teams have collaborated over the past six months to bring this revolutionary mobile remittance service to market"

EnStream is a mobile-commerce joint venture company owned by Bell Canada, Rogers Communications and TELUS Corp.

Once a Western Union Money Transfer transaction has been initiated through Zoompass, the recipient can pick up the funds in cash at a participating Western Union Agent location. Subscribers of mobile operators with whom Western Union has launched the Mobile Money Transfer service can also have funds delivered directly to their phones' Mobile Wallet accounts.

This service is currently available on networks in 27 countries, including Smart Communications and Globe Telecom in the Philippines, M-PESA in Kenya and Safaricom in the UK.

Remittances – Nigeria tops the Africa list for remittance receipts

Nigeria is ranked first among the top 10 remittance recipients in 2010 in sub Saharan Africa, according to the World Bank’s latest Migration and Remittances Factbook 2011 released this past week.

Nigeria received $10 billion from remittances, followed a distant second by Sudan, with $3.2 billion; Kenya, $1.8 billion; Senegal, $1.2 billion; and South Africa, $1 billion.

The report also listed Nigeria among the top 10 emigration countries in the region alongside Burkina Faso, Zimbabwe, Mozambique, Côte d’Ivoire, Mali, Sudan, Eritrea, the Democratic Republic of Congo, and South Africa.

The report described remittances to developing countries as a resilient source of external financing during the recent global financial crisis, with recorded flows expected to reach $325 billion by the end of this year, up from $307 billion in 2009. The report added that worldwide, remittance flows are expected to reach $440 billion by the end of this year.

The true size of remittances, including unrecorded flows through formal and informal channels, is believed to be larger.

Remittances to India are expected to reach $55 billion in 2010

Indian expatriates are expected to remit about $55 billion into the country this year as the number of emigrants from the nation is likely to reach 11.4 million, a new World Bank report saya. India is likely to stay as the top receiver of remittances in 2010, as inflows of $51 billion to China keeps it a place down, with Mexico in the third spot, is expecting $22.6 billion from its expatriates.

The World Bank in its 'Migration and Remittances Factbook 2011' report says that worldwide inflows are expected to reach $440 billion by the year end, with remittances to developing nations are likely to reach a record $325 billion from the 2009 figure of $307 billion.

The top remitting countries in 2009 were United States ($48.3 billion), Saudi Arabia ($26 billion), and Switzerland ($19.6 billion).

Remittances remained a resilient of external financing during the recent global financial crisis and were steady despite the pangs of financial reconstruction in the developed world, the report said.

As high-income countries remain the main source of remittance flows, migration to the developed economies grouping saw an increase.

India ranks second in the top three emigration countries with 11.4 million of its population chose overseas destinations. Mexico tops the chart with 11.9 million figure and Russia getting third position having 11.1 million people working in other countries.

India-UAE is among the top 10 migration corridors with 2.2 million migrants. Mexico-US is expected to be the largest migration corridor in the world, followed by Russia-Ukraine, Ukraine-Russia and Bangladesh-India.

World Bank said majority of expatriates in the Gulf hail from India, Pakistan, Sri Lanka, Egypt, Philippines, Bangladesh, Yemen, Iran and Sudan.

According to the Factbook 2011, the top migrant destination country remains the United States that kept 42.8 million immigrants, followed by Russia (12.3 million), Germany (10.8 million, Saudi Arabia (7.3 million), Canada (7.2 million), United Kingdom (7.0 million), Spain (6.9 million), France (6.7 million), Australia (5.5 million), India (5.4 million), Ukraine (5.3 million), Italy (4.5 million) and Pakistan (4.2 million).

The top immigration countries relative to population are Qatar - 87 per cent, Monaco - 72 per cent, UAE - 70 per cent, Kuwait - 69 per cent and Andorra - 64 per cent.

TRAINING COURSE “REMITTANCES – CREATING VALUE”

Athens, Greece – 14 & 15 February 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2009 the total value worldwide was over US$ 316 billion equivalent, involving some 190 million migrants.

