Document Text Contents
Page 1
Migration and
reMittances for
developMent in asia
MAY 2018
Migration and remittances for development in asia
Currently, over 80 million people from Asia and the Pacific live and work outside of their countries of origin.
Migration and remittances have both positive and negative effects. For the countries, remittances became
an important source of foreign exchange. At the household level, remittances enable families to spend more
on education and health. However, migration also has a negative social impact, including the exploitation
and abuse of workers. This report explores ways to enhance the welfare of migrant workers as well as ways to
improve the productive investments of remittances to support the countries’ growth and development.
about the asian development Bank
ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries
reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains
home to a large share of the world’s poor. ADB is committed to reducing poverty through inclusive economic
growth, environmentally sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping
its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and
technical assistance.
AsiAn Development BAnk
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org
Page 53
Financial Literacy Programs for Remittances 39
Private companies and NGOs also offer various products and programs to improve financial
literacy. In some cases, private companies and NGOs work closely with national governments,
as illustrated by the following examples.
In the Philippines, seminars and training programs on financial literacy were conducted not
only in the Philippines but also in the different destination countries of Filipino migrants.
These seminars and training programs included the Philippines’ Philam Life Insurance’s
BalikBayani Program (Philam Life 2015), and the Bank of the Philippine Islands BPInoy
Learning Program conducted with OWWA (Bagasao 2013). This also included various financial
literacy programs conducted by the Bankers Institute of the Philippines (BAIPHIL 2016), the
Center for Agriculture and Rural Development–Mutually Reinforcing Institutions (CARD–
MRI 2016) as well as those programs conducted by universities such as the Leadership and
Social Entrepreneurship Program for Migrant Filipinos conducted by the Ateneo School of
Government of the Ateneo de Manila University.
In Nepal, the NGO Pourakhi, whose members are all former migrant workers, has been
helping migrant workers deal with different issues including financial literacy. The NGO
Pourakhi notes that most of the remittances are “spent on luxurious items and not invested in
productive ways” (Ebrahim 2014).
In Bangladesh, the use of microfinance among migrant workers and the general population
is more common than in other migrant-sending countries in Asia. Rahman et al. (2012) have
considered Bangladesh a pioneer in adopting the concept of microfinance. The Bangladesh
Rural Advancement Committee (BRAC), one of the leading microfinance institutions in
Bangladesh, provides premigration counseling to migrants as part of the migration welfare
loans it offers. They also provide training programs for potential migrants to improve their
financial inclusion (BRAC 2012).
In India, the Rajasthan Shram Sarathi Association is among the NGOs helping migrant
laborers improve their financial inclusion. The association “tries to deliver financial services
to migrant households, by offering financial services such as Gullak savings, bank linkages,
microloans, insurance, pension and financial literacy programmes for migrant households”
(Edelgive Foundation 2015).
Migrant-receiving countries have also been promoting financial literacy among immigrants.
In many cases, national governments and various government agencies have taken the lead
in the promotion of financial literacy. For example, Australia, the United States (US), and
the United Kingdom have developed national strategies on improving financial literacy of
the general population, including immigrants.23 These three countries have focused on the
importance of coordinating with the private sector stakeholders in improving financial
literacy especially among children, young adults, and newly arriving immigrants.
NGOs and private organizations in migrant-receiving countries have also been engaged with
financial literacy for immigrants. For instance, the Latino Community Credit Union (LCCU
2008) has been active in providing workshops for members of the Latin community in the
US. The thrust behind their activities is the wide wealth disparity between whites and Latin
immigrants (LCCU 2008). They conduct their financial literacy campaign through popular
23 For more details, see International Form for Investor Education’s website (http://www.ifie.org/).
Page 54
Migration and Remittances for Development in Asia40
education, a term that traces its roots in Brazil and is defined as “education [that is] based
on a democratic practice so participants can participate in discussion, debate and decision-
making” (LCCU 2008, 11).
