Gulf-South Asia has emerged as the most economic remittance corridor in the global remittance flow through formal channels.The average cost to send money to South Asia from Gulf region is about 6.54 per cent‚ according to the World Bank’s data — Remittance Price Worldwide.

However‚ the global average is about 8.96 per cent. The average cost was calculated in September 2012‚ on the basis of remitting cost for $200. 

According to the data‚ sending remittance from Saudi Arabia to Nepal is about 4.32 per cent and to India it is nearly 4.40 per cent. The cheapest corridor in Gulf-South Asia is Saudi Arabia and Pakistan where just 2.82 per cent service fee is applicable. 

Similarly‚ remitting from the United Arab Emirates to Pakistan is around 4.92 per cent‚ followed by India (5.02 per cent) and Sri Lanka (6.35 per cent). 

Outside the South Asia region‚ the remitting cost from Gulf countries is more than 11.89 per cent except to Yemen‚ Egypt and Jordan. 

The cost of sending money to South Asia from Gulf countries is decreasing every year following competition among banks and remittance companies. Pakistan and Sri Lanka are among the top five low-cost remittance receiving countries from Saudi Arabia and the United Arab Emirates‚ respectively. 

Remitting cost for Nepal is below eight per cent from all Gulf countries. However‚ the rate varies with each bank and money transfer company. 

MoneyGram has been charging Saudi Riyal 35.35 ($9.42) for sending $200 to Nepal‚ while Saudi American Bank has been charging a service fee of Saudi Riyal 28.54 ($7.60). They transfer the money in less than an hour. 

The UAE Exchange has been charging the least. It charges Emirati Dirham 15.47 ($4.21) to send $200 to Nepal. MoneyGram charges Emirati Dirham 22.35 ($6.08). UAE Exchange transfers money in three-five days‚ while MoneyGram takes just an hour. 

Remittance from Gulf countries to Nepal shares about 75 per cent stake‚ followed by North America (13 per cent)‚ Europe (10 per cent) and Oceania (two per cent)‚ according to Migration Policy Institute’s report for 2011. 

The Gulf‚ Europe and North America share 95 per cent‚ three per cent and one per cent migrant Nepalis‚ respectively. 

The higher charging corridors are South Africa to Zimbabwe where $47.87 is charged to remit $200‚ followed by Ghana to Nigeria ($44.56)‚ and South Africa to Malawi ($43.17). 

Remitting cost within Africa is about 11.89 per cent. 

The World Bank hopes that remitting cost will be down by five per cent in 2014.

Published on: 1 February 2013 | The Himalayan Times