As per the UN International Migration Report, 2017 an international migrant is defined as a person who is living in a country other than his or her country of birth. To this effect, Place of Birth is used to determine nativity and in its absence Place of Citizenship is considered. The definition of a migrant as contained in the UNIMR is broad, in the sense that it includes refugees as well, who may or may not be in a position to engage in meaningful employment. Nonetheless, migrants contribute to the economy of the host country in several ways:
• Human Capital
• Labour Capital
• Tax Base
• Job Creation
• Cultural Diversity
Migrants from developing countries often remit funds which constitute a significant source of household income for their families or relatives back home. Said funds are utilized by the families and communities towards their livelihood, education, health, sanitation, housing and infrastructure, thus directly impacting their standard and quality of living.
According to the UNIMR 2017, India was the country of origin of the largest number of international migrants, approximately 17 million. The World Bank on April 23, 2018, in its latest Migration and Development Brief observed that India leads the way in accepting remittances from abroad which have been to the tune of USD 70 Billion. The figures world over have shown an upward trend which is mainly backed by strong economic conditions in the advanced economies and the same is expected to continue in the near future.
Remittance costs remain a major concern for stakeholders due to the high processing tariff which banks charge to mitigate risk couple with long term partnerships between institutions and transfer channels. With growing remittances, there’s a need to reduce the overheads and enable families to receive more of the money that is being sent. While policy-makers must ensure healthy competition among institutions handling these funds, entrepreneurs must come together to implement efficient and low-cost technology solutions into the transfer channels.
This presents a novel challenge to the technology experts and that’s reason enough to keep an eye out for some for disruptive innovations in the FinTech domain in India.