Mon, 20 Jan 2014 by RemitGuru

Many researchers believe that the practice of sending remittances helps the economies of the 'receiving' nations. Those nations, which receive the remittances, benefit because of these remittances. Such researchers deem that steady remittance flows can be a dependable financial resource for developing nations, especially in recessionary times and in times of economic stagnation. As per such researchers, remittance receivers often have a higher inclination to open a bank account. Remittances, thus, encourage access to financial services for the sender and the beneficiary. In this way, remittances can be used to promote economic development and make more and more individuals an integral part of the banking system. It has been observed that remittances are often despatched by those migrant workers, who travel back and forth between their home and host nations in a cyclic manner. These migrant workers have the advantage of working in a high-income foreign nation. These migrant workers remit their earnings to their native nations respectively, which are relatively low-income nations. Thus, the migrant workers benefit financially. Some economic experts consider that only those nations, with diversified migration arenas, are likely to have more sustainable remittance inflows. If workers of one nation migrate to only one other nation for working there and subsequently send remittances to their home nation, that home nation may not have a sustainable remittance inflow over a period of time. These economists also voice that, as per a macroeconomic standpoint, remittances can bolster aggregate demand and GDP as well as increase economic growth. Nonetheless, other economic researchers express that remittances may also have problematic macroeconomic effects as they may heighten economic inequality and decrease labour supply among recipients. One thing is pretty clear. Whether or not remittances benefit the economy, online remittance service and other ways of remittance are here to stay as the world becomes interconnected financially in the era of globalisation.

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