Imagine this, going to your home country every month with a proud feeling of satisfaction, sending remittance, and being able to afford the everyday needs for you and your family. Can't afford that? No worries! Read on the blog article below to learn more about affordable remittances.
The UK's ability to thrive relies on the resilience and determination of migrant workers who come here. Today, they feel the importance of their role more than ever before.
According to the BBC, it is estimated that as of the third quarter of 2021, 18% (5.9 million people) were migrant workers in the UK. There has been a steady rise in the percentage of UK workers born outside the country since 2004 (9.1% in Q1 2004 to 17.8% in Q1 2019), and this trend is expected to continue.
Financial inclusion creates economic stability. The UK has a long-standing tradition as a source of remittances to migrant workers’ country of origin under the auspices of bank transfers, cash and vouchers, but these have high transaction costs.
Relying on remittances has had other benefits too. The cost of sending small amounts has gone down with online money transfer platforms and domestic bank transfers, making overseas transfers cheaper and faster.
What factors determine the cost of remittance?
In discussing the cost of remittance, five key factors are usually mentioned: amount private bank charges which traditionally comprises of foreign currency conversion rate (FX), transfer fee, and physical transport cost. Each of the above factors plays a distinctive role in determining the cost of remittance. However, we have intentionally focused on two critical aspects in this case study — foreign currency exchange rates and transfer fee.
Both currency conversion rates and transfer fees are still primarily determined country-to-country. In addition, International remittances globally are determined through international markets and banks charging at their own discretion while physical transport costs tend to be standard across remittance corridors (dependent on regulations, the scope of the infrastructure, etc in a particular country.)
Reinforcing the value of remittances
About 4 million people living abroad in the UK remit money home weekly, monthly or annually. According to world bank, the campaign called Affordable Remittances 2022 targets to reduce the price of remittances in the short term so that by the third quarter of 2022, less than 6% of migrant workers feel excluded from making an affordable remittance.
Why Affordable Remittance?
The remittance for migrant workers is a curse and a blessing. The prices of money transfers make it unaffordable for the migrant worker, who may be sending as much as $200 a month, or sometimes in a week depending on the circumstances, to stay in contact with loved ones. On the other hand, remittances are what keep many communities from struggling endlessly in poverty. There is no one-size-fits-all solution to this problem, but there are changes that can help make the process more affordable for a migrant worker sending money back home to their loved ones.
Government role in affordable Remittance
African nations are undergoing rapid transformation due to having the world's youngest and fastest-growing populations. The goal of the UK government is to build long-term and mutually beneficial relationships with African countries. For a better, safer, and more successful future for all.
The involvement of the UK government’s Department for International Development is very crucial. In a post-Covid world, European countries, including the United Kingdom should carefully consider their international development policies such that international remittance is viewed as a sector that has the potential to alleviate poverty in the developing countries. It's not uncommon for migrants to leave their country of origin if they can't find a path into the labour force. However, the UK’s Office for National Statistics data shows that higher and higher numbers of skilled migrants returning back to their countries of origin thus reversing the original brain drain in these countries. Contrary to rightwing stereotypes, few migrant workers are interested in a life on benefits. They have families to assist back home and the best and most dignified way to do so is through work. It is very common in the developed countries to see migrant workers working in different sectors of the economy from doctors and engineers right all the way to carers, bus and taxi drivers as well as seasonal fruit pickers at farms.
When, for example, the technology of a Nigerian bank integrates seamlessly with a remittance company like SafariRemit in the UK, the end result is faster, cheaper transfers for sender and recipient alike.
The findings in the National Statistics report shows that when the government shares the very same intention of making sure remittance thrives into the future, it would make affordable remittance service viable and realistic to implement.
- According to Africa.com, remittances will reduce the cost for global migrants to send money back home, with the fares currently averaging 7% and 10%,
- Second, these services will promote financial inclusion by supporting migrant workers who send a good proportion of their earnings to relatives each year.
According to labstimes, an estimated $583 billion was returned back to home countries by immigrants worldwide in 2014, with $440 billion of the money coming to developing nations. Over the course of seven years, this has grown to more than $600 billion.
The World Bank Group provides data on remittances and migration. The Bilateral-Remittance matrix of the World Bank was used to estimate the overall migrant population. International migration and remittance outflow estimates in this data collection are derived from a variety of primary and secondary sources and may not reflect the full amount of remittances in some circumstances.
With SafariRemit, we reward the resilience of migrant workers and open an affordable channel for immigrants to send money to their loved families back home with ease and flexibility. SafariRemit makes it simple to send money to a number of African countries which continues to increase, whether you're at home, work or on the go, using your laptop or mobile device. Moreover, all transfers are securely handled.
Our flexible money transfer solution puts immigrant workers in charge of how they want to send and receive money by giving them choices. So pay your loved ones back home whenever and wherever you choose and avoid the long lines at the banks. Incredibly user-friendly, both on desktop and on mobile devices.
SafariRemit's quick money transfer service is perfect if you value speed and cost over everything else regarding your remittances. With our fast remittance service, you may send money in seconds after signing up.
The long-standing tradition of remittance transcends national boundaries. Remittances play an important mutual role in developed and developing countries' economies. Migrant workers help industrialised countries fill their workforce shortage (both skilled and unskilled) and generate large amounts of tax income. The money they send back to developing countries such as Africa helps to keep the continent stable. Everyone benefits from more efficient and less expensive remittances.