The International Fund for Agricultural Development (IFAD) released the new web portal "Remitscope" and published the report RemitSCOPE - Remittance markets and opportunities – Asia and the Pacific.
Both were presented at the Global Forum on Remittances, Investments and Development – Asia Pacific, which took place in Kuala Lumpur, Malaysia from the 8th to 10th May 2018. The forum brought together more than 300 policy-makers, private sector stakeholders and civil society leaders to map out the road ahead for enhanced remittances.
Since its inception over ten years ago, the Global Forum on Remittances, Investment and Development (GFRID) has served as a platform to raise awareness, facilitate dialogue and promote collaboration on the contribution of migrant remittances to development. By bringing together member states, international organisations, the private sector and civil society, the forum allows stakeholders to showcase good practices and build partnerships to leverage the role of remittances in countries and communities of origin towards achieving the Sustainable Development Goals (SDGs).
Remittances are particularly crucial in rural areas, where poverty is highest. World-wide, an estimated 40 per cent of the total value of remittances goes to rural areas. However, in the Asia-Pacific region, a disproportionally high level of remittances goes to countries with a majority of rural populations, such as Nepal (81%), India (67%), Viet Nam (66%), Bangladesh (65%), Pakistan (61%) and the Philippines (56%). Remittances to rural areas are generally costlier due to expenses associated with offering access points in distant locations.
Last year, migrant workers sent USD 256 billion to their families in the Asia-Pacific region, according to the report RemitSCOPE - Remittance markets and opportunities – Asia and the Pacific and the new web portal on remittances released by IFAD. While remittances benefit about 320 million family members in the region, most of them in rural areas, remittance markets still need to transform to ensure that families can fully benefit from the flows.
The report is a synthesis of the latest remittance data and analysis and remittance-market profiles of 50 individual countries. The ambition of this new web portal is to help decision-makers and industry transform remittance markets for cheaper, faster and safer transactions, in particular for rural areas.
According to the report, the cost of sending money to the region has decreased. Lower transfer costs mean more money available to families. IFAD Senior remittance expert Pedro De Vasconcelos explains that further efforts are needed. For digitalisation of transfers to happen, regulators and private sector companies needed to work further together to harmonise legal and regulatory frameworks between countries and support the design of products driven by customer needs, De Vasconcelos says.
In the region, families generally spent about 70 per cent of remittances to meet basic needs, such as food, clothing, healthcare and education. The remaining 30 per cent, amounting to USD 77 billion, could be saved and invested in asset-building or income-generating activities, helping families to build livelihoods and their future, according to De Vasconcelos.
Although financial inclusion has increased since 2011, with half of the adults in the region running a bank account, with the exception of the excluding high-income economies, this does not represent the reality of the substantial majority of remittance-receiving families, where financial exclusion remains predominant.