Search Results

You are looking at 1 - 10 of 66 items for :

  • "remittances corridor" x
Clear All
Raúl Hernández-Coss

In recent years, as remittance flows and funds transfer systems have become increasingly important for international policymakers, the broad concepts of remittance phenomena have become well documented. This essay compares the key features of two remittance corridors, identifying two distinct stages for inducing a comprehensive shift from informal to formal channels. The main source of analytical information is work conducted by the World Bank in support of the Asia-Pacific Economic Cooperation (APEC) Remittance Initiative. Additional research could explore in

Julia Bersch, Jean François Clevy, Naseem Muhammad, Mrs. Esther Perez Ruiz, and Mr. Yorbol Yakhshilikov
This paper analyzes the potential for fintech to facilitate cheaper and more efficient remittances, and to enhance financial inclusion in Central America. Digital remittances remain nascent in the region, primarily reflecting behavioral inertia, small cost advantages of digital over traditional channels, and inadequate financial literacy. Through expanded alliances between traditional and fintech operators, digital remittances can further reduce transaction costs and reach those remote, low-income households in a timely and secure manner. A meaningful expansion of fintech remittances necessitates an enabling regulatory environment for digital financial services, and KYC and AML/CFT requirements proportionate to the value of transfers.
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.
Thorsten Beck, Mathilde Janfils, and Mr. Kangni R Kpodar

objective to “by 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent” (SDG 10.C). But what drives remittance costs? To which extent can policy help lower these costs? And has the world made progress towards this goal? Costs of financial services have been at the core of the academic and policy debate for decades. Philippon (2015) and Bazot (2018) show little movement in financial sector costs across advanced countries over past decades. Beck, Demirguc-Kunt and Martinez

Aleksandra Babii, Ms. Alina Carare, Dmitry Vasilyev, and Mr. Yorbol Yakhshilikov
Traditional models relying on standard variables like the U.S. Hispanic unemployment rate fared well in explaining remittances to CAPDR and Mexico during the pre-pandemic period. However, they fail to predict the sustained growth in remittances since June 2020, including the significant increase in the average amount remitted. Using data from over 300 remittances corridors (from 23 U.S. states to 14 Salvadoran departments), we find that this increase is primarily explained by the dynamics of U.S. states real wages, as well as more temporary factors like U.S. unemployment relief (including the extraordinary pandemic support), U.S. states mobility, and COVID-19 infections at home. The paper also analyses what role the change in the modes of transmission of remittances, additional U.S. fiscal stimulus and U.S. labor market developments, especially in the sectors were CAPDR and Mexican migrants preponderantly work, play in explaining aggregate remittances growth.