For some recipient countries, remittances can be as high as a third of GDP. Remittances also now account for about a third of total global external finance. Additionally the flow of remittances seems to be significantly more stable than that of other forms of external finance. This is borne out by evidence from the recent financial crisis. Because of measurement uncertainties, particularly about unrecorded or informal remittances, the actual flows may be much higher – estimated by experts at 50% or more.

Informal channels are the greatest competition to formal financial sector in the Remittance space. Understanding what these are and how they operate is key to understanding their success. And their success factors are themselves critical to permitting banks to successfully compete for this important market sector.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

We examine how the public and private sectors can collaborate to encourage the providers of remittance services to switch from informal to formal channels and how they can make the formal sector more efficient and competitive.

The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers 
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers
• Money Transfer Operators 
• Government agencies involved in migrant workers 

 Development Agencies

For a fully descriptive brochure please send a blank e-mail to courses@citadeladvantage.com with REM-ATHENS in the Subject line.

TRAINING COURSE “REMITTANCES – CREATING VALUE”

Johannesburg, South Africa – 14 & 15 February 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2009 the total value worldwide was over US$ 316 billion equivalent, involving some 190 million migrants.

For some recipient countries, remittances can be as high as a third of GDP. Remittances also now account for about a third of total global external finance. Additionally the flow of remittances seems to be significantly more stable than that of other forms of external finance. This is borne out by evidence from the recent financial crisis. Because of measurement uncertainties, particularly about unrecorded or informal remittances, the actual flows may be much higher – estimated by experts at 50% or more.

Informal channels are the greatest competition to formal financial sector in the Remittance space. Understanding what these are and how they operate is key to understanding their success. And their success factors are themselves critical to permitting banks to successfully compete for this important market sector.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

We examine how the public and private sectors can collaborate to encourage the providers of remittance services to switch from informal to formal channels and how they can make the formal sector more efficient and competitive.

The course has been specifically designed for Senior Bankers involved with

• Payment Systems and Money Transfers
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers 
• Money Transfer Operators 
• Government agencies involved in migrant workers 
• Development Agencies

For a fully descriptive brochure please send a blank e-mail to courses@citadeladvantage.com with REM-JHB in the Subject line.

“What migration, remittances are doing to our societies”

Former Jamaican Prime Minister P J Patterson suggests that remittances fuel wasteful consumption and discourage able-bodied family members from seeking employment. But these negatives pale in comparison to the actual needs and the positive spin-offs which they trigger, he says.

Patterson, who is also chairman of the Ramphal Commission on Migration and Development, was delivering the Walter Rodney Memorial Lecture last week on "Migration and Development in the Commonwealth: A Caribbean Perspective" at the University of Warwick Ramphal Building in Coventry, United Kingdom. Following is an excerpt from the lecture:

“A striking feature of international migration is the increasing mobility of women. This is partly due to the rise in demand for household and care workers and, thereby, the increasing participation of women in all migration streams.

Forty-nine per cent within the Commonwealth are women, some of whom are obliged to leave their children behind in the desperate search for an income to sufficiently maintain them. For us in the Caribbean, we have already begun to observe some of the consequences — particularly on the nurturing of children and the social fabric. We cannot condone any attempt to exploit those who are engaged in the provision of household services and domestic care.

From the days of imperial conquest, those who settled abroad were sending remittances and profits back home to the Motherland. So the remittance phenomenon is by no means novel. Cross-border financial flows had topped US$414 billion by the start of the new millennium.

Remittances received by developing Commonwealth countries amounted to US$73 billion in 2007, accounting for 3.2 per cent of GDP (Gross Domestic Product). For the least developed, 6.2 per cent of GDP was attributable to remittances.

The figures for the Caribbean are even higher — averaging seven per cent and in some cases as high as 19 per cent of GDP in Jamaica and 20 per cent for Guyana. In several Caribbean countries, these figures exceed the value of Foreign Direct Investment and vastly more than comes from Official Development Assistance.

