MANILA, PHILIPPINES - The Asian Development Bank (ADB), with assistance from the Government of Japan, is launching a first ever remittance investment project to provide safe, affordable remittance services to thousands of Bangladeshi migrant workers and their families.
The ADB Board of Directors approved a $2 million grant from the Japan Fund for Poverty Reduction which will be used to fund technology linking microfinance institutions and banks. It will give at least 20,000 rural migrant worker households access to formal remittance services for the first time.
"Currently many rural migrants and their families are forced to rely on informal remittance outlets which are undocumented and risky, and this project, using debit cards, point of sale terminals and other innovations will allow people in remote areas to send and receive funds through the formal banking system," said Mayumi Ozaki, Finance Specialist (Rural and Microfinance) in ADB's South Asia Department.
The project will fund remittance and financial literacy training and an awareness campaign to provide guidance to returning migrant workers on investment products and employment opportunities. The goal is to help each household save, or invest, an additional $300 annually.
Remittances are Bangladesh's most important source of foreign exchange, with about 300,000 people a year going abroad for work. Formal inflows reached about $9 billion in 2009, and play a vital role in rural spending on food, housing, education and healthcare.
Along with the ADB-administered grant, the Government of Bangladesh will contribute $29,000 with banks and microfinance institutions providing nearly $386,000, for a total cost of over $2.4 million. The Ministry of Finance is the executing agency for the project, which will run for 3 years to 2013.