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Tito Nícias Teixeira da Silva Filho
There has been a global push to decrease the cost of remittances since at least 2009, which has culminated with its inclusion in the Sustainable Development Goals in 2015. Despite this effort and the emergence of new business models, remittance costs have been decreasing very slowly, disproving predictions that sharp declines would be just around the corner. In addition, remitting to poorer countries remains very expensive. Oddly, this situation has not been able to elicit academic interest on the drivers of remittance costs. This paper delved deeply into the remittances ecosystem and found a very complex, heterogenous and unequal environment, one in which costs are driven by a myriad of factors and where there are no easy and quick solutions available, which explains the disappointing outcome so far. Nonetheless, it also shows that while policymakers have limited room to act they still have a very important role to play.
Tito Nícias Teixeira da Silva Filho

There has been a global push to decrease the cost of remittances since at least 2009, which has culminated with its inclusion in the Sustainable Development Goals in 2015. Despite this effort and the emergence of new business models, remittance costs have been decreasing very slowly, disproving predictions that sharp declines would be just around the corner. In addition, remitting to poorer countries remains very expensive. Oddly, this situation has not been able to elicit academic interest on the drivers of remittance costs. This paper delved deeply into the remittances ecosystem and found a very complex, heterogenous and unequal environment, one in which costs are driven by a myriad of factors and where there are no easy and quick solutions available, which explains the disappointing outcome so far. Nonetheless, it also shows that while policymakers have limited room to act they still have a very important role to play.

Tito Nícias Teixeira da Silva Filho

Copyright Page © 2021 International Monetary Fund WP/21/199 IMF Working Paper SPR No Easy Solution: A Smorgasbord of Factors Drive Remittance Costs Prepared by Tito Nicias Teixeira da Silva Filho 1 Authorized for distribution by Johannes Wiegand July 2021 IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate . The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF

Thorsten Beck, Mathilde Janfils, and Mr. Kangni R Kpodar

Examination Across 119 Country Corridors ”. World Bank Economic Review 25 , 105 – 131 Bersch , Julia , Jean Francois Clevy , Naseem Muhammad , Esther Pérez Ruiz , and Yorbol Yakhshilikov . 2021 . “ Fintech Potential for Remittance Transfers: A Central America Perspective ”, IMF Working Paper WP/21/175 Da Silva Filho , Tito Nicias Teixeira . 2021 . “ No Easy Solution: A Smorgasbord of Factors Drive Remittance Costs ”, IMF Working Paper WP/21/199 . Demirguc-Kunt , Asli and Harry Huizinga ( 1999 ). “ Determinants of

Thorsten Beck, Mathilde Janfils, and Mr. Kangni R Kpodar
This paper uses data across 365 corridors to document time and country variation in remittance fees and explore factors predicting variation in remittance fees. We document a general reduction in such fees over the past decade although the goal of fees below 3 percent has not been met yet in many corridors. We identify both cost- and risk-based constraints and market structure as barriers to lower remittance fees. Higher transaction costs as result of a more rural population in the sending country and lower scale are associated with higher remittance fees. However, lower risks due to the stability of fixed exchange rates and Internet rather than cash payment are associated with lower remittance fees. Finally, remittance corridors dominated by banks and few players are characterized by higher fees.