We are well aware of possible negatives which remittances may have — fuelling wasteful consumption, discouraging able-bodied family members from seeking employment. But these pale in comparison to the actual needs and the positive spin-offs which they trigger.

There is mounting evidence that more and more of these resources are being channeled into housing, small business development and pension schemes.

Our Commission will consider how the transaction costs of remittance flows may be reduced and how these significant financial flows may best be protected in a volatile and somewhat turbulent foreign currency exchange market.

We need to create an investment climate which will attract more of these resources into economic activity.

In all four developed Commonwealth countries, the percentage of those with tertiary education is markedly higher among immigrants than among the native-born. The difference is largest in the UK, where the proportion of tertiary-educated among the foreign-born was 35 per cent, nearly double that of the native-born (20 per cent).

The emigration rates of the highly skilled in Commonwealth countries differ widely. Countries with small populations, especially island states, experience high emigration rates of their highly skilled population. In the case of Barbados, Gambia, Guyana, Jamaica, Mauritius and Trinidad and Tobago, the percentage of the highly educated population living abroad varies from 40 per cent to over 70 per cent. The small island states are the ones that are most directly affected by the emigration of highly skilled workers, the so-called 'brain drain'.

The Caribbean has some of the highest rates of migration of its tertiary-educated labour force. These rates run as high as 70 per cent. Between 1990 and 2000, some 60 per cent of Caricom (Caribbean Community) nationals, who benefited from higher education provided by Member States, moved to OECD (Organisation for Economic Development) countries. This figure could increase with the shortage of particular skills in the EU (European Union) for medical personnel, scientists, teachers and information technologists.

WHO data reflect that the highest emigration rates for doctors now working in the OECD are to be found in small island developing states and Africa. Of the 10 countries with migration rates of over 50 per cent, eight were small states and six of these were from the Caribbean. The rate reached 89 per cent for Antigua and Barbuda and was over 70 per cent in Grenada and Guyana.

Overall, the expatriation rates for nurses were even higher than those for doctors. Among the 10 Commonwealth countries with the highest expatriation rates, the percentages residing in the OECD countries ranged from 66 per cent to 88 per cent. Of the 20 countries with rates over 50 per cent, 19 were small island developing states.

Eight of the 10 with the highest expatriation rates were from the Caribbean with Jamaica, Grenada, Belize, St Vincent and the Grenadines and Guyana exceeding 80 per cent.”

World Bank calls for the creation more formal remittance flow channels to cut losses

Financial experts and economists at the World Bank (WB) have called for the creation of additional formal remittance flow channels to reduce the Ethiopian government’s loss of income due to foreign exchange being transferred into the country through informal channels.

Although a lot of the remittances sent to Ethiopia flows through innformal channels, the amount received by 14% of adults accounted for eight per cent of the gross domestic product (GDP), at current market prices, in 2008/09.

The amount received by this 14%, comprising people who are aged between 18 years and 65 years, amounted to 3.2 billion dollars a year, according to a survey which was conducted for the first time in Ethiopia by the WB. On average, each person received 600 dollars annually, which was sent to them five times a year.

There are around 37 million adults in Ethiopia, according to the 2007 census.

Remittance flows represent a significant share of the national income and foreign currency earnings for Ethiopia, said Benjamin Musuku, WB Africa Region Payment System specialist, speaking recently at the “Future of African Remittance Program” initiative that was held in Addis Ababa.

Globally, international remittances totaled 414 billion dollars in 2009, of which 316 billion dollars went to developing countries, involving around 192 million migrants or three per cent of the world population, according to a recent WB estimate.

Despite significant amounts of remittance flowing through formal channels, a great deal of money makes its way into Ethiopia through informal channels, according to the survey.

In order to touch this money, policy makers and remittance service providers should play an active and supportive role to increase the development impact of remittance by facilitating formal remittance flows, thereby reducing the cost of remittance transfers, according to Donald F. Terry, financial expert at the WB.

