High cost of transferring remittances

Thur April 17, 2014

EDITOR: It is widely known that the St Vincent and the Grenadines diaspora in North America, the United Kingdom, and other parts of the world, contributes significantly to the economy in their homeland, since constant remittances are sent to their relatives who live in the multi-island state.{{more}}

Guyanese and members of the diaspora in other Caribbean states do likewise, but it costs them far too much. In other words, a relatively large slice is being taken out in the transfer process, so much so that the World Bank has expressed concern about the exorbitant cost of sending remittances to the Caribbean.

The World Bank, in a statement, expressed grave concern, stating that the exercise is forcing migrant workers to pay as much as $50 to send $200 to support their families. The release added that $200 is a significant amount for migrants to send to their families. The statement added: “There was little price transparency and no global effort to address this problem until the World Bank helped from a coalition to monitor the process and create a ‘one stop shop’ information,” the statement added.

“The high cost of transferring remittances internationally has typically been caused by a combination of obstacles in each a local market both in sending and receiving countries,” the World Bank statement added and referred to the lack of transparency protection, legal and regulatory obstacles, a lack of payment system infrastructures and access to payment system; a weak market environment without a proper competition and weak risk management and governance practices.

Western Union, Money Gram and other agencies do brisk business from the Caribbean diaspora.

Besides financial remittances the diaspora plays an important role in sending crates, barrels laden with foodstuff and other forms of assistance to schools, church groups and other organizations. This is more evident in times of national disaster.

Oscar Ramjeet