The inward remittances rebounded last financial year with a hike of 14.79% from 2017 remittance of USD 12.8 billion to an estimated USD 14.98 billion remittances in 2018.
After a setback due to a steep decline for the past three years, the trend is picking up. The spike in remittance can be attributed to a few factors. Such as the rise in oil prices, the fall of Bangladeshi Taka against the US dollar, and most importantly increase in adoption of formal channels by the Bangladeshi migrants worldwide.
After readymade garments (RMG), remittance inflows are the second highest foreign currency earnings for the Bangladeshi economies. Remittance sent by the Bangladeshi migrants makes significant contributions towards the overall economic development of the country. Here are 5 major Benefits of Remittances to Bangladesh:
According to the World Bank, an estimated 7.5 million Bangladeshis are immigrants around the world and approximately 2.8 million live within the Middle East.
Historically, a large number of Bangladeshi expatriates were unskilled, constituting over 60% of the total population of overseas workers. As of 2018, there has been a significant rise in skilled workers according to the data by the Bureau of Manpower, Employment, and Training (BMET).
“Hundi”, an informal money carrier system was very popular amongst the Bangladeshi migrants in the past. In 1974, Wage Earners' Scheme was initiated in order to promote the use of formal channels such as demand draft, traveler's check, telegraphic transfer, postal order, direct transfer, and through ATMs.
The scheme soon became popular among the Bangladeshis working abroad and their remittances have significantly increased over the years. In 2010, Bangladesh joined the 10 billion USD club of remittance inflow. To further strengthen the formal infrastructure, the Bangladeshi government has been closely working with some source countries to penalize establishments allowing informal channels.
Although there are several ways of sending money to Bangladesh, the best way of sending money to Bangladesh is online. Online players offer speed, security, and great value. Some of the best players in the market are InstaReM, Wise (formerly known as TransferWise), Xoom, Transfast, Money2Anywhere, and Ria. Companies like CompareRemit provide a free platform to compare the exchange rates, the speed of delivery, fees, etc offered by the top players before sending money.
After the introduction of Mobile Financial Services in 2010, Bangladesh has seen a surge it the adoption of mobile wallets and it is increasingly becoming popular. According to the central bank of Bangladesh, over 5 Million USD was remitted through mobile financial services in the month of January 2019. Top mobile wallet players in the market are bKash, Rocket (Dutch Bangla Bank Ltd), UCash, MCash, SureCash, and of these, bKash, and Rocket tops the list.
The advent of technology has helped Bangladeshis to send money economically with utmost security. The introduction of mobile has enabled them to send their remittances to their families even in the most remote places of Bangladesh. Jim O’Neill, the man who coined the term “BRIC” for Brazil, Russia, India, and China has listed Bangladesh as one of the “Next Eleven” for its potential of economic growth. Join us in following the changes in the industry by subscribing here.