The cost of sending and receiving remittance in Ethiopia is higher than the rest of the world, which is around 10% of the transfer amount, a study conducted by Western Union has revealed.

To lower the high transaction costs, the WB has launched the “Future African Remittance (FAR)” program, which intends to enhance competition and financial innovation in the Ethiopian remittance market.

Under the FAR programme, the WB is expanding its efforts in Ethiopia to assist the government and remittance service providers to realize the development impact of remittances. The program will act as a collaborative platform for enhancing and focusing complementary efforts on the issue of remittances.

The FAR program will also facilitate the exchange of best practices among participating countries by creating a forum for technical discussion and examination of innovative technologies, regulatory developments, and improved data collection on remittance.

The program sets a goal to reduce the cost of sending and receiving by five per cent and increase remittance through formal channels by 20% in 2015.

Commercial Bank of Ethiopia (CBE), state owned and the biggest bank, plans to increase the remittance that is sent through it by 40% this year. To this end, it had stopped charging commission on Western Union transfers that are sent through its branches.

The result of the national survey and FAR programme was made public in the joint conference held by the WB and National Bank of Ethiopia (NBE) on October 27.

The conference, held in Addis Ababa, following a similar initiative in Kenya, intended to disseminate the survey results and launch country specific initiatives to improve competition and foster technological innovation, according to Benjamin.

“The program started in May 2010 with engagement in Ethiopia, Kenya, and Uganda and plans to expand to an additional five Sub-Saharan African countries in 2011,” he said.

The conference brought together nearly 50 participants comprising policy and decision makers from Ministry of Finance and Economic Development (MoFED), NBE, commercial banks, and non-bank financial institutions.

UAE becomes key mobile remittances gateway

The mobile money service market is growing at "a phenomenal pace" globally, and the UAE is emerging as a key mobile remittances gateway in the GCC region.

The region has a huge potential for growth as the governments and regulators are keen to promote transparent and secure money transfers by migrant workers, according to Luup, a provider of mobile money transfer solutions.

With an exceptionally large migrant population, the size of the remittance market in the GCC alone is nearly $50 billion, of which a sizeable portion is still going out of the region through the traditional corridor of hawala, said Morten Hofstad, Regional Director Middle East, Northern Africa and Asia, Luup. If regulators and government in the region follow the initiatives taken by the UAE authorities in discouraging hawala and to bring more accountability and transparency in remittances, 99 per cent of remittances by salaried migrants would be through mobile money transfer system, he said.

Apart from ensuring accountability and transparency in transaction, mobile money transfer solutions will be both cost effective and time-saving for migrant workers who can complete the transaction within seconds with just one command on their mobile phones, he said.

Luup has already singed up with Emirates International Exchange and other two exchange houses to provide this solution.

A report by analysts Gartner states that mobile money transactions will total $4.5 billion by 2012 globally. The estimated annual growth of remittances in the GCC region alone is pegged at over 20 percent in the next five years, said Hofstad,

The region also has one of the highest mobile phone penetration rates in the world, as mobile phones are a key tool for these mostly unbanked migrants. "Based on the region's potential, the Mobile Money Transfer, or MMT, conference is a great opportunity to share experiences and ideas that can pave the way for mobile money transfer initiatives globally," said Hofstad.

At the MMT Global Conference in Dubai on Tuesday, Luup highlighted how it is establishing the UAE as a key mobile remittances gateway by partnering with companies’ across
 the region.

In a speech given together with the National Bank of Abu Dhabi, Luup shared the successful case study of the first launch of international money transfer using MoneyGram via mobile phones in the Middle East. Luup also pointed to its strategy of expanding the ecosystem further by building partnerships with countries receiving remittances from the GCC region.

Remittances become Kenya’s top forex earner

The inflow of funds from Kenyans abroad grew significantly in the past 12 months to become the country’s top earner of foreign exchange helped by a renewal of interest in the real estate sector, increasing popularity of university education and growing importance of entrepreneurship as a key source of employment in the country.

