Foreign Remittances Grow to $1.5 Billion

A Cambodian migrant worker in a Bangkok construction site. A big slice of their income is sent back home as remittances for their families. Reuters

Foreign remittances from migrant workers and Cambodian businessmen based overseas are expected to grow to over $1.5 billion this year, according to Acleda bank.

So Phonnary, executive vice president of Acleda, told Khmer Times yesterday that this year the bank had been recording an average of 12,600 transactions per month of money coming in from overseas.

“These transactions are about $129 million a month,” she said.

Ms. Phonnary said the money transferred from overseas to Cambodia were mainly from migrant workers and businessmen.

“Cambodian migrant workers and businessmen based overseas send money home using Acleda’s SWIFT system and also through Western Union. Migrant workers, though, prefer Western Union because it is fast,” she said.

Ms. Phonnary pointed out that the foreign remittances were mostly from Thailand, Malaysia, South Korea, the US, France and Canada.
 

“For those who are sending home money using Acleda bank’s SWIFT system, we will charge them a commission fee of 0.17 percent of the amount transferred,” she said.

Ms. Phonnary said Acleda is trying to encourage its customers who work overseas – especially Cambodian businessmen – to use internet banking to send money home.

“This is faster and much more convenient. They don’t have to line up at banks and can transfer money any time,” she said.

The increased need for low-skilled workers in countries such as Thailand and Malaysia and the relatively high wages there are pull factors for many Cambodians – who are unemployed or underemployed in the country.

“A big slice of their hard-earned income is sent back to their home country as remittances for family, while some is saved for contingency in the host country. The remittances, which directly benefit individual households, are widely acknowledged as a major and stable source of external finance for developing countries,” said the International Labor Organization (ILO) in a recent report.

“Migrant workers’ remittances have the potential to spur economic development in the poor migrant-sending communities of such countries,” added the report.

The ILO report also highlighted the importance of migrant workers having access to financial services, such as money transfer intermediaries, that are affordable and safe.

The growth of the foreign remittances market is also attracting local mobile payment companies, which seem to be gearing up to extend their payment services overseas.

One of them is TrueMoney, a subsidiary of True Corporation in Thailand, which is moving to expand into international mobile payment services through money transfers – targeting migrant workers working in the country.

“We will start our cross-border money transfer operations in 2017 that will enable Cambodian migrant workers in Thailand to send money home,” Se Sokpheakreak, marketing manager of TrueMoney in Cambodia, told Khmer Times.

Mr. Sokpheakreak said TrueMoney aims to attract those unbanked migrant workers in Thailand to help them send remittances to their families and pay lower fees than the existing informal means.

KHMER TIMES
SOK CHAN