The remittances sent around the world have increased manifold over the past few years. Every year increasing number of remittances is sent across the countries. Despite worse economic conditions, the number of remittances has increased in the year 2012 and 2013. Remittances depend, to a great extent, on the number of migrants; both across the countries and within the country. Following are the statistics on the remittances that would help money transfer businesses realize how big a money transfer industry is, and has the potential to grow even bigger.
International migration has a great impact on the economic growth of the country – both the origin and destination. According to the United Nations, more than 230 million people live outside their countries of birth in 2013. An even larger number of people migrate within their countries – 700 million. People migrate in search of better living and higher income. Hence, it wouldn’t be a false proposition to state that migration is directly proportional to the remittances.
With increasing number of migrants, the remittances have increased as well. People in other countries tend to support their families in home countries. A large number of migrants belong to the developing countries. It is estimated that $414 billion are sent in remittances to the developing countries in 2013. This figure increases to $550 billion when remittances to developed countries are added. This is the record number of remittances sent across the world, and shows an increase of 6.3 % over the last year.
Developing countries are the ones that receive most of the remittances. Understandably so, developing countries are poor relatively to the developed countries, and hence migration takes place from the developing countries towards the developed ones. The largest recipients of remittances are India ($71 billion), China ($60 billion), Philippines ($26 billion) and Mexico ($24 billion). All these are developing countries. The first two, India and China, are the world’s most populous countries, and hence migrations from these countries represent an increased number of remittances sent back. Other large recipient countries are also developing ones; Egypt, Pakistan, Bangladesh, Nigeria and Vietnam.
As a share of GDP, the list is again dominated by the developing countries as a recipient of remittances. Tajikistan, a developing country, receives remittances that are equal to 48% of their total GDP. This means that almost half of Tajikistan’s GDP depends on the remittances. Other countries that are large recipients of remittances include Kyrgyz Republic (31%), Nepal (25%), Lesotho (25%) and Moldova (24%).
Remittances, as evident from the above figures, play a very significant role in the lives of people living in the developing countries. Remittances sent back home help better the financial situation of millions of people. Remittances help economies as well. Higher remittances mean that people will have more funds to spend, and higher spending means higher economic activity, which is always good for any economy.
However, the remittances sent across the countries have a price – the money transfer fee. The money transfer businesses charge a small fee when money is sent through them to other countries. This fee varies from business to business. Remittances costs have fallen steadily over the last few years, but they still remain high; especially in Africa and in countries where the dependence on remittances is high.
All money transfer businesses will be encouraged by the figures above. The good news for them is that the remittances are estimated to increase in the next few years. Hence, there are more chances for the money transfer businesses to make more money in the future.