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Remittance experts stress proper channels
KATHMANDU, JUN 19 -
Although the use of formal channels of remittance is growing gradually, about 34 percent remittance is being brought in through informal channels such as the Hundi system. Nepal Remit Association, a body of money transfer companies, said remittance companies were bringing in 44 percent of the total remittance, while banks and financial institutions are bringing in 22 percent.
As many as 52 remittance companies have been permitted to remit money. About 30 percent of the families are dependent on remittance for their livelihood.
Chandra Prasad Dhakal, president of the association, said the government must give priority to remitting money through formal channels which will ultimately help address the liquidity crisis in the banking system as well as the balance of payment deficit. The country is facing a deficit of Rs. 22 billion in the BoP.
Experts and stakeholders on Friday told an interaction jointly organised by Nepal Remit Association and Society of Economic Journalists Nepal (SEJON) that the government should create an environment conducive to promoting foreign employment given the declining rate of remittance.
Remittance has declined to a mere 9.6 percent in contrast with 60 percent last year. Remittance was Rs. 164 billion in the last nine months of the current fiscal year.
“If the falling trend of remittance is not checked, the economy may face severe problems,” the experts warned.
An estaimted 2.5 million Nepali people have gone for foreign employment in 108 countries.
Giving an instance of Pakistan, Dhakal said, “The government should make a provision to refund service charge to remittance companies who are contributing in bringing in significant amount of foreign currency to the country.”
Krishna Hari Baskota, revenue secretary at the Finance Ministry, stressed the need for enhancing skills of Nepali migrant workers so that they could earn more and send home more money.
Economist Chiranjivi Nepal said the economy will not grow well without the contribution of remittance.
Foreign Employment Entrepreneurs urged the government to solve passport-related problems and ensure proper environment for sending women migrant workers for foreign employment.
Posted on: 2010-06-20 08:51
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