South Asians rely on informal money transfers: Study
27 May 2013 - {{hitsCtrl.values.hits}}
PTI: Nearly 800 million South Asians and Indonesians sent or received a payment or remittance last year with a majority of them doing so informally, according to a new Gallup study.
About 60 percent of the adult population in the South Asian region and Indonesia, sent or received a payment or remittance in 2012, mostly informally, with 512 million people sending or receiving cash in person or sending it informally in some other way, the Gallup study, funded by the Bill & Melinda Gates Foundation said.
Remittances or payments could have been domestic or international, sent to friends or family, a school or other institution or received from the government, a non-government employer or from the sale of crops, produce or livestock.
Sri Lanka and Indonesia had the highest number of respondents reporting such payments or remittance activities, at 84 percent and 83 percent, respectively, in the 12 months before the survey.
Those in Afghanistan were the least likely to report these types of transactions, with 46 percent responding that they had either received or made a money-based transaction.
About three in 10 South Asian and Indonesian respondents (32 percent) made at least one payment to a school, company or other institution, making this type of payment the most common across all transaction types surveyed.
The majority of these school/company/institution transactions were cash only (84 percent) in nature and Sri Lankans (60 percent) and Indians (57 percent) led in conducting these types of transactions. Four percent of all people who took the survey reported being cheated or losing money when either sending or receiving it, domestically or internationally.
Of those, 76 percent reported losses during the process of receiving an informal cash transfer, while 24 percent reported the loss during an electronic transfer or some other way.
Seventy-five percent of men, compared with 45 percent of women, reported making or receiving at least one transaction in the given period. However, women who made or received a payment or remittance were more likely to have done so electronically (11 percent) than men (8 percent).
The study said that there is a largely untapped market of 512 million people in South Asia and Indonesia who currently conduct informal cash-based transactions, including using informal money carriers, sending the money by bus or travelling friends or simply carrying cash themselves to deliver it.
That people are frequently using options to transfer money with inherent risk illustrates the importance of providing safer, better options to transfer money, the study said. While the study shows that 83 percent of survey respondents have access to a mobile phone, these countries lag far behind in Internet saturation, with 6 percent of respondents saying they had access to the Internet at the time of the survey. Thus, mobile-based banking options may be a prime target for increasing formal transactions, while Internet-based banking options or transfer capabilities only have the potential to reach a small segment of the highest educated and wealthiest of the population at this time, the study said.
