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Eurogiro News

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Migrant remittances delivered through postal

networks in Asia feature impressive growth rates

A recent landmark publication of the International Fund for Agricultural Development (IFAD) and World Bank

highlighted the fact that post offices are now the second-most used channel in Asia for remittances

It is estimated that the market share is

around 4% of the total flow of US$ 260

billion, whilst the volume of remittance

transactions is over 50 million per year.

With over 350,000 post offices in Asia,

and more than 200,000 offices located

in rural areas, the postal networks play

a valuable and vital role in rural outreach.

The growth in the remittance business

leads the way in the transformation of

several postal operators and, in some

cases, revenues from international remit-

tances are already higher than from

traditional letter mailing services.

Different business models for remittances

are emerging. In particular, strategies in

partnership building, multi channeling, and

innovative products using state-of-the-art

technologies appear to produce ‘quick-wins’

for postal operators. Examples can be seen

in, for example, Indonesia, Malaysia, India,

Kazakhstan, Kyrgyz Republic and Azerbai-

jan and are very promising. This approach

helps to create a basis for further expansion

towards a competitive operation in financial

services, enhancing outreach of access to

financial inclusion.

Also, Laos, Vietnam, Papua New Guinea

and others have already progressed with

implementing strategies in this direction.

In general, postal financial services are, in

Asia, the single largest revenue component

for Posts. This is clearly the case in China

and India. The roadmap of development in

postal financial inclusion in Asia also faces

increasing challenges. In urban areas,

banks and other financial service providers

are omnipresent and often provide niche

segments for postal networks. In rural

areas mobile communications technology

is practically everywhere. In this context,

the example of Bangladesh in moving for-

ward its mobile money product is to be com-

mended. The market for mobile financial

services features strong growth prospects

in Asia, and the question is whether - and

how - physical networks of postal operators

can plug in to the opportunities of mobile

money.

The IFAD Financing Facility for Remittances

(FFR) is a multi-donor initiative working to

d

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South Asia