A COMPLETE GUIDE TO UNDERSTAND WHAT IS A REMITTANCE!

In many aspects of life, the world is becoming more global. Developments such as the emergence of the internet and expansion modes of transport and communication have changed the global landscape in such a way that, for example, one can easily pay for an item or service that is miles away. Communications and access to information in the contemporary world are so advanced that it only takes a matter of seconds to reach any part of the world with a message or an action, and such is also the ability to send money across distances that go beyond international boundaries.

To illustrate, it is no surprise that the trends in international money transfers have shifted coherently in positive magnitude in the recent past. There are several other reasons for this, economic migration being one of them. An increasing proportion of the population is residing and working overseas, some of which is a greater percentage sending money back to their countries. The transfer- pursuing this function is called Remittance. In this paper, we would like to focus on the definition of remittances, its significance in the economy and how remittances are sent.

Defining the word “remittance”:

Money that is transferred from one party to another, most often though not exclusively to another country, is called a remittance. Remittance is derived from the word remit which means to send money to someone. Most definitions of remit define it as the sending of money as payment for a debt, bill, or draft, so in common parlance, a remittance may be understood as any payment against an invoice raised.

To refine this description, remittance is nowadays often understood as the money a migrant worker sends to their family back home. Thus, the migrant worker is referred to as the remittance sender, while a family member in their native country is regarded as the remittance recipient. Such money transfers may also be called as workers’ remittances or migrant remittances.

What remittance includes:

Instilling a discipline of returning home by sending money to relatives whilst working abroad through internal migrations, for instance, by transferring money to settle rents and other cost commitments.

The use of postal mail to send cheques for outstanding bills and invoices in one’s home country.

Sending an emergency amount on a prepaid extraction card of one’s relation for use in a different country.

Settling bills in the residents’ country for the work or supply of provisions done in other countries.

What is the purpose of remittances?

Most workers cross borders in search of better economic opportunities. Such economic migrants, who are mostly the breadwinners in their families, send home a proportion of their wages either in cash or in kind. These remittances are very significant in the economies of smaller and less developed nations. The International Monetary Fund (IMF) states: “For a number of countries, the transfer of money by its citizens employed abroad is literally a development shaft.” Remittance inflow represents, in fact, one of the highest income generation avenues for citizens of low-income and developing countries.

In many nations where an ocean or any distance separates families and whose members work abroad, remittance-receiving members often have to work hard. That’s why every year on June 16, there’s an International Day of Family Remittances to appreciate and recognize the hard work of these people. The United Nations also states that there are 200 million migrant workers who starve only to feed 800 million family members in the global household-sending remittance economy. The remittances they send during their work abroad are useful for some reasons:

In most countries, the amount of money remitted by individuals almost always exceeds the amount of direct investment and international development aid.

Furthermore, remittances tend to be more broadly spread within developing economies than channeled capital inflows are.

However, contrary to private capital inflows, which usually reduce, remittances are resilient, increasing during economic recessions or post-natural calamity scenarios.

How do I send a remittance?

Should the need arise to make a payment remittance? There are various means to send it, such as:

• Wire transfer/bank transfer
• Cash Pickup
• Mobile Money
• Home Delivery

The payment that you will make varies with the provider and also the service which you choose.

Conclusion:

The money you send to your loved ones from abroad is called remittance. There may be various reasons why you are sending your money, but how you are sending it is crucial. Many traditional service providers claim to be hustlers, but now people are moving towards speedier online providers like Speed Remit since they provide cheap, fast, and secure transactions of your valued money.