Amid the COVID-19 crisis, the costs of transferring remittances to the region could increase due to operational challenges being faced by remittance service providers (closures of agents and offices, access to cash, foreign exchange, security) and compliance with AML/CFT regulations.
With global remittances projected to decline by about 20 per cent this year, the World Bank has said that the economic crisis and shutdown induced by the COVID-19 pandemic could result in the sector experiencing the sharpest decline seen in recent history.
The entity said the projected fall stems largely from the fall in wages and employment of migrant workers — who tend to be more vulnerable to the impacts during an economic crisis in host countries.
“Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies,” said World Bank Group President David Malpass in a release on Wednesday.
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