Bangladeshi expatriates send money to Bangladesh is increasing each day. As a result, Bangladesh’s economy is seeing a steady increase in remittance inflows, which corresponds to the rising international demand for its labor. The subsequent development impacts of remittances as a mechanism of money transfer on socio-economic parameters are becoming increasingly important. Remittances have aided recipient households in improving social and economic indices such as nutrition, living conditions, housing, education, health care, poverty reduction, social security, and investment activities. Along with their contribution to GDP, the proportional weight of remittances has increased against most macroeconomic factors.
How Significant Is The Importance Of Remittance To A Lower Middle Developing Country Like Bangladesh?
Money transfers to Bangladesh are the second greatest source of foreign currency earnings for Bangladeshi economies, after readymade garments (RMG). Thus, the remittances sent by Bangladeshi migrants contribute significantly to the country’s overall economic development. The following are five key advantages of remittances to Bangladesh:
- Many families have been lifted out of poverty as a result of this direct and beneficial association with poverty reduction.
- Remittances are a source of income for entire households, giving them the ability to purchase goods. As a result, the consumption of necessary items and the standard of living will rise.
- Long-term benefits can be observed in healthcare and education and a rise in small company start-ups.
- In moments of despair, help is available. For example, expatriates’ online money transfer to Bangladesh has aided the country’s citizens in rebuilding their lives during lengthy political and civil upheaval and various natural disasters.
- Increasing the amount of money in the bank’s foreign exchange reserves. The country’s foreign reserve was $31 billion in January 2019.
What Are The Preferred Ways To Send Money To Home By Bangladeshi Diaspora?
In the past, the “Hundi,” an informal money-transfer system, was particularly popular among Bangladeshi migrants. The Wage Earners’ Scheme was established in 1974 to encourage people to use formal channels such as demand draughts, traveler’s checks, telegraphic transfers, postal orders, direct transfers, and ATMs.
The system quickly gained popularity among Bangladeshis working overseas, and their remittances have increased dramatically over time. Bangladesh joined the ten-billion-dollar club of remittance inflows in 2010. The Bangladeshi government has been working closely with various source countries to penalize establishments that enable informal channels in order to enhance the formal infrastructure, i.e. send money to Bangladesh online.