Remittance Economy

Twenty years ago this week, we wrote about the growing contribution of migrant workers to the national economy. Things have only gone south since. In the first six months of this fiscal year, Nepalis sent home Rs763 billion while in 2024, remittance made up 26.31% of Nepal’s GDP equivalent, from just 1.5% in 1993.

Excerpts from the report published on issue #237 4 – 10 March 2005:

For the last 15 years, Ganesh Lama has been working as a manager in Qatar. He can't believe how convenient it is to send money home. Until a few years back, Ganesh depended on friends to deliver cash to his wife and children in Kathmandu. He had to wait for months to find someone reliable.

Today, all Ganesh does is go to the Doha Bank in Qatar once a month to transfer the money to Nabil Bank in Kathmandu. "It's done in minutes," he says. The process of money transfer to Nepal from abroad has not just become efficient but it is now possible to accurately measure how much money Nepalis abroad repatriate to their home country every year.

Even so, only 40 percent of Nepali workers overseas use remittance companies. The rest still rely on the hundi system, which takes up to two weeks, is unreliable and the operator takes a big cut.

Now, Western Union and 25 other recognised remittance companies help with transfers from all over the world to all over Nepal. "People are more confident about sending money home for a nominal service charge," says Arun Acharya from Annapurna Travel, which has been working on remittance banking for the last 10 years. Since 2001, the flow of remittance to the country has grown 15-20 percent every year and in 2004 money from overseas Nepalis crossed Rs 100 billion-making it a bigger source of foreign exchange than tourism and all exports combined.

"It's remarkable, the contribution Nepal's overseas labour force is making to prop up the national economy," says Prajuman Pokhrel of Nabil Bank, which is the main agent here for Western Union. There are now an estimated 1.2 million Nepalis working in 40 countries, not counting India.

For archived material of Nepali Times of the past 20 years, site search: nepalitimes.com