A new study by the World Bank and the Central Bank of Kenya (CBK) indicates that Kenya received a total of Sh152 billion or $1.9 billion in the past 12 months – beating proceeds from traditional forex earners such as tourism (Sh100 billion), tea (Sh70 billion and horticulture’s Sh71 billion.

This volume of inflow translates to an average of Sh58,800 for each of the 2.61 million Kenyans who received money from abroad during the period and the number of recipients is equivalent to 14 per cent of the country’s adult population.

The study is the first of its kind between the two institutions and the first also to include transfers that are not received through the formal financial system, suggests that the inflow of remittances is three times more than previously thought.

The Central Bank estimate of annual remittances excluding informal channels was $609 million (Sh49 billion) last year, a marginal drop from $611 million in 2008.

This year’s receipts were expected to surpass last year’s owing to the economic recovery of the US economy and stabilization of the weak European economy -- the major source of the remittance - which has suffered massive job losses in 2009 following the global economic meltdown that started the third quarter of 2008.

Kenya, like many African countries that receive high volumes of remittances, has been found to be lacking in policies that could help channel the inflows to sectors that strengthen their role in enhancing economic growth – leaving much of it to go into consumption.

The joint survey established that half of the total amount received goes to meeting recipients’ daily expenses such as food, housing and medicare, with the other half going to key economic and social functions including start-up capital for small businesses (35 per cent), paying for university education (33 per cent) and buying or building houses (8 per cent).

Only a tiny four per cent of the remittance receipts are kept as savings.

Unlike the trend in other parts of the world, the World Bank study found that it is Kenya’s emerging middle-class is the main recipient of the remittances.

“This is unique because these are not people looking for money to make ends meet. In other parts of the world it is the needy, who get such remittances,” said Sergio Bendixen, an advisor with the World Bank.

Utilization of the remittances in growth projects such as housing and business start-ups is being taken as signaling the potential that exists to deploy the funds in enhancement of economic growth.

Mr Michael Fuchs, an advisor to the World Bank’s Africa region on finance and private sector development, said that in many African countries, remittances have moved beyond ordinary support to the subsistence needs of recipients to driving actual GDP growth.

“Governments must develop legal and regulatory frameworks that will help providers of remittances move beyond simple hand-outs. They need to design and deploy innovative and functional financial products and services that facilitate savings, loans, mortgages and insurance,” he said.

While a large fraction of the flows are made up of private transfers to family members and friends, the World Bank says policy makers and service providers could play an active and supportive role in leveraging its development impact by facilitating formal flows and reducing the cost of transactions, the World Bank said.

Kenya’s Finance and Foreign Affairs ministries have responded to the emerging trends with a raft of new regulations on remittances that offer preferential treatment to flows earmarked for investment.

The critical role that remittances have come to play in the Kenyan economy is further indicated in the attention it has received from the National Economic and Social Council (NESC), a key public policy organ.

Mr Bendixen said a revolution in information and communication technology (ICT) has helped drive the flow of remittances into Kenya citing cheaper call and internet charges that have offer easy linkages between remitters and recipients.

The US, England, the United Arab Emirates, Uganda and Tanzania are Kenya’s main sources of remittances with commercial banks, money transfer firms and mobile phone platforms such M-PEAS and Zap as the main channels used to transfer the funds.

The US and England’s leadership of the list of remittances source markets has however caused concern that ongoing economic turbulence in Europe and North America could culminate to a fresh dip in the volume of remittances in the medium term.

The World Bank has however allayed the fears terming the “situation would temporary” citing the recent resurgence in economies such as China, Germany, and India as well as demand for work force in the most developed countries where births have remained low.

“People will continue to move North and money will continue to move South,” said Mr Bendixen.

Remittances to sub-Saharan Africa are currently estimated to exceed $21 billion and are expected to grow by almost two per cent this year despite a weak global economy.

To increase formal flows and deepen their financial markets, the World Bank is asking African government to encourage competition and technological innovation that will help reduce costs and increase access to financial services among local recipients.