Another example is Prosper Canada, a national charity that supports financial education
among new immigrants to Canada as a tool for poverty reduction (Prosper Canada 2014).
These supports help newcomer immigrants access information on how to manage day-to-
day financial difficulties, such as assuming financial responsibility for their dependent
family members and sending remittances to their families and relatives in countries of origin
(Prosper Canada 2015).24 Another similar organization is Aidha, an NGO funded by the United
Nations Development Fund for Women (UNIFEM), which provides financial education
to many domestic workers in Singapore. Aidha conducts workshops on “basic accounting,
entrepreneurship, effective communication skills, computer literacy, time management and
improving self-esteem” for migrant workers in Singapore, majority of whom are from the
Philippines, Indonesia, and Sri Lanka (Sarmiento 2009).
In the United Arab Emirates and Saudi Arabia, Western Union has launched the program
“Apna Sapna,” which is translated as “Our Dream” from Hindi and Urdu. This program
encourages financial education for migrant workers in these two countries. Apart from the
workshops, Apna Sapna also provides free booklets that list a variety of “recognized and
legitimate savings schemes” in countries where most of the migrant workers came from such
as India, Bangladesh, and Pakistan. As of 2016, a total of 18,500 migrants have attended the
trainings since the launch of the program in 2014 (PR Newswire 2016).
4.2.3 Empirical Findings on Impacts of Financial Literacy Programs
on Behavior
Not much has been done when it comes to assessing the impacts of financial literacy.
Developed countries, such as the US where financial literacy courses are mandatory in high
school, have not seen much success. Various studies cannot conclusively say that financial
literacy programs definitively lead to better financial education and, ultimately, to better
financial behavior (Hathaway and Kahtiwada 2008; Zia 2009; Hastings, Madrian, and
Skimmyhorn 2013). The problem with financial education, according to Willis (2011, 431),
is that changing people’s financial behavior “requires changing their emotional responses to
money.” However, as Hathaway and Khatiwada (2008, 19) pointed out, “it is not that financial
education programs could not work, but rather, it is that they do not work, perhaps because
they are poorly designed or administered.” Such an understanding makes it pertinent to look
at how financial literacy programs are designed and how these differences in designs affect
financial behavior.
(i) Impact on information-seeking behavior. In terms of information on remittance
channels and costs, Gibson, McKenzie, and Zia (2012), using a randomized experiment
design to measure the impacts of financial literacy training on migrants in New
Zealand and Australia, found that such financial literacy training can cause an increase
in financial knowledge, and information-seeking behavior. The migrants who have
24 Prosper Canada – Center for Financial Literacy. http://prospercanada.org/getattachment/3ff26769-c2d4-4d9e-
82e9-f56467e4eb31/Financial-Literacy-and-Newcomers-to-Canada.aspx.
Page 105
Conclusion—Promoting Migration and Remittances for Development in Asia 91
Although the region experienced a steady growth of remittance inflow during the last few
decades, it has certain risks to continue relying on remittances as a major source of foreign
exchange. Remittances are susceptible to external political and economic conditions. It should
also be recognized that working environments for migrant workers, especially for those with
low skills, are not necessarily favorable. They often face risky working environment, malicious
treatment, as well as risks of fraud and exploitation.
Concerted efforts by governments, the private sector, civil societies, and international
development partners are urgently called for to protect migrant workers’ rights and welfare
and to maximize the economic benefits of remittances. It is essential for the governments
of migrant workers’ home countries to have a clear vision and strategy on migration and
remittances. The government can adopt measures to enhance safe migration, including
having bilateral agreements with host countries on migrant worker protection as well as
strengthening regulation on migration agencies. The private sector, in cooperation with
development partners, can develop payment infrastructure and financial product for
remittances, as well as promote financial literacy education. Civil societies can assist in
creating awareness on safe migration and help returning migrant workers to reintegrate
into the society. More essentially, both the public and private sectors must share a clear
vision to leverage remittances to develop viable local industries and generate employment
opportunities at home. A goal should be to make migration an option, and not a necessity, as
it occurs today in many countries in the region.
