BANKING SYSTEM
Global Remittances- Vital part of the economy of developing countries
by Souren Hayriyan President & CEO Unistream Commercial Bank
M
oney sent home by migrants constitutes three times the size of international aid and they provide an important lifeline for millions of poor households. With more than 3% of the world’s population (215 million people) living outside their country of birth, remittances contribute to economic growth and to the livelihoods of people worldwide. Moreover, remittance transfers can also promote access to financial services for the sender and recipient, thereby increasing financial and social inclusion. Remittances also foster, in the receiving countries, a further economic dependence on the global economy instead of building sustainable, local economies. Remittances are playing an increasingly large role in the economies of many countries, contributing to economic growth and to the livelihoods of less prosperous people (though generally not the poorest of the poor). According to World Bank, remittances totalled US$414 billion in 2009, of which US$316 billion went to developing countries that involved 192 million migrant workers. As per the latest update, remittances to de-
veloping countries are estimated to reach US$372 billion in 2011, an increase of 12.1% over 2010. With the exception of Middle East and North Africa, the growth rate of remittances was higher in all regions in 2011 than in 2010. The new estimates show that the top recipients of remittances among developing countries in 2011 were India ($58 billion), followed by China ($57 billion), Mexico ($24 billion), and the Philippines ($23 billion). Other large recipients included Pakistan, Bangladesh, Nigeria, Vietnam, Egypt and Lebanon. For some individual recipient countries, remittances can be as high as a third of their GDP. As remittance receivers often have a higher propensity to own a bank account, remittances promote access to financial services for the sender and recipient, an essential aspect of leveraging remittances to promote economic development. The top recipients in terms of the share of remittances in GDP in 2010 included many smaller economies such as Tajikistan (31%), Lesotho (29%), Moldova (23%), and Samoa (23%). Nevertheless, the current global economic slowdown, remittance flows are expected to continue growing, with global remittances expected to exceed $593 billion by 2014, of which $441 billion will flow to developing countries.
port) that contributes close to 11% of GDP, therefore the country is one of the key markets for Unistream Bank in the near future. With majority of Albanian Diaspora in Europe, Unistream plans to target Italy, Greece, Germany and UK where the immigrants can use Unistream network to send money back home to Albania. As a rapidly developing remittance service provider, Unistream with headquarters in Moscow features solid positions particularly in UK, Germany, Greece and Cyprus where the system continues to make fast progress developing its own networks via affiliated companies. We believe that presently the time has come for Albanian financial institutions to partner with an international remittances operator that offers the business new opportunities in: - widening its range of products by adding the services and thus becoming more and more desirable across the globe. - significantly increasing its client portfolio. - working the system that feature convenient, logical and affordable rates, and is very flexible when it comes to discussing the partner share in joint commission. - significantly increasing level of its international activity and promote their brand internationally.
Opportunity in Albania:
One of the key players in the global remittance arena, UNISTREAM COMMERCIAL BANK (JSC) is exploring all possibilities to have strategic tie-ups with large network banks in Albania to facilitate delivery of remittances sent by Albanian immigrants overseas. The annual inflow of remittance in Albania is close to US$1.2 billion (as per World Bank re-
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