Benjamin Musuku, an official with the World Bank’s Finance and Private Sector department, said lack of connectivity to financial systems has hampered the growth of remittances in Africa and urged for improved access to such facilities.

The survey however recorded relative advancement in Kenya where more than four-fifths of recipients received their money through a bank or money transfer firm.

“Despite significant progress in the reporting of remittances throughout the world, most official statistics in sub-Saharan Africa still under estimate the true size of the flows. This is in part due to a focus of data collection efforts on formal channels such as banks,” the bank said.

Rwandan remittances up by 16% in 2010

Rwanda expects its citizens abroad to send back US$200 million in remittances this year, 16 percent higher than last year's $172.43 million, its deputy central bank governor said on this week.

Claver Gatete of Rwanda's Central Bank said in an interview that remittances was $126.07 million as of July 2010, thanks to changes in rules aimed at simplifying the process.

"Given the fact that we are at this level, we are going to way exceed the money we received last year, projecting to reach $200 million. This is because we have liberalized the process and the maximum amount," Gatete said.

Prior to 2009, individuals were allowed to send a maximum of $2,000 through money transfer agents like Western Union, while sums above that had to go through a bank account.

"Money sent through Western Union and MoneyGram was $28.7 million, through commercial banks was $22.9 million and $74.5 million was moved through forex bureaus in the first seven months of this year," said Gatete, of the money sent by July this year.

Under the new rules which came into effect in 2009, there are no limits to the amount an individual can send back home through money transfer agents

The ministry of foreign affairs is yet to carry out a census to determine the number of Rwandans living out of the country but the central bank estimates the largest group, of almost 20,000, live in Belgium.

Last month, the bank said that it had put in place new payment service regulations to allow more local and international remittance service providers to participate in the business.

Previously, the agencies had to use banks to send and receive funds and some big players got the banks in exclusive contracts and blocked out other service providers.

The new rules remove these exclusive contracts and there has been a noted increase in the remittance figures, the central bank said in a statement.

A new fund called the Rwanda Diaspora Mutual Fund was licensed and launched in December 2009 with an intention to have it list securities on the Rwanda over-the-counter market, the bank said.

"A number of Rwandese living abroad have expressed their desire to invest in government securities. Process is underway to facilitate them (to) participate in the October 2010 issuance," it added in the statement.

New study examines the cost of remittances

How much remittances cost depends on the number of migrants, the cost of living and competition among remittance service providers, according to a new working paper by Thorsten Beck and Maria Soledad Martinez Peria.

Looking at average costs across all types of financial institutions, the authors find that costs are lower in areas with more immigrants, lower incomes and more competitive banking sectors. By contrast, remittance costs are higher in areas with higher incomes and greater bank participation in the remittance market.

The study finds that costs don't vary much across all banks and money transfer operators. One exception is Western Union, one of the largest money-transfer operators, whose prices don't seem sensitive to competition.

The study draws on data covering 119 pairs of remittance-sending and -receiving countries from the Remittance Prices Worldwide database collected by the World Bank Payment Systems Group.

The findings are important to policy makers, because remittances are a very significant source of financing for developing countries. Moreover, in 2009, heads of state at the G8 Summit in L'Aquila, Italy pledged to reduce the average price of remittances from 10 to 5 percent within five years.

To download the study please click HERE.

Bulgaria ranks second in the EU in terms of emigrant remittances

Bulgaria ranks second in the EU in terms of emigrant remittances, just after the leader Romania, according to Eurostat data. Despite the economic meltdown, monetary remittances made by Bulgarian emigrants did not decreased significantly in 2009. Money transfers from Bulgarians working abroad amounted to €1.2 billion, which indicated a drop of 15% on the previous year’s volume.

Though some experts predicted a wave of Bulgarians returning to their homelands under the pressure of the economic crisis, their expectations proved wrong, as salaries in Bulgaria remain 14 times lower than the EU average.

