For me, it’s very fulfilling to be part of an industry that links people across so many countries, and benefits economies all around the world. Remittances sent home by expatriates and migrants create opportunities for a large number of people – it improves quality of life, creates small business opportunities and powers investments in education and healthcare.
According to the World Bank, worldwide remittances in 2015 stood at USD 581.6 billion, of which developing countries received USD$431.6 billion – almost three times the amount of official developmental assistance1.
Given the benefits it brings, it’s good news that the remittance industry is growing year on year. In April 2016, the World Bank released a report stating that remittances to developing countries would grow at least 4% in 2016 and 20172. While the pace of growth can fluctuate, it’s absolutely certain that the volumes being remitted around the world will grow every single year.
Globally, the United States is the number one destination for migrants, and also the most powerful remitting market. We’ve also seen the growth of the MENA region that has emerged as a very crucial hub for money transfers. GCC countries – with their strong economies and active job markets – generate a lot of international money transfers. There are two regions at play here – from Gulf countries to Asia, and from Gulf countries to other Arab nations within the MENA region.
Saudi Arabia stands tall in second position globally, both in terms of migrants and the money it remits to other countries3. The UAE is another key outward remittance hub in the MENA region and the third largest send country in the world4. The Kingdom of Saudi Arabia and the UAE together sent over USD 75 billion (KSA- USD 45.439 billion & UAE –USD 30.17 billion) in outward remittances originating from the Middle East5. In 2015, the Middle East sent USD 120 billion in money transfers to different countries across the world, cementing its position as one of the top remittance sending regions in the world. Remittances from MENA have a powerful economic impact on many developing economies, especially in South Asia, Africa and a few Arab countries.
What’s exciting about the MENA remittance market is its huge potential for growth. While, Qatar has won the rights to the 2022 FIFA World Cup, Dubai is hosting the Expo2020 and Saudi Arabia is building a bridge across the Red Sea that will link it to Egypt. These developments mean that more job opportunities will be created that will attract talent from across the region – in turn an increase in remittances being sent back to home countries.
Increase in remittances will benefit the world by linking economies and creating new opportunities. For remittance brands, the challenge is to deliver the customer service and innovation to support this growth. I see this as a very exciting challenge for us all – one that I look forward to embracing.
Written By Sudhesh Giriyan, COO, Xpress Money