Nepali migrant workers in Malaysia sent home Rs 62.91 billion (1.99 billion ringgit) through formal channels in 2012. 

According to a report of the Malaysian Finance Ministry quoted by the local media, Nepal was among the top three recipients of workers’ wages last year.

 

The five countries whose workers in Malaysia had the highest earnings in 2012 were Bangladesh (3.032 billion ringgit), Indonesia (2.956 billion ringgit), Nepal (1.990 billion ringgit), India (625.1 million ringgit) and the Philippines (561.3 million ringgit).

 

An estimated 500,000 Nepalis are employed in Malaysia in production, construction, agriculture and service sectors, and they are also preferred as security guards. The media reported that there were 2.1 million registered foreign workers in Malaysia.

 

Meanwhile, the number of remittance service providers is also growing in Malaysia, which has helped to transfer funds to Nepal through formal or legal channels, said Shiva Subedi, manager of Malaysia-based International Money Express (IME). “Increased awareness among Nepalis working here that sending money through legal channels is more secure has helped increased the volume.” Likewise, a stronger US dollar has also meant a growth in remittance from Malaysia.

 

IME maintains 69 branches in Malaysia. Around a dozen other remittance companies including Prabhu Money Transfer are operating in Malaysia. However, the volume of money being transferred through the informal sector is still high, said Subedi.

 

Malaysian Deputy Finance Minister Datuk Ahmad Maslan stated that remittance by legal foreign workers doubled from 10 billion ringgit in 2009 to almost 20 billion ringgit last year, media reports said. Malaysia has allowed money changers to conduct remittance services since 2011. Remittance accounts for one-fourth of Nepal’s Gross Domestic Product or two-thirds of the balance of payments. The money sent back by Nepali migrant workers abroad in the fiscal year 2012-13 amounted to Rs 434 billion.

 

According to Nepal Rastra Bank (NRB), a huge amount of remittance still comes to Nepal through the informal sector. For example, Korea is a big remittance generating country, but its contribution to the total remittance inflow is a mere 0.02 per cent. Likewise, NRB has said that remittance from Australia and the UK is very nominal.