Migrant Remittance Flows: Findings from a Global Survey of Central Banks (World Bank Working Papers)

Drawing on the findings from responses to a survey conducted in 2008 09 from 114 central banks worldwide (of which 33 are in Africa), Migrant Remittance Flows aims to better understand how central banks and other national institutions regulate and collect data and other information on cross-border remittance flows. Findings indicate that, although the vast majority of countries, in both sending and receiving countries, collect data on remittances, and 43 percent of receiving countries estimate informal remittances, there is a need for more frequent and better coordinated data collection, both across national institutions and among different divisions within the same national institution, as well as between countries. Survey results also indicate that many new market entrants transfer activities are unregulated. Countries must take into account new channels and technologies, such as mobile phone service providers, in monitoring remittance flows. It will be important for national regulatory authorities to work closely with mobile telecoms network operators to strike the right regulatory balance, to better understand these new channels associated risks and fully tap their potential for fostering inexpensive, efficient remittance transfer services. The high cost of transfers was cited in the survey as the top factor inhibiting migrants from using formal channels. Many countries, particularly in Africa, have made progress in rendering exclusivity contracts illegal, which helps increase competitiveness and reduce transfer costs. But further policy reforms and initiatives are needed to address the high costs of remittances. The joint African Development Bank-World Bank Africa Migration Project and G-8 Global Remittances Working Group provided partial funding support for this study. Contents 4 Abstract 6 Foreword 8 Acknowledgments 9 Acronyms and Abbreviations 10 1. Introduction and Main Findings 12 Policy Implications 14 2. Findings from the Survey 16 Data Collection and Recording of Migrant Remittances 16 Regulation and Supervision of Remittance Transfers 22 Remittance Costs 24 Policies to Improve Remittance Transfers 27 3. Policy Implications 32 References 35 Appendixes 36 Appendix 1. Survey Questionnaire: Focus on Remittance Inflows 37 Appendix 2. Survey Questionnaire: Focus On Remittance Outflows 60 Appendix 3. Geographical Distribution of Responses to Survey of Central Banks 83 Table 2.1. Migrant Remittance Inflows Are Better Monitored than Outflows 17 Table 2.2. Central Banks Are Starting to Record Transfers through New Remittance Technologies and Channels 21 Table 2.3. Many Remittance Services Providers (Particularly Newer Entrants) Are Not Supervised 22 Figure 2.1. Data and Information Collected from Household and/or Overseas Migrant Surveys is the Top-Cited Method for Estimating Remittance Transfers through Informal Channels 19 Figure 2.2. There Is a Large Discrepancy between Remittance Data Reported in Surveys and Those Compiled from IMF Balance of Payments Statistics for Some Countries 20 Figure 2.3. High Cost was Cited as the Top Single Factor Inhibiting Use of Formal Channels for Remittance Transfers 25 Figure 2.4. High Cost Was Strongly Cited as the Top Factor Inhibiting Use of Formal Channels in Sub-Saharan Africa 25 Figure 2.5. Requiring MTOs to Partner with Banks to Receive Remittance Inflows Is Associated with Perception of High Costs 26 Figure 2.6. Compulsory Conversion of Remittance Inflows into Local Currency Is Associated with Perception of High Costs 27 Figure 2.7. Better Statistics and Studies Were Top-Cited Areas Needing Attention for Improved Efficiency and Security of Transfers 28 Figure 8. Better Statistics and Studies on Migration Was Cited by Nearly 80 Percent of Sub-Saharan African Respondents as Needing Attention for Improved Efficiency and Delivery of Remittances 28 Box 2.1. Data Collection Practices of Countries that are Both Remittance-sourc e and Remittance-receiving: Some Examples 18 9780821383605 Contents ......Page 4 Abstract ......Page 6 Foreword ......Page 8 Acknowledgments ......Page 9 Acronyms and Abbreviations ......Page 10 1. Introduction and Main Findings ......Page 12 Policy Implications ......Page 14 Data Collection and Recording of Migrant Remittances ......Page 16 Table 2.3. Many Remittance Services Providers (Particularly Newer Entrants) Are Not Supervised ......Page 22 Remittance Costs ......Page 24 Figure 2.6. Compulsory Conversion of Remittance Inflows into Local Currency Is Associated with Perception of High Costs ......Page 27 3. Policy Implications ......Page 32 References......Page 35 Appendixes......Page 36 Appendix 1. Survey Questionnaire: Focus on Remittance Inflows ......Page 37 Appendix 2. Survey Questionnaire: Focus On Remittance Outflows ......Page 60 Appendix 3. Geographical Distribution of Responses to Survey of Central Banks ......Page 83 Table 2.1. Migrant Remittance Inflows Are Better Monitored than Outflows......Page 17 Table 2.2. Central Banks Are Starting to Record Transfers through New Remittance Technologies and Channels......Page 21 Figure 2.1. Data and Information Collected from Household and/or Overseas Migrant Surveys is the Top-Cited Method for Estimating Remittance Transfers through Informal Channels ......Page 19 Figure 2.2. There Is a Large Discrepancy between Remittance Data Reported in Surveys and Those Compiled from IMF Balance of Payments Statistics for Some Countries ......Page 20 Figure 2.4. High Cost Was Strongly Cited as the Top Factor Inhibiting Use of Formal Channels in Sub-Saharan Africa ......Page 25 Figure 2.5. Requiring MTOs to Partner with Banks to Receive Remittance Inflows Is Associated with Perception of High Costs ......Page 26 Figure 8. Better Statistics and Studies on Migration Was Cited by Nearly 80 Percent of Sub-Saharan African Respondents as Needing Attention for Improved Efficiency and Delivery of Remittances ......Page 28 Box 2.1. Data Collection Practices of Countries that are Both Remittance-sourc e and Remittance-receiving: Some Examples......Page 18