Support for the relatives

Money transfers from family members abroad are an important economic factor in developing countries. Digital solutions now reduce the costs and make the transfers easier.

Each month, Lusine Shahramanyan transfers part of her salary from Germany to her family in Armenia, where her two daughters live with their grandparents. She sends 900 euros to pay for their living costs and a home loan. 

These kinds of transfers are very important, as they allow recipients back home to cover a large part of their living costs. And they add up to a lot of money. According to estimates by the World Bank, migrants transferred 529 billion US dollars to their families in developing countries in 2018 – more than three times the amount of public funds that were assigned to these countries for development cooperation.

The United Nations proclaimed 16 June as the International Day of Family Remittances. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is running several projects that aim to maximise the benefits of private transfers to developing countries. 

Foreign remittances are often expensive. For example, Lusine Shahramanyan pays a money transfer company more than 20 euros for each transfer. With the price comparison website www.geldtransfair.de/en, those sending money can find the cheapest and quickest solution for transferring money to their home country. The free portal has around 3,000 users every month and is operated by the Centre for International Migration and Development (CIM) on behalf of the German Federal Ministry for Economic Cooperation and Development.

In Jordan, GIZ has been accompanying the introduction of JoMoPay (Jordan Mobile Payment) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The system enables users to transfer money or pay bills via a smartphone app. GIZ supports the start-up DINARAK, which has launched a financial app with now around 85,000 users. The app is also useful for Syrian refugees, as it is almost impossible for them to open a bank account in Jordan. GIZ is also currently advising the Jordanian Central Bank to build a framework that in the near feature will allow cross-border transfers via smartphone, which would further facilitate money transfers between families located in different countries.

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