Southern Asia region

asia-pacific-region
OVERVIEW
  • Southern Asia is a predominantly remittance-receiving subregion that contains nine countries, including some of the largest recipients in the world (India, Pakistan and Bangladesh).
  • Four countries rely on remittances for more than 6 per cent of their GDP (Nepal, 31%; Sri Lanka, 9%; Pakistan, 7%; and Bangladesh, 6%).
Predominantly receiving countries
Predominantly sending countries
KEY FIGURES
Migration Sources: UNDESA 2017
  • In 2017 there were 40 million emigrants from Southern Asia, growing at a compounded annual rate of 2.2 per cent since 2010.
  • The majority of the migrants have moved to the Gulf States, Europe and North America.
  • The geographically close Gulf States of Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman and Bahrain, with their dynamic labour markets, act as a pull factor attracting migrant workers originating from the subregion.
Immigrants to Southern Asia 2010 2017 CAGR1 2010-2017(%)
Total 14,307,646 13,582,402 -0.7
From all Asia and the Pacific 13,294,176 12,538,748 -0.8
Emigrants from Southern Asia 2010 2017 CAGR 2010-2017 (%)
Total 33,959,786 39,575,424 2.2
To all Asia and the Pacific 26,775,528 30,005,371 2.2
Remittances (millions of US$) Sources: WB, Remittances bilateral matrix 2016
Inbound Remittances
  • The region received US$118 billion in remittances in 2017.
  • India, Pakistan, Bangladesh, Sri Lanka and Nepal received the most.
  • Most of the funds are received from Gulf States, Europe and North America.
  • Only about 15 per cent originated in Asia and the Pacific.
Outbound Remittances
  • The subregion sent nearly US$14 billion in 2017, of which 98 per cent was sent to Asia and the Pacific.
  • The sending markets in Southern Asia are characterized by flows between neighboring countries, for example India to Nepal or Bangladesh.
Inflows to Southern Asia (US$ million) 2014 2017 CAGR 2014-2017 (%)
Largest inflows > US$ billion
Main receive countries from the sub-region
Outflows from Southern Asia (US$ million) 2014 2017 CAGR 2014-2017 (%)
Largest outflows > US$ billion
Main receive countries from the sub-region
Inflows origin
Outflows destination
Remittance reliant countries with remittance/GDP > 3% (2016)
COMPETITION IN THE MARKET
Costs Sources: WB RPW Q1 2018
Receiving
  • Costs to send to Southern Asia have remained stable since 2015 and in the first quarter of 2018 stood at 5.5 per cent.
  • This is significantly lower than the global average of 7.1 per cent, but still 2.5 per cent higher than the SDG 10.c target.
  • Prices vary from 8.6 per cent to send to Afghanistan to 4.2 per cent to send to Bangladesh.
  • While most markets are highly competitive, there are some infrastructural challenges in markets such as Afghanistan that make it difficult to achieve lower prices.
Sending
NA
Costs to receive US$200 (% of amount sent)
Costs to send $200
NA
Market operators Sources: RemitScope survey 2018
  • Most of the money that is sent to Southern Asia is handled by MTOs on the sending side.
  • Transactions from the Gulf are dominated by locally based licensed exchange houses, such as UAE Exchange, Al Fardan and others, with larger global operators (such as Western Union, MoneyGram and Ria) having a small share.
  • Some banks, such as Dubai Islamic Bank, also offer services from the United Arab Emirates to southern India.
  • In Europe and North America, a range of providers are now sending to these markets, including large global MTOs, banks from the receiving countries, such as ICICI, and fintechs such as Transferwise, Xoom, Remitly and WorldRemit.
  • On the payout side, most markets have traditionally relied on banks and post offices to be able to disburse funds as agents of global MTOs.
Presence at the receiving end
Global MTO Number of countries where these companies are present (among the 9 Central Asia countries)
Regional MTO Number of countries where these companies are present (among the 9 Central Asia countries)
Main types of RSP
Receiving end
Sending end

Legend

Dominant Significant Emerging Marginal and/or not applicable
Transfer methods
  • Cash is still the dominant means of paying out remittances.
  • Bank account crediting is significant and growing in markets such as India and Pakistan, where governments are promoting cash-lite economies.
  • Mobile money is increasingly utilized in Afghanistan, Pakistan and Sri Lanka, among other countries. These digital services are offered by companies such as EasyPaisa and JazzCash in Pakistan and bKash in Bangladesh.
Cash
Bank
Digital
Blockchain

Legend

Dominant Significant Emerging Marginal and/or not applicable
REGULATORY ENVIRONMENT
  • Regulators have adopted a proactive stance towards remittances in general and allow banks and MTOs throughout the region.
  • The use of agents is also generally permitted.
  • While there has been discussion and excitement about digital currency and blockchain in Southern Asia, regulators have been more prudent and are currently defining their positions. Five jurisdictions approve the use of digital currencies.
Types of entities allowed to distributed remittances Sources: RemitScope survey 2018
Number of countries
Incidence of de-risking policies affecting remittance service providers
Low   Average   High  
INCLUSIVE FINANCIAL SERVICESSources: Findex survey 2014 (Pacific region countries not available)
  • The current sub-regional average is 54 per cent of adults having an account. This is just under the average for the whole region.
  • While close to one out of five adults receives domestic remittances, only less than one third of recipients use accounts to receive remittances despite the uptake of mobile money in several countries of the sub-region.
  • Some governments have recognized the importance of remittances and introduced a number of coordinated measures to harness them. Two good examples are the Pakistan Remittances Initiative and the efforts of the Government of Bangladesh to reduce the levels of informality.
Account ownership among the adult population +15 year old (%) Sources: Findex survey 2017 (Pacific region countries not available)
Adult population receiving domestic remittances and patterns to receive money
Average adult population receiving domestic remittances (%) 16
In person and in cash (%) 40  
Over the counter(%) 17  
Through a financial institution (%) 32  
1 Compound Annual Growth Rate (CAGR)