A report by the World Bank has suggested that remittance flows to the developing world will rise to USD406bn this year, an increase of 6.5% from 2011.
Despite growth in the overall remittance flows to developing countries, regions such as Europe, Central Asia and Sub-Saharan Africa have been particularly affected by the continuing global economic crisis. However, South Asia, the Middle East and North Africa are expected to fare much better than previously estimated.
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India, with USD70bn, had the highest number of officially recorded remittances in 2012. The second largest was China, with USD66bn, followed by the Philippines and Mexico, both with USD24bn. Other large recipients included Nigeria, Egypt, Pakistan, Bangladesh, Vietnam and Lebanon.
According to the World Bank, one obstacle to the growth of remittance flows is the increasing cost of sending money, which averaged 7.5% in the third quarter of 2012 in the top 20 bilateral remittance corridors.
The report also noted that the promise of mobile remittances is yet to be fulfilled, despite the increased use of mobile phones throughout the developing world. The World Bank believes that mobile remittances fall in the regulatory void between financial and telecom regulations, as many central banks have barred non-bank entities from conducting financial services.
The rise is slightly above what The World Bank forecast in its last report, which stated that overall remittance flows to the developing world would rise to USD399bn in 2012.
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