India was the largest remittance-receiving country in the world, with migrant workers from the country sending home $69bn in 2017, according to a report which said remittances to the Asia-Pacific region amounted to $256bn last year.
The report RemitSCOPE, Remittance markets and opportunities Asia and Pacific, said China ($64bn) and the Philippines ($33bn) are the world's second and third largest remittance-receiving countries.
Pakistan ($20 billion) and Vietnam ($14 billion) are also in the top 10 who received remittance.
About 70% of remittances sent to Asia and the Pacific come from outside the region and in particular from the Gulf States (32%), North America (26%), and Europe (12%).
By 2030, around $6 trillion in remittances are expected to be sent to developing countries.
Last year's remittance
Last year, migrant workers sent $256bn to their families in the Asia-Pacific region, the report released by the International Fund for Agricultural Development (IFAD) said.
The remittances represented 53% of flows worldwide, growing 4.87% since 2008, with rates flattening in recent years.
Remittance outflows from the region amount to $78bn and 93% of the flows remain in the region.
Rural areas
Remittances are particularly crucial in rural areas where poverty is the highest. Worldwide, an estimated 40% of the total value of remittances goes to rural areas.
However, in the Asia-Pacific region, remittances go disproportionally to countries with a majority of rural populations such as Nepal (81%), India (67%), Vietnam (66%), Bangladesh (65%), Pakistan (61%), and the Philippines (56%).
Remittance effect
Remittances contribute to the Asia-Pacific region more than 10 times the official development assistance in the region, the report said.
In the region, 400mn people, one out of every 10 people, are directly affected by remittances either as a sender or as a receiver.
The report said while remittances benefit about 320 million family members in the region, remittance markets still need to transform.
Barriers
De Vasconcelos pointed out that outdated regulatory barriers on both sending and receiving ends result in higher and less transparent costs for the 2 billion transactions a year most amounting to just $200 to $300 each. They make it less likely and more difficult to convert remittances into savings/investments.
The report said cash-to-cash transactions remain by far the most common form of transfer.
Technology
Technology is helping in account-to-account transfers
It is only recently that technology is beginning to move markets towards account-to-account transfers through digital operations.
While financial inclusion has increased since 2011 with half of the adults in the Asia-Pacific region having a bank account, the report said, adding this does not represent the reality of the substantial majority of remittance receiving families where financial exclusion remains predominant.
SOURCE: News Byte