Remittances – New money transfer service for Nepalese immigrant workers in the UK

UK based international remittance company Mobile Union has joined forces with Nepalese financial services provider Laxmi Bank and Nepal-based retail remittance operator United Remit, a business unit of the Chaudhary Group, to launch remittance service “mtxpress” in the UK.

With the new service, non-resident Nepalese people can deliver money home without having to visit a retail location. After completing the online registration process, consumers can send money to the desired recipient via a debit card. The recipient will be notified through an SMS that their cash is available for collection at any of Lamix Bank's or United Remits locations across Nepal. Customers who own an account at Laxmi bank can choose to directly credit that account, in which case the funds are available to draw down the next banking morning.

“mtxpress” is a service that offers peer-to-peer remittances via the internet. “mtxpress” will be rolled out globally during 2010, focusing on the South East Asia and African corridors.

Remittances to Nepal under threat

As if the global recession was not enough, migrant workers, Nepal’s best ‘export’ that contributes nearly 20 percent of the country’s GDP, are facing a series of recent worries. The month started with 153 Nepali workers in Macau losing their jobs. Then there was news of 108 workers being duped by manpower agencies stranded in Libya.

More bad news followed with Afghanistan President Hamid Karzai banning security agencies. It would lead to nearly 15,000-20,000 Nepalis working as security guards losing jobs.

Last month Nepal lifted a six-year ban on workers going to Iraq. While it came as relief to those who entered the country legally, the fate of nearly 100,000 illegal Nepalis in Iraq still hangs in balance. And Nepal has failed to persuade Israel to lift a 2009 ban on its workers.

These are worrying signals for the country that is largely dependent on remittances. At present Nepal receives around US $ 3 billion annually from the nearly three million migrant workers abroad (except India).

“The aftermath of the global financial crisis and the ensuing economic crisis is definitely a difficult time for Nepali migrants,” says columnist Chandan Sapkota.

The decline in demand of Nepali workers will directly affect remittances. It will also affect household purchasing power and sectors like real estate and imports where remittances money is flowing into.

Narrowing down of options won’t mean an increase in semi-skilled/unskilled Nepalis moving to India. But since the job market in Nepal is squeezing, skilled workers could turn to India, says Sapkota. India is home to nearly 10-12 million Nepali workers at present.

“The government has to wake up; seriously and with a detailed plan,” Sapkota says.

But with political stability eluding Nepal, when some measures will be put into place is anyone’s guess.

Ghanaian postal officer charged with remittance theft

A female Assistant Postal Officer of the Ghana Post at Suame in charge of the Western Union Money Transfer Service, accused of embezzling GH¢278,555 belonging to the Agricultural Development Bank (ADB), has appeared before a circuit court in Kumasi, charged with stealing.

Louisa Osei-Agyemang is said to have connived with some customers of the Western Union Money Transfer service of the ADB to inflate remittances and pocketed the difference.

She pleaded not guilty to the charge and the court, presided over by Mr. R.M. Kogyapwah, admitted her to a GH¢270,000 bail with two sureties to be justified. She is to reappear on September 22.

Corporal Godwin Ahianyo of the Ashanti Regional Police Public Relations Unit said Ms Osei-Agyemang’s activities came to light during an audit when it was detected that the total money advanced to the office for clearance did not tally with the amount of money expected to be released to customers.

A further examination of the books revealed that between January 2009 and early August this year, some of the customers were paid remittances far in excess of what they were due.

Cpl Ahianyo said a report was made to the Regional Accountant of the Ghana Post and Ms Osei-Agyemang was invited to the regional office to explain the unbalanced amount. The regional accountant referred the case to the police.

Mr Ahianyo said Ms osei-Agyeman was initially granted a police enquiry bail, but after preliminary investigations, she was re-arrested last Wednesday and appeared before the court.

Filipino workers in Switzerland hit by money scam

Filipinos in Canton Vaud and surrounding areas in Switzerland are angry over the money they lost through a remittance firm in Geneva.

The Filipino Community in Canton Geneva & Vaud have registered complaints against a local money remittance firm, which, they said, has defrauded overseas Filipino workers since it opened office in Geneva in 2009.

