Remittance Needs and Opportunities in India
This report synthesizes findings from six studies on remittance and payment systems, commissioned by the NABARD-GIZ Rural Financial Institutions Programme (RFIP). The report offers conclusions and recommendations for improving and expanding existing formal remittance channels, designing innovative financial linkages, and developing new delivery models offering remittances services in rural and remote areas to low-income clients.
The study reveals that that there are up to 100 million circular migrant workers, who contribute as much as 10 percent to the national Gross Domestic Product. Circular migration has become a much needed livelihood strategy. Average annual remittance amount is about Rs 20,000, and even the poorest migrants send money home. Informal remittance channels are pervasive. Migrants value security and speed of money transfers. They see these attributes best met by banks, but continue to mainly use informal transfer methods. Recommendations include:
- Holistic approach and strategy that builds upon existing models and institutions with large outreach;
- Strong and effective steering structure, which includes all relevant stakeholders and follows a clear vision, mission and mandate;
- Development of models of inter-institutional money transfer for Regional Rural Banks and the Cooperative Credit Structure;
- Development of demand oriented remittance products.
