World Bank Says Payments Deregulation Needed to Boost Remittance Flows
Remittance flows to the developing world are expected to total US$406bn this year, said the World Bank, but it added that the promise of mobile remittances has not yet been realised.
The World Bank reported that the growth in remittance flows exceeds earlier estimates, rising by 6.5% over 2011. Further growth is expected in the year ahead, with remittances to developing countries projected to rise by 7.9% in 2013, 10.1% in 2014 and 10.7% in 2015 to reach US$534bn in 2015.
According to the World Bank, the promise of mobile remittances has yet to be fulfilled, despite the skyrocketing use of mobile telephones throughout the developing world and systems such as M-Pesa in Kenya. It suggests that mobile remittances fall in the regulatory void between financial and telecom regulations, with many central banks prohibiting non-bank entities to conduct financial services. “Central banks and telecommunication authorities, thus, need to come together to craft rules relating to mobile remittances,” states the report.
The top recipients of officially recorded remittances for 2012 are India (US$70bn), China (US$66bn), the Philippines and Mexico (US$24bn each), and Nigeria (US$21bn). Other major recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon.
“The global community has made progress in three out of four areas of the global remittances agenda – data, remittance costs, and leveraging remittances for capital market access for countries,” said Dilip Ratha, manager of the World Bank’s migration and remittances unit.
“Progress, however, has been slow in the area of linking remittances to financial access for the poor. There is great potential for developing remittance-linked micro-saving and micro-insurance schemes and for small and medium enterprise (SME) financing.”