The firm reportedly entices Filipino workers through SMS by offering a higher money exchange rate for their remittances. However, the remittances were never made. The scam continues because many victims are undocumented Filipinos who are reluctant to file complaints with the authorities.

“Many of their clients are undocumented OFWs, and some are also their friends who chose not to make a complaint,” said Raymund-Michael Flores, founder the local Filipino community organization.

In a statement dated August 11, 2010 by “Erica” of Florissant, Geneva, she claimed that she sent 13,500 Swiss Francs last October 22, 2009 through the firm.

Erica said only P20,000 was forwarded to her account 3 months after she sent the money.

“I thought of cancelling my transaction (but) they keep on promising that it will be returned in no time,” said Erica. The group forwarded Erica’s letter to ABS-CBN Europe News Bureau.

The local Filipino community organization claimed that the frim has not only victimized Filipino workers in Switzerland, but also in the Philippines.

Remittances to Bulgaria reach new highs

Remittances from migrant workers are a lifeline to large sections of the Bulgarian economy, particularly the retail trade and the housing market. There has been a noticeable increase in the amount of remittances from Bulgarians working abroad over the last according to a new report.

Remittances from Bulgarians working abroad totaled € 702.5 million for the period June 2009 to June 2010, according to data from the Bulgarian Central Bank.

Studies show that the actual money sent home are about 30-40% higher that the official figures.

According to the World Bank, Bulgaria has one of the highest proportions of its population working abroad of any country in the world. In 2009 approximately one and a half million Bulgarians are based abroad, equal to 15% of the population. The largest Bulgarian communities are based in Spain, Germany, Greece, Italy, Romania and Turkey.

Remittances in the Gulf set to rise after fall-off

Western Union expects the amount of money that foreign workers in the Gulf transfer home to rebound next year after remittances declined in the second quarter of 2010.

Although remittance flows from the region should improve next year they were unlikely to return just yet to the peaks of the economic boom, said Christina Gold, the chief executive and president of Western Union.

Globally, remittances to developing countries are expected to rise by about 6.2 per cent this year before increasing again next year to reach a record high of at least US$350 billion.

“From our perspective, we see this as a challenging region in 2010 but we see opportunities coming into next year and see growth rebounding in the region,” she said.

“We are not seeing the growth we saw and seeing it pretty much steady on to last year’s numbers.”

Widely viewed as a shadow sector to banking, the money transfer industry enables migrant workers to send money to their families, who can pick up the funds either through transfer agents or through the internet.

Remittances from the region declined last year after the global financial crisis prompted a wave of redundancies. Workers in the Gulf’s property sector suffered especially as a drop in construction projects meant there was less demand for low-skilled migrant labour, who account for a large percentage of those who use money transfer services.

With activity remaining largely sluggish in the construction sector, money transfer transactions from foreign breadwinners are expected to finish the year at a similar level to last year. Western Union experienced a moderate decline in transactions in the Gulf states in the second quarter of the year.

Money transfer flows provide a useful gauge of the health of the global economy, with remittances often among the first to be affected once the economic outlook begins to slow.

“In some parts of the world it’s a leading indicator and other parts of the world it’s a lagging indicator,” said Mrs Gold.

Remittance flows from the US to Mexico dropped long before other signs emerged of a deceleration in the US economy, she said.

In contrast, in Dubai the company began to see a decline in transfers about 12 months after economic indicators first showed evidence of the global financial crisis hitting the emirate.

“The more remittances are dependent on customers in a lot of different industries, it tends to be more of a lagging indicator,” she said.

While Russia and the US, in particular, were now showing signs of a pick-up in transfers, evidence from other countries showed they were still struggling to emerge from the financial crisis.

With unemployment running at up to 20 per cent in Spain, remittances from the country had yet to improve, she said.

Until last year, the US payment services company’s business in the Gulf had grown at double-digit levels as the region underwent an economic transformation requiring the employment of a high volume of workers from overseas.