Nepal | September 27, 2020

Most remittance recipient households save to buy assets

Pushpa Raj Acharya
Share Now:

Remittance recepeintsKathmandu, September 28

Majority of remittance recipient households use the savings from the remittance money to purchase land and houses, says a recent survey commissioned by Nepal Rastra Bank (NRB).

The survey conducted among 320 remittance recipient households of 16 districts covering all five development regions shows that 66.6 per cent of the households save the remittance money in some form. Similarly, 33.4 per cent of the households use the remittance money for consumption and to repay loans.

The study titled ‘Saving and Investment Trend of Remittance Recipient Households’ commissioned by NRB shows that 66.6 per cent households or 213 families, who save remittance money use their savings to buy land and houses. Around half or 48.8 per cent of the households that save said that they will use their savings to build a house.

Likewise, 34.3 per cent of the total households included in the survey mentioned that they will utilise their savings for the education and health of their children and family members in the future.

As per the survey, a migrant worker sends remittance 6.2 times in a year and 90.9 per cent use formal channels, 5.9 per cent use hundi and the remaining send money through relatives and friends who are working with them in the labour destination.

Hundi is massively used to send money from South Korea. As per the survey, 70 per cent migrant workers in Korea use hundi to send remittance. In contrast, 96.2 per cent migrants from Gulf countries send remittance through formal channels, and only 1.1 per cent use hundi, 2.2 per cent use both hundi and formal channels and 0.2 per cent send money through relatives and friends.

The survey was carried out in Jhapa, Sunsari, Tehrathum and Khotang districts of eastern development region; Dhanusha, Kathmandu and Chitwan districts of central development region; Kaski, Lamjung, Gorkha and Rupandehi districts of western development region; Dang and Kalikot directs of mid-western development region; and Bajura, Kailali and Baitadi districts of far-western region.

In the survey, 44.7 per cent of the total households were found to be associated with agriculture profession and remaining were engaged in other jobs. During the survey, 80.8 per cent of the families said that other income sources were insufficient to cover their household expenses and 18.8 per cent of the total households were totally dependent on the income of the migrant worker, meaning remittance.

Around half of the families were led by women as the male members of the family had opted for jobs overseas. Among the 320 households included in the survey, 64.1 per cent have bank accounts. In rural areas, many households were found to be depositing their savings in either cooperatives or in informal groups, the survey says.

Even as national savings in gross domestic product (GDP) stands at 46 per cent, remittance recipient households are able to save only 28 per cent of remittance they receive, as per survey.

“The major reason for low saving is that the remittance recipient households do not have diversified income source, while high inflation, lack of presence of banks and financial institutions in rural areas, among other factors exacerbate the problem.”

Nepal ranked in the 23rd position in terms of remittance amount with total $6.6 billion remittance inflow in 2015, according to the World Bank. In terms of per cent of GDP, the country ranked in the third position after Tajikistan and Kyrgyz Republic as it received remittance equivalent to 29.2 per cent of GDP.

As per survey, the base of remittance can be increased by channelising the remittance inflow through formal channels and sending skilled and professional (high-end) migrant workers to the labour destinations. It has also suggested diversifying labour destinations, which has been concentrated in Gulf Cooperation Council countries since long.

According to data of some two years back obtained from Department of Foreign Employment, 73.67 per cent of the migrant workers are unskilled, 11.96 are semi-skilled, 14.34 are skilled and 0.02 per cent are professionals.


A version of this article appears in print on September 29, 2016 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Remittance surges 23pc in first month of FY 20-21

KATHMANDU, SEPTEMBER 25 Against the general expectation that remittances would take a major hit due to the coronavirus pandemic, the money sent home by Nepali migrants in the first month (mid-July to mid-August) of fiscal year 2020- 21 surged by 23 per cent. The Macroeconomic Update of the fir Read More...

713 proposals submitted for joint infrastructure development to MoCTCA

KATHMANDU, SEPT 25 The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has received 713 proposals for tourism infrastructure development across the country. Under the Tourism Infrastructure Construction and Tourist Product Development Joint Project Framework 2020, MoCT- CA had called Read More...

consumer price inflation slows to 3.49pc

KATHMANDU: The year-on-year consumer price inflation stood at 3.49 per cent in mid-August 2020 compared to 6.95 per cent a year ago reveals the central bank’s Macroeconomic Update report unveiled on Friday. Food and beverage inflation stood at 5.38 per cent whereas non-food and service inflatio Read More...

BPKIHS confirms another death from COVID-19 on Saturday

DHARAN: BP Koirala Institute of Health Sciences, Dharan has confirmed another death due to Covid-19, on Saturday. The 63-year-old man from Rajbiraj Municipality-3 in Saptari district died at 1:15 am during the course of treatment, according to Dr Nidesh Sapkota at the hospital. He said the eld Read More...

Worldwide coronavirus cases cross 32.46 million, death toll over 985,000

At least 32,467,949 people have been reported to be infected by the novel coronavirus globally and 985,007 people have died, a Reuters tally showed. India reported 86,052 new coronavirus cases on Friday and was set to overtake the United States by next month as the world's worst-affected na Read More...

1,207 new cases take Nepal’s coronavirus tally to 71,821 on Saturday

KATHMANDU: Nepal’s coronavirus tally moved to 71,821 as 1,207 new infections were reported in the last 24 hours. As many as 1,147 people that had earlier contracted Covid-19 tested negative for the infection as per the Ministry’s latest data. So far, 53,013 people have recovered from the dise Read More...

Eight Covid-19 fatalities registered on Saturday, death toll advances to 467

KATHMANDU: Eight more individuals diagnosed with coronavirus infection have succumbed to the disease, the Ministry of Health and Population confirmed at its regular media briefing on Saturday. All of those reported dead were males. Details of the deceased individuals 66-year-old male, Sap Read More...

Dhangadhi Sub-metropolis continues providing free food to returnees from India

DHANGADHI: Dhangadhi Sub-metropolitan City has been providing food and hygiene kits free of cost to Nepalis returning home from India via Trinagar border checkpoint since March. The Sub-metropolis has been providing food for Nepalis who are tired after a long journey from India since the time Read More...