Dubai: When people queue for hours outside remittance and exchange houses, they're not just doing so to send money.
UAE Exchange Centre chief operating officer Sudhir Kumar Shetty said: "They send sentiments, especially on the eve of Eid, festivals, Diwali and other occasions."
"It is our duty to transfer the money to the beneficiaries in time ahead of the festivals or occasions so that the beneficiaries [can] enjoy and benefit from the timely delivery of remittances," Shetty said.
"With the timely delivery of these limited amounts, we ensure that they benefit from the money and share the unlimited joy, the sentiment, with their families."
The lives of family members whose sole bread-winner lives abroad are largely dependent on remittances, he said.
Timely dispatch
While the timely dispatch of money could save someone's life, the late dispatching of money could have catastrophic consequences in the lives of beneficiaries who are in dire need.
"That's why it remains our utmost priority to ensure [the] timely delivery of remittances to the beneficiaries," Shetty added.
With economies around the world becoming more integrated, the dependence of nations upon migrant labourers has also increased. As globalisation increases, so do immigration and remittances.
World Bank data shows that remittances sent to developing countries reached $316 billion (Dh1.1 trillion) in 2009, down six per cent from a revised $336 billion in 2008.
"With improved prospects for the global economy, remittance flows to developing countries are expected to increase by 6.2 per cent in 2010 and 7.1 per cent in 2011 — a faster pace of recovery in 2010 than our earlier forecasts," said Dilip Ratha, an economist with the World Bank, touching on the latest World Bank report on migration and remittances.
"However, because of the decline in 2009 and uncertain prospects for employment, they are not expected to grow as rapidly in the post-crisis period compared to the pre-crisis period."
The decline in remittances to Latin America that began with the onset of the financial crisis in the United States appeared to have bottomed out since the last quarter of 2009.
Remittance flows to South Asia, and to a smaller extent East Asia, continued to grow in 2009 — although at a markedly slower pace than in the pre-crisis years, the report said.
Flows to Europe, Central Asia, the Middle East and North Africa fell more than expected in 2009.
Unlike private capital flows that declined sharply during the crisis, remittance flows have remained resilient and have become even more important as a source of external financing in many developing countries. However the scenario was healthier in the GCC, Shetty said.
"During 2002-08, the remittance business grew at about 40-45 per cent year on year," he said.
"Post September 2008, the pace of growth has declined to 20-25 per cent. However, [the] remittance [industry] is still one of the fastest growing financial service sectors. The global recession did not affect our business."
This was due to a number of factors, he said.
Firstly, the decline in the real estate and construction sectors was largely offset by growth in the energy, infrastructure, trade, tourism and retail sectors.
"As a result, employment remained steady [and] that kept the momentum of the remittance flow," he said.
"I expect the remittance outflow to grow further next year as the macro-economic fundamentals remain strong due to large income from hydrocarbons."
However, the next growth region will be Africa, he said.
Expansion
UAE Exchange Centre, which last year handled $29 billion in transfers — including $17 billion in personal remittances — is expanding its network of offices.
The remittances last year were transferred through a network of 485 branches and offices spread across 22 countries and served by 6,700 professionals belonging to 38 nationalities, a UAE Exchange Centre spokesman said.
"We are planning to open branches in four countries while expanding in the retail network in the territories where we currently operate," the spokesman said. "We are launching operations in Dublin next month."
The company, which has outlets in Australia, Canada, the United Kingdom, Europe and the United States, said it would expand into three more states in the United States.
The business of remittances has grown, not only in numbers, but also in speed and efficiency.
Earlier, customers would fill in forms in one place, pay the money at another counter and collect the receipt at another. Finally, they would receive drafts at the last counter after waiting for an hour or more.
"Then there is the hassle of posting the draft in the mail, which used to take its own sweet time to reach the beneficiary. The beneficiary then had to take the trouble of submitting the draft to the bank and wait for the money to be deposited in the account, again after filling out forms," Shetty said.
Shetty, a veteran of the remittance industry, has been leading the UAE Exchange Centre since 1991.
During his 19 years with the company he has been at the forefront of the changes in the technology-enabled remittance business. He said the UAE Exchange Centre had invested heavily in technology — both hardware and software — to increase its efficiency.
"We have developed our own proprietary remittance software and system, unmatched in the market," Shetty said.
However, it was not easy. The company had to lobby governments to allow new systems to enable new processes. Luckily the banks and governments had also changed with the times to adopt new technology, he said.
"It is technology which has brought the changes and we have been lucky to be at the forefront of these changes."
Convenience
UAE Exchange Centre is to launch a mobile "wallet-based" money remittance system, which it says will enable customers to remit an amount of their choosing, at their own time and without having to go to a money exchange.
"We will enable the relationship or membership cards with chip and pin that could be pre-loaded with cash and customers can remit their money from the card to a remote area in any country online," Shetty explained. The new system works like any debit or credit card. The money can be transferred to the beneficiary's credit card and he can use the money instantly by just swiping at the vendor's point of sale.
Companies would have to employ RFID (radio frequency identification) technology to enable this.
"If the banks, telecom service providers and the governments adopt the new technology, then this new system will change the global remittance business altogether," he said.
Are you the sole bread winner in your family? Does your family depend on you to remit? Are you sending more home than usual? Are you getting enough value for the exchange?
