A key source of external advancement finance is the workers’ remittances. It has successfully provided a comfortable angle from which the difficult migration agenda can be approached.

However, communities affected in developing countries will have to think of the best way to regulate issues such as;

Finding the best way to regulate the flow of remittances

And improve research surrounding remittances

The remittances transaction that is documented from developing countries roughly passed $93 billion back in 2003. The initial size of remittances from both the documented and undocumented transfers is said to be bigger.

Currently, remittances are bigger than the net official flow size and come second place when placed next to foreign direct investments. The remittances of both private and public capital flows are roughly 36 out of 153 countries that are developing.

Remittances are balanced and may be countercyclical during economic hard times. They are peer to peer flow and meet the needs of the recipients that financially dependent on these funds. They can be humanitarian transfers that do not need to be paid back.

Financial Infrastructure

The remittance fees are high. The average percentage of the fees ranges from 13 to 20 percent. The money transfer agents cause a deep drain on the hard to come by remittances. It affects the people that are poor.

A five percent reduction in remittance fees would increase remittance flow for developing countries annually. There are obstacles to competition and possibly forgery of efforts in the payment system. This issue can be fixed if policy coordination is involved in not only source but also the destination countries. Enhancing access to financial services such as we are building can lower the costs and also aid in monetary advancement in the receiving countries.

Remittance Flow Regulation

It is vital to strike stability between a governing regime that reduces the laundering of money and financing terrorists and a regime that quickens the in-flux of funds between sturdy working migrants and their families.

If the formal remittance Infrastructure is strengthened by providing reduced cost, senders and the receiver countries will back migrants with easy access to financial services.

Development Impact

Individuals have been known to argue that remittances have the prospects of increasing inequality since it is mostly the more privileged individuals that are able to migrate and send remittances. Remittances’ impacts will rely on its usage. However, on a brighter note, people believe that remittances would rather decrease poverty. Since cases exist where less privileged people migrate to send remittances to their families back home.

Available Data Improvement

While the undocumented data are big and vague, the documented data are not complete. Countries like Denmark and Canada do not report remittance data. To enhance data on remittances, it will require lots of efforts and more transparency that can be achieved with blockchain solutions.

The effort will need to scrutinize the remittance flow and migration stock relationship and how remittances react to transformations in both source and destination economies.

Fiscal Incentives

A large number of developing countries provide tax Incentives for the sake of attracting remittances. Through this, remittance will be utilized for evasion of tax and possible laundering of money or diversion of budgetary resources meant for projects.

This diversion is usually not like by non-residential national. However, some aid agencies are utilizing hometown associations to channel help. The hometown associations can be used to provide funding for the priority of communities.

Conclusion

The prospect of utilizing remittances for development is a large one. While there is progress in the knowledge of remittance, the aforementioned limitations signify how the prospective impact is decreased.

Nevertheless, the policymakers will require more study on how best to utilize remittances to contribute to the home of migrants and their countries.

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