References
J. Gibson, D. Mckenzie, and B. Zia. 2011. The Impact of Financial Literacy Training for Migrants.
Washington, DC: The World Bank.
The Global Knowledge Partnership on Migration and Development (KNOMAD). www.
knomad.org.
Government of Nepal, Ministry of Finance. Economic Survey Fiscal Year 2014/2015 and
2015/2016. Kathmandu.
S. Ketkar and D. Ratha. 2005. Recent Advances in Future-Flow Securitization. The Financier.
11/12.
N. Okonjo-Iweala and D. Ratha. 2011. A Bond for the Homeland. Foreign Policy. 24 May.
M. Ozaki. 2016. Making Most of Remittances: Vision and Strategies. The Himalayan Times.
20 October. https://thehimalayantimes.com/opinion/making-remittances-vision-
strategies/.
World Bank. 2017. Migration and Remittances: Recent Development and Outlook. Migration
and Development Brief. 27. Washington, DC.
Page 106
Migration and
reMittances for
developMent in asia
APRIL 2018
Migration and remittances for development in asia
Currently, over 80 million people from Asia and the Pacific live and work outside of their countries of origin.
Migration and remittances have both positive and negative effects. For the countries, remittances became
an important source of foreign exchange. At the household level, remittances enable families to spend more
on education and health. However, migration also has a negative social impact, including the exploitation
and abuse of workers. This report explores ways to enhance the welfare of migrant workers as well as ways to
improve the productive investments of remittances to support the countries’ growth and development.
about the asian development Bank
ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries
reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains
home to a large share of the world’s poor. ADB is committed to reducing poverty through inclusive economic
growth, environmentally sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping
its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and
technical assistance.
AsiAn Development BAnk
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org
Migration and
reMittances for
developMent in asia
MAY 2018
Migration and remittances for development in asia
Currently, over 80 million people from Asia and the Pacific live and work outside of their countries of origin.
Migration and remittances have both positive and negative effects. For the countries, remittances became
an important source of foreign exchange. At the household level, remittances enable families to spend more
on education and health. However, migration also has a negative social impact, including the exploitation
and abuse of workers. This report explores ways to enhance the welfare of migrant workers as well as ways to
improve the productive investments of remittances to support the countries’ growth and development.
about the asian development Bank
ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries
reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains
home to a large share of the world’s poor. ADB is committed to reducing poverty through inclusive economic
growth, environmentally sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping
its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and
technical assistance.
AsiAn Development BAnk
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org
Page 53
Financial Literacy Programs for Remittances 39
Private companies and NGOs also offer various products and programs to improve financial
literacy. In some cases, private companies and NGOs work closely with national governments,
as illustrated by the following examples.
In the Philippines, seminars and training programs on financial literacy were conducted not
only in the Philippines but also in the different destination countries of Filipino migrants.
These seminars and training programs included the Philippines’ Philam Life Insurance’s
BalikBayani Program (Philam Life 2015), and the Bank of the Philippine Islands BPInoy
Learning Program conducted with OWWA (Bagasao 2013). This also included various financial
literacy programs conducted by the Bankers Institute of the Philippines (BAIPHIL 2016), the
Center for Agriculture and Rural Development–Mutually Reinforcing Institutions (CARD–
MRI 2016) as well as those programs conducted by universities such as the Leadership and
Social Entrepreneurship Program for Migrant Filipinos conducted by the Ateneo School of
Government of the Ateneo de Manila University.
In Nepal, the NGO Pourakhi, whose members are all former migrant workers, has been
helping migrant workers deal with different issues including financial literacy. The NGO
Pourakhi notes that most of the remittances are “spent on luxurious items and not invested in
productive ways” (Ebrahim 2014).
