Incentives for remitters will not work if market conditions are not right
’The latest scheme proposed by the Bangladesh Bank to encourage migrants who send their money to Bangladesh to use the formal channels has limited chance of succeeding in the current market conditions’ says Leon Isaacs, Managing Director of the International Association of Money Transfer Networks. ’The plan is to encourage people to send money home through the formal (predominantly bank) channels by entering their data into a lottery which would be drawn every quarter. Unfortunately, the difference between the formal exchange rate and the parallel market rate is currently at 16% which will make it very hard for an individual to sacrifice that amount of money on the slim chance of winning the lottery.
’Efforts made by the central bank to move consumers from the informal sector to the formal are to be applauded. However, direct action to reduce the price differential and at the same improve availability of remittances in the rural areas are likely to create the right environment. Once this happens a lottery is a good idea to start attracting people into the formal sector. Until that happens this initiative is probably more of a gimmick’ said Isaacs.
IAMTN is the only international trade association, representing Money Transfer industry across the globe.
The members of IAMTN provide the full range of money transfer (remittance) services to private individuals and small businesses in over 150 countries and territories.
As a truly global lobbyist of the remittances industry, IAMTN raises awareness of importance of the money transfers as one of the most dynamic sectors of the world economy as well as a widely spread social phenomenon.
IAMTN works closely with governmental agencies, financial regulators and anti-money laundering bodies to make sure that the money transfers legislation reflects the realities of the modern world and provides for efficient and affordable remittance services to the customers around the world.
As a trade organisation, International Association of the Money Transfer Networks provides its members with access to the potential business partners internationally, research data on money transfers and associated industries.
Over 4300 industry professionals and members of the press subscribe to the Money Transfers newsletter, published by IAMTN.
IAMTN is the key driver of the Annual Global Consumer Money Transfers (GCMT) conference in London and Money Transfers Dubai which is being held on 9 March at the Shangri-La Hotel in Dubai.
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