Remittances

This case study forms part of a series of case studies on good practices, lessons learnt and recommendations extracted from the projects supported by the UN Joint Migration and Development Initiative (JMDI) to enhance migration management for local development. The experience of the JMDI shows that the most effective initiatives are anchored with local or regional authorities and carried out in a multi-stakeholder and participatory approach, including migrants and migrants’ associations or diaspora.

On 16 February 2016, the 176 member states of the Governing Council of IFAD, unanimously declared 16 June the INTERNATIONAL DAY OF FAMILY REMITTANCES. 

The Objective of this day, now held annually, is to recognize and raise global awareness of the fundamental contribution made by migrant workers to the wellbeing of their families and communities back home, and to the sustainable development of their countries of origin.

The Indian ICICI Bank offers hybrid solutions with remittance kiosks and ATMs in migrant areas and dormitories. Kiosks in Singapore and Bahrain can be used to transfer funds to India on the same day. ICICI sees mobile banking as a powerful medium for further financial inclusion.

The provision of basic skills to manage finances can have a considerable impact on the choice of modes of remittance transfers, expenditure preferences, savings behaviour and options for converting remittances into assets.

In 2016 IFAD launched its 6th Global Call for Proposals: Scaling Up Remittances (SURE) aiming at financing innovative models to increase economic opportunities for the rural poor by leveraging the impact of remittances and diaspora investment for rural development.

Remittance price comparison websites can increase market transparency and encourage greater competition. Examples include Saver Asia and SendMoneyPacific.

The Bangladesh Bank, national commercial banks, and public commercial banks have created a number of investment products aimed specifically at migrants and their families. These products include bonds, deposit pension schemes (DPS), fixed deposits, savings accounts, investment loans, and investments in capital markets through, for instance, the Non-Resident Investor’s Taka Account (NITA).

The Pakistan Remittance Initiative (PRI) was launched in 2009 by the State Bank of Pakistan, the Ministry of Overseas Pakistanis and the Ministry of Finance for the purpose of (a) facilitating and supporting a faster, cheaper, convenient and more efficient flow of remittances, and (b) to create investment opportunities in Pakistan for overseas Pakistanis. The PRI has encouraged the financial sector to provide greater commitment to remittance services.

The program’s overarching strategic goal is to improve the overall market for remittances and ultimately achieve further financial inclusion, broader usage of electronic payments and the reduction of the cost of remittances while maintaining financial stability. This will allow migrants and their families a net increase of the available resources for their daily needs, savings as well as investments.

The program is executed by the World Bank’s Financial Infrastructure and Remittances Service Line, which is part of the joint WB/IFC Finance and Markets Global Practice.