Staff Reporter :
With a dedicated mobile app, Bangladesh can attract more remittances enabling migrant workers to send money to their families at home in real-time from anywhere at any time, industry experts say.
Inward remittances into the country dropped by 15 per cent in the fiscal year (FY) 2021-22 over the previous fiscal, according to Bangladesh Bank. The remittance inflow declined by around 5.0 per cent in June alone compared to that of the previous month (May).
As the remittance is falling, the foreign exchange reserve has come under severe pressure in recent days which has created an uncomfortable situation for the government to meet import demand that has forced the Finance Minister AFM Mustofa Kamal to beg for a multi-billion dollar loan from IMF and more from other multilateral donors.
The central bank and other banking sources, however, attributed the decline in the remittances to the inflow of a significant volume of foreign currencies through informal channels, meaning ‘hundi’- a traditional informal channel that deprives the National Exchequer of the legitimate deposition of foreign currency earned and sent by hardworking Bangladeshi expats.
Many migrant workers especially those who work in the Middle East countries particularly Saudi Arabia, Qatar, Kuwait, Oman and Bahrain are sending money to their family members in Bangladesh through some agents of international remittance service providers connected to Bangladesh mobile financial services (MFS) while others send through unofficial channels.
From the migration process to remitting money to their families living in rural areas, the expatriate Bangladeshis have a feeling of being exploited and their frustration leads them to illegal Hundi for a better rate, lower fee and convenient remittance transactions.
“But this is not enough now. More countries have developed dedicated remittance apps for their workers living abroad. Bangladesh, being one of the largest nations of MFS users across the globe has the opportunity to earn more remittances through its own remittance apps,” said Salim Ahmed, a teacher living in Saudi Arabia.
“Here most Bangladeshi workers are labourers, maidservants and home workers. As, they are not enough educated and not skilled in using existing remittance apps,” said Ahmed.
“But they use phones, regularly talk with their friends and family members and are very much familiar with sending money through bKash, Rocket, Nagad and others. So, Bangladesh can attract more remittances from these workers with a user-friendly remittance app in collaboration with all bank-led MFS operators,” he said.
Industry experts say a dedicated mobile app can attract these workers to send money instantly to their family members. This will reduce the cost of transactions and delivery significantly.
As the operators will be Bangladeshi MFS providers partnered with banks, the central bank will be able to monitor real-time fund flow through such remittance apps, they say.
“Mobile Financial Service is a unique payment method and the best tool for the last mile solution,” said Dr Yousuf Khan, a remittance expert and former Deputy Managing Director of Mercantile bank.
“Hundi traders are now misusing this tool effectively, so banks should immediately deploy this innovation in its remittance service model and offer better rates to keep migrant workers,” he said.
Realising the potentiality of mobile remittances, many developing countries have developed mobile apps to attract remittances. Inflow of remittances to Kenya has increased tenfold in the last 15 years reaching an all-time record to $3,718 million in 2021 after the introduction of GlobalPay’ app launched by M-PESA of Kenya.
A survey conducted by the central bank of Kenya in 2021 established that the Kenyan diasporas prefer digital service providers due to convenience, efficiency in terms of speed / prompt service and ease of access. On average, recipients receive the funds sent on the same day, reflective of the high efficiency of these channels.
Kabayan Remit is the leading single corridor online money transfer platform in the UK, with a sole focus on money remittances sent to the Philippines.
Every year, around 500,000 Bangladeshis leave the country to work abroad to contribute 15 per cent of GDP through sending hard-earned remittances. The World Bank has predicted that Bangladesh may continue to experience a meagre growth in remittance inflow of only 2 per cent to $22 billionin 2022- much lower than Pakistan- 8 per cent to $34 billion and India- 5 per cent in 2023.
