Remittances from Austria

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Remittances from Austria Remittances from Austria Final Report Prepared for OeEB by Torsten Becker, Paul Hockenos, Elizabeth Holmes Vienna, April 2009 Assessment Study – Remittances from Austria Final Report April 2009 Prepared by: Torsten Becker Paul Hockenos Elizabeth Holmes Frankfurt School of Finance & Management Sonnemannstrasse 9-11 60314 Frankfurt a.M. Tel. +49-69-154008-620 Fax +49-69-154008-4620 [email protected] http://www.frankfurt-school.de Content 1 Executive Summary ................................................................................................................................. 1 2 Introduction ............................................................................................................................................. 4 2.1 Methodology ............................................................................................... 5 3 Mapping the Remittance Market in Austria ............................................................................................. 8 3.1 Outline of Remittances from Austria ...................................................................... 8 3.2 Remittance Service Providers in Austria ................................................................. 10 3.2.1 Overview of RSPs in Austria .................................................................... 10 3.2.2 Branch Network in Austria and SEE, Hours of Operation ...................................... 10 3.2.3 Overview of Remittance Transfer Products ...................................................... 12 3.2.4 Costs, Duration, and Conditions of Transfers ................................................... 14 3.2.5 Outcome of Test Money Transfers ............................................................... 18 3.2.6 Austria‘s Approach and Challenges in Providing Remittance Products .......................... 19 3.3 Remitters from SEE in Austria and their Use of Transfer Channels ..................................... 22 3.3.1 Kosovars in Austria ............................................................................. 23 3.3.2 Moldovans in Austria ............................................................................ 27 3.3.3 Serbs in Austria ................................................................................. 29 3.3.4 Bosnians in Austria ............................................................................. 32 4 Assessment of Remittances from Austria to four SEE Recipient Countries ............................................. 34 4.1 Overview of Migration from SEE ........................................................................ 34 4.2 Overview of Remittances in SEE ......................................................................... 34 4.3 Serbia .................................................................................................... 34 4.3.1 Migration from Serbia ........................................................................... 34 4.3.2 Remittances in the Financial Sector ............................................................ 35 4.3.3 Migration Policies, Remittances Use and Investment ............................................ 42 4.4 Moldova ......................................................................................................................................................... 47 4.4.1 Migration from Moldova .................................................................................................................. 47 4.4.2 Remittances in the Financial Sector................................................................................................ 48 4.4.3 Migration Policies, Remittances Use, and Investment .................................................................... 59 4.5 Bosnia and Herzegovina ............................................................................................................................... 69 4.5.1 Migration from Bosnia and Herzegovina ........................................................................................ 69 4.5.2 Remittances in the financial sector ................................................................................................ 69 4.5.3 Migration Policies, Remittances Use, and Investment .................................................................... 78 4.6 Kosovo ........................................................................................................................................................... 83 4.6.1 Migration from Kosovo .................................................................................................................... 83 4.6.2 Remittances in the financial sector ................................................................................................ 83 4.6.3 Migration Policies, Remittances Use, and Investment .................................................................... 91 5 Recommendations .................................................................................................................................. 97 5.1 Recommendations on Improving the Development Impact of Migration and Remittances in SEE ........... 97 5.1.1 In Austria ......................................................................................................................................... 97 5.1.2 In South Eastern Europe ................................................................................................................. 99 5.2 Specific Recommendations to OeEB in the area of remittances ..............................................................104 5.3 Project Ideas ........................................................................................... 105 Assessment Study – Remittances from Austria Page i Final Report Annexes Annex : List of MTOs operating in Austria Tables Table 1: Workers‘ remittances from Austria 2007 8 Table 2: Banking sector outreach in Austria (2007) 11 Table 3: International branch networks of the four Austrian major players 11 Table 4: Austrian banks‘ fees for EUR 100 and EUR 500 wire transfers to selected countries (in EUR) 14 Table 5: Special fees for group internal transactions to selected countries (in EUR) 15 Table 6: MTO fees for EUR 100 and EUR 500 transactions to selected countries (in EUR) 16 Table 7: Online provider 1, transfer fees for EUR 100 and EUR 500 transactions (in EUR) 16 Table 8: Remittance duration for different types of transfers 17 Table 9: Results of test money transfers (EUR 100) 18 Table 10: Incoming transfers from selected countries to physical persons´ foreign currency accounts 2000-2007 (in USD millions) 35 Table 11: Development of the Serbian banking sector from December 2003 to June 2008 37 Table 12: Incoming international payments fees for natural persons 39 Table 13: Key indicators on the overall Moldovan banking sector in detail: 49 Table 14: Some key indicators on the Moldovan banking sector, per bank 50 Table 15: Comparison of MTO‘s in Moldova 51 Table 16: Remittances Transfers from Financial Institutions in Moldova 52 Table 17: Financial Institutions‘ Revenue from Remittances Transfers in Moldova 52 Table 18: Deposits in Moldovan banks 53 Table 19: Loans, total as well as consumer and mortgage loans, in Moldovan banks 54 Table 20: Methods to Transfer Remittances 63 Table 21: Contribution of Remittances to Household Income 65 Table 22: CBBH estimates of total inflows of remittances 2003 - 2007 (in KM millions) 69 Table 23: Number and network of Bosnian banks as of 30 June 2008 71 Table 24: Assets and liabilities in BiH (in KM million), September 2008 71 Table 25: Development and structure of deposits and loans of Bosnian commercial banks (in KM million) from 2000 –December 2008 72 Table 26: Incoming international payments fees for natural persons (selected banks) 73 Table 27: Assets and liabilities of the twelve largest MCOs as of September 2008 (in KM million) 75 Table 28: CBK estimates of total remittances volume 2005 – 2007 (in Mio. Euro) 83 Table 29: Number and network of Kosovo banks as to 31 December 2008 85 Table 30: Bank balance sheets as of 30/09/2008 in ‗000 Euro 85 Table 31: Highlights from balance sheets 2005– 30/09/08 in ‗000 Euro 86 Table 32: Specification of households‘ deposit 86 Table 33: Approximate CAR as of 30/09/2008 86 Table 34: The banks‘ fees for receiving 87 Table 35: Average Amounts remitted by Kosovars abroad 88 Table 36: Loan balance and equity of seven selected MFIs in Kosovo (in ‗000 Euro) 89 Annex List of MTOs operating in Austria Annex 1 Assessment Study – Remittances from Austria Page ii Final Report Abbreviations ADA Austrian Development Agency ADC Austrian Development Cooperation AFK Agency for Finance in Kosovo AK Justice and Development Party AMIK Association of Microfinance Institutions of Kosovo ATM Automatic Teller Machine BEK Banka Economike BiH Bosnia and Herzegovina BKT Banka Kombetare Tregtare BpB Bank for Business BZFM Beselidhja Zavet Microfinance CAR Capital Adequacy Ratio CBBH Central Bank of Bosnia and Herzegovina CBK Central Bank of Kosovo CBS-AXA Centre for Sociological Investigations and Marketing CEE Central and Eastern Europe CEO Chief Executing Officer CIS Commonwealth of Independent States: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan COH Cash on hands CPM Consulting & Projektmanagement DEP Directorate for Economic Planning DFID UK Department for International Development DIS Deposit Insurance Scheme EBRD European Bank for Reconstruction and Development
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