Migrants around the globe sent more than $300 billion to their home countries last year, a “staggering” sum that surpassed foreign development aid and foreign direct investment and carries major development potential for poor nations if properly channeled.Migration plays a critical role in sustaining the Bangladeshi economy. In 2005-06, official remittances into Bangladesh constituted $4.8 billion, equal to 7.73% of GDP, and over three times higher than net aid flows into Bangladesh. It is estimated that in 2006-07 remittances will exceed $6 billion. (The Daily Star)
India took in more remittance money last year than any other nation, $24.5 billion. It was closely followed by Mexico, with $24.2 billion, which receives most of its remittances from migrants in the United States
However the above figures are the money remitted through official channels like bank , transfers, drafts and postal remittances. The problem is that these are expensive and especially the official banking channel involves opening bank accounts (which singles out a lot of population in the rural areas who do not enjoy banking facilities or are simply wary of bank accounts). Moreover after 9/11 many Western countries track large transfers and people fear harassments from authorities. There are many unofficial ways to send to these people like Hundi (or hawala in India). And these involve a lot of risk and are not cheap either.
In recent days more and more of these money are being remitted with the help of agencies like Western unions or other money transfers via local banking channels and the process does not require the receiver having a bank account. There is a huge potential of the banking/financial sector in remittance management of the developing countries.
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