3 very practical ways countries can cut the costs of sending money overseas from migrant workers to their families back home.
Money’s in the Mail Mum!
International remittances from migrant workers to their families back home is not only a leading way to reduce household poverty but also a significant source of foreign exchange earnings for developing countries.
As transfer fees are too high, countries need to cut the costs of sending money overseas so migrants and their families will have more to spend.
ADB Institute has three smart solutions to send your money back home efficiently:
Discourage exclusive partnerships with a national post office or a monopoly by one service provider or a commercial bank. That only keeps remittance fees high and leads to increased costs to the migrants.
Instead promote competition between banks and international money-transfer agencies and link banks with microfinance institutions to reduce remittance costs. This will directly benefit the migrants sending the money and their families who receive it.
Offer practical financial education for migrant workers before they go abroad so they will know the best and cheapest way to send money home as well as how to save and invest in the future for themselves and their family.
Cutting costs in these ways will boost the amount of money available to remit, thus accelerating poverty reduction in migrant-sending countries.