Lower remittance fees to improve the quality of education in developing countries, says UN
According to the United Nations Educational, Scientific and Cultural Organisation (UNSECO) , decreasing fees that migrant workers pay to send home could create an extra $1 billion to be spent on education.
A recent report from UNESCO highlighted that in some countries, the charges to send money home were too high.
Manos Antoninis, Director of the UNESCO report stated:
“Some remittance corridors in Africa carry fees of over 20 percent. The fact people are still prepared to transmit money even through these tunnels means there is a desperation and a need for such funding to be used by families in the poorest countries.”
Remittances are a crucial source of income for many households in Asia, Latin America and Africa, and can provide a source of financial stability.
In 2017, USD $613 billion was sent from migrant workers in higher income countries to middle and low income countries. In countries such as Liberia, Kyrgyzstan and Nepal, the remittance money makes up more than a quarter of the national Gross Domestic Product (GDP).
As part of the Sustainable Development Goals (SDGs), world leaders are committed to decreasing the cost of remittances by 3 percent. This target could potentially lead to $1 billion extra cash to be spent on families and could save migrants more than $25 billion yearly.
Traditional banks have average fees greater than 10 percent, while costs to send money to areas of Sub-Saharan Africa average approximately 9 percent.
There has been a call for increased competition and further regulation in the markets to guarantee that costs are transparent and migrants have cost-effective options.
Dylan Riddle, Spokesman, The Institute of International Finance commented:
“More people than ever before benefit from access to the global financial system. In order to serve the remaining underserved population – nearly 2 billion people around the world – we'll need banks, policymakers and NGOs to work together to eliminate existing obstacles and explore new solutions.”
The AIDF Global Summit will return to Washington in 2019.
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