In Bangladesh, the use of microfinance among migrant workers and the general population
is more common than in other migrant-sending countries in Asia. Rahman et al. (2012) have
considered Bangladesh a pioneer in adopting the concept of microfinance. The Bangladesh
Rural Advancement Committee (BRAC), one of the leading microfinance institutions in
Bangladesh, provides premigration counseling to migrants as part of the migration welfare
loans it offers. They also provide training programs for potential migrants to improve their
financial inclusion (BRAC 2012).
In India, the Rajasthan Shram Sarathi Association is among the NGOs helping migrant
laborers improve their financial inclusion. The association “tries to deliver financial services
to migrant households, by offering financial services such as Gullak savings, bank linkages,
microloans, insurance, pension and financial literacy programmes for migrant households”
(Edelgive Foundation 2015).
Migrant-receiving countries have also been promoting financial literacy among immigrants.
In many cases, national governments and various government agencies have taken the lead
in the promotion of financial literacy. For example, Australia, the United States (US), and
the United Kingdom have developed national strategies on improving financial literacy of
the general population, including immigrants.23 These three countries have focused on the
importance of coordinating with the private sector stakeholders in improving financial
literacy especially among children, young adults, and newly arriving immigrants.
NGOs and private organizations in migrant-receiving countries have also been engaged with
financial literacy for immigrants. For instance, the Latino Community Credit Union (LCCU
2008) has been active in providing workshops for members of the Latin community in the
US. The thrust behind their activities is the wide wealth disparity between whites and Latin
immigrants (LCCU 2008). They conduct their financial literacy campaign through popular
23 For more details, see International Form for Investor Education’s website (http://www.ifie.org/).
Page 54
Migration and Remittances for Development in Asia40
education, a term that traces its roots in Brazil and is defined as “education [that is] based
on a democratic practice so participants can participate in discussion, debate and decision-
making” (LCCU 2008, 11).
Another example is Prosper Canada, a national charity that supports financial education
among new immigrants to Canada as a tool for poverty reduction (Prosper Canada 2014).
These supports help newcomer immigrants access information on how to manage day-to-
day financial difficulties, such as assuming financial responsibility for their dependent
family members and sending remittances to their families and relatives in countries of origin
(Prosper Canada 2015).24 Another similar organization is Aidha, an NGO funded by the United
Nations Development Fund for Women (UNIFEM), which provides financial education
to many domestic workers in Singapore. Aidha conducts workshops on “basic accounting,
entrepreneurship, effective communication skills, computer literacy, time management and
improving self-esteem” for migrant workers in Singapore, majority of whom are from the
Philippines, Indonesia, and Sri Lanka (Sarmiento 2009).
In the United Arab Emirates and Saudi Arabia, Western Union has launched the program
“Apna Sapna,” which is translated as “Our Dream” from Hindi and Urdu. This program
encourages financial education for migrant workers in these two countries. Apart from the
workshops, Apna Sapna also provides free booklets that list a variety of “recognized and
legitimate savings schemes” in countries where most of the migrant workers came from such
as India, Bangladesh, and Pakistan. As of 2016, a total of 18,500 migrants have attended the
trainings since the launch of the program in 2014 (PR Newswire 2016).
4.2.3 Empirical Findings on Impacts of Financial Literacy Programs
on Behavior
Not much has been done when it comes to assessing the impacts of financial literacy.
Developed countries, such as the US where financial literacy courses are mandatory in high
school, have not seen much success. Various studies cannot conclusively say that financial
literacy programs definitively lead to better financial education and, ultimately, to better
financial behavior (Hathaway and Kahtiwada 2008; Zia 2009; Hastings, Madrian, and
Skimmyhorn 2013). The problem with financial education, according to Willis (2011, 431),
is that changing people’s financial behavior “requires changing their emotional responses to
money.” However, as Hathaway and Khatiwada (2008, 19) pointed out, “it is not that financial
education programs could not work, but rather, it is that they do not work, perhaps because
they are poorly designed or administered.” Such an understanding makes it pertinent to look
at how financial literacy programs are designed and how these differences in designs affect
financial behavior.
