What Is The Significance Of Remittance To The Developing Countries?

Remittance to Nepal is defined as expatriates send money to Nepal from abroad, and it can generic term used to describe expatriates money from abroad. Remittances are Nepal’s primary source of foreign currency earnings. Remittances play a vital part in a country’s economic development.

As per Ratha (2015), the Nepalese economy is becoming more remittance dependent as money transfers to Nepal continue to rise. The rural population is now shifting to different occupations due to the low economic return from agriculture. Malaysia has the highest percentage of Nepalese seeking international jobs (30.1%), followed by Qatar (27.4%), Saudi Arabia (20.2%), the United Arab Emirates (13.1%), and other countries (9.2%). When remittances as a percentage of GDP are considered, Nepal is ranked fourth in the world but first in South Asia.

What Are The Main Advantages Of Remittance To Nepal?

Foreign employment and online money transfer to Nepal by workers are fundamental economic phenomena in Nepal, although the long-term viability of the Nepalese economy reliant on remittances is debatable. Despite the fact that the volume of remittances is increasing, the vast majority of it is used for consumption and loan repayment, with just a tiny percentage going to the productive sector.

Although the positive impact of remittances on poverty alleviation is generally documented, other non-monetary effects such as health, education, gender issues, politics, and social and cultural changes in society are less well understood. Even while the volume of remittances is increasing, investment has not increased, technology acquisition and distribution are insufficient, and brain drain is increasing by the day.

Why Is The Government Unable To Calculate The Exact Amount Of Remittance Received To The Country?

Nepal has a long history of international labour migration, dating back over 200 years.  Nepali migrant workers provide a significant amount of remittance inflows through legal channels, which has a favourable impact on GDP, per capita income, capital formation, education, and other factors. Because migrants adopt unlawful methods due to ignorance and the difficulty of receiving money through legal channels, the volume of remittance is substantially higher than previously recorded.

So, there is a need to provide a proper channel for expatriates to transfer money to Nepal. Expatriates send money to Nepal online is the most favourite channel for many expatriates, as an online payment system is fast, secure and hassle-free. During the lockdown, the online money transfer system has got a place in the general public. Most households prefer to send money to any corner of the world through online money transfer service providers.