Remittances from Germany and their Routes to Migrants' Origin Countries A study on five selected countries Published by: Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH Postfach 5180 65726 Eschborn Internet: www.gtz.de Division 41 Economic Development and Employment Section Financial Systems Development Section Migration and Development E
[email protected] E
[email protected] Authors: Elizabeth Holmes Carola Menzel Torsten Schlink Frankfurt School of Finance & Management www.frankfurt-school.de Responsible: Dr. Irina Kausch Dr. Brigitte Klein Dr. Hans Werner Mundt Jenni Winterhagen ^ Thérèse Zák Design: Jeanette Geppert www.jeanette-geppert.de Print: Druckreif, Frankfurt Source: Bildberg, Jeanette Geppert Bildquelle: aboutpixel.de/Brötchen 5 Pfennig-Teil 2 © Konstantin Gastmann Eschborn 2007 Germany is one of the most important countries of origin for remittances— money transfers from migrants. In 2006 they amounted to approximately ten billion euros. However, as this study shows, migrants face considerable difficulties with the transfer process. Despite its large volume, the market for money trans- fers is extremely intransparent. Intensive research is needed to discover which financial institutions offer what kind of services, and at what cost. In some cases the cost of these services is extremely high. The result is that transfers are frequently made through informal channels. According to a World Bank study, half of all remittances to Serbia are transported as cash. This form of money transfer reduces the developmental potential of remittances. To make better use of these and increasingly steer remittances into formal channels will require increased cooperation with the financial sector. The financial sector itself will benefit as formally transferred remittances help strengthen inclusive financial systems providing services to population groups that have been neglected so far.