(i) Impact on information-seeking behavior. In terms of information on remittance
channels and costs, Gibson, McKenzie, and Zia (2012), using a randomized experiment
design to measure the impacts of financial literacy training on migrants in New
Zealand and Australia, found that such financial literacy training can cause an increase
in financial knowledge, and information-seeking behavior. The migrants who have
24 Prosper Canada – Center for Financial Literacy. http://prospercanada.org/getattachment/3ff26769-c2d4-4d9e-
82e9-f56467e4eb31/Financial-Literacy-and-Newcomers-to-Canada.aspx.
Page 105
Conclusion—Promoting Migration and Remittances for Development in Asia 91
Although the region experienced a steady growth of remittance inflow during the last few
decades, it has certain risks to continue relying on remittances as a major source of foreign
exchange. Remittances are susceptible to external political and economic conditions. It should
also be recognized that working environments for migrant workers, especially for those with
low skills, are not necessarily favorable. They often face risky working environment, malicious
treatment, as well as risks of fraud and exploitation.
Concerted efforts by governments, the private sector, civil societies, and international
development partners are urgently called for to protect migrant workers’ rights and welfare
and to maximize the economic benefits of remittances. It is essential for the governments
of migrant workers’ home countries to have a clear vision and strategy on migration and
remittances. The government can adopt measures to enhance safe migration, including
having bilateral agreements with host countries on migrant worker protection as well as
strengthening regulation on migration agencies. The private sector, in cooperation with
development partners, can develop payment infrastructure and financial product for
remittances, as well as promote financial literacy education. Civil societies can assist in
creating awareness on safe migration and help returning migrant workers to reintegrate
into the society. More essentially, both the public and private sectors must share a clear
vision to leverage remittances to develop viable local industries and generate employment
opportunities at home. A goal should be to make migration an option, and not a necessity, as
it occurs today in many countries in the region.
References
J. Gibson, D. Mckenzie, and B. Zia. 2011. The Impact of Financial Literacy Training for Migrants.
Washington, DC: The World Bank.
The Global Knowledge Partnership on Migration and Development (KNOMAD). www.
knomad.org.
Government of Nepal, Ministry of Finance. Economic Survey Fiscal Year 2014/2015 and
2015/2016. Kathmandu.
S. Ketkar and D. Ratha. 2005. Recent Advances in Future-Flow Securitization. The Financier.
11/12.
N. Okonjo-Iweala and D. Ratha. 2011. A Bond for the Homeland. Foreign Policy. 24 May.
M. Ozaki. 2016. Making Most of Remittances: Vision and Strategies. The Himalayan Times.
20 October. https://thehimalayantimes.com/opinion/making-remittances-vision-
strategies/.
World Bank. 2017. Migration and Remittances: Recent Development and Outlook. Migration
and Development Brief. 27. Washington, DC.
Page 106
Migration and
reMittances for
developMent in asia
APRIL 2018
Migration and remittances for development in asia
Currently, over 80 million people from Asia and the Pacific live and work outside of their countries of origin.
Migration and remittances have both positive and negative effects. For the countries, remittances became
an important source of foreign exchange. At the household level, remittances enable families to spend more
on education and health. However, migration also has a negative social impact, including the exploitation
and abuse of workers. This report explores ways to enhance the welfare of migrant workers as well as ways to
improve the productive investments of remittances to support the countries’ growth and development.
about the asian development Bank
ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries
reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains
home to a large share of the world’s poor. ADB is committed to reducing poverty through inclusive economic
growth, environmentally sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping
its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and
technical assistance.
AsiAn Development BAnk
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org
