Remitting money to family members is a responsibility that most overseas workers working in countries like the US, UK and Canada have to shoulder. These days remittance has got faster, simpler and easier for the remitters as well as the beneficiaries. With a host of money transfer agencies offering a wide range of services to the clients, the problem of sending instant cash has been eliminated to a considerable extent. The scope for improvement however, is still open and the remitting agencies and banks must strive towards making the entire procedure even simpler. Reducing remittance costs is one such area that needs immediate attention. The regulation of informal services has been a regular practise that needs to be implemented in such a way that the purpose of reducing remitting costs is fulfilled at the end.
One of the ways by which the remitting costs can be curbed is by helping the poorer sections of the society to gain access to the formal financial services. To let this happen the governments have to play a major role by establishing banks and other financial institutions in the rural parts. The migrant and his family should have some sort of identity cards along with some access to the credit unions in the remittance market. In countries like India, Philippines, etc the governments have taken some commendable steps to ease the whole remittance procedure. The strong postal systems in these countries have facilitated the overseas workers who remit money on a regular basis.
By ensuring that the remitting costs are systematised the governments can improve the credit worthiness of their respective economies and expand access to capital and lower borrow costs. But the government should refrain from providing incentives to direct remittances to specific sectors through matching fund programmes.
