Cambodian migrant workers sent home $256 million last year, according to a report from a U.N. agency and the World Bank, which was released in Bangkok on Monday.
The report from the bank and Rome-based International Fund for Agricultural Development (IFAD), titled Sending Money Home to Asia, found that migrants from Asia sent a total of $260 billion in international remittances in 2012.
Remittances are a source of much-needed finance to rural families, with young relatives heading abroad to work in cities for higher wages.
“[B]ut high [bank] fees and limited financial services outside of urban areas are reducing the benefits of those remittances for millions of rural residents,” says a joint statement accompanying the report.
The report does not specifically outline how serious these problems are in Cambodia, which received $256 million, or 1.8 percent of gross domestic product (GDP), in remittances last year. Workers sending money home are charged on average 5.59 percent on remittances to Cambodia, the report says.
Across Asia, two-thirds of outlets where people can collect remittances are in urban areas, a factor that limits the positive impact the money sent back can have. But the report notes Cambodia’s high saturation of microfinance institutions (MFIs) in the provinces means that rural access to remittances is likely better than elsewhere.
MFIs account for 26 percent of transfers to Cambodia, but the costs for these transfers average 10 percent of the amount being sent, the report says.
The report credits the World Bank as the source for the remittance figures, but a 2006 report on IFAD’s website says that remittances to Cambodia then totaled a much larger $559 million, or 7.8 percent of GDP.
So Phonnary, executive vice president in charge of operations at Acleda Bank PLC, said the bank, with its 238 branches, had the majority of the remittance market.
“We have branches in the provinces, not just in Phnom Penh. It means it’s convenient for the customers if their families live in the rural areas,” she said.
Ms. Phonnary said the bank saw an average of $81 million of incoming remittances each month—with the cost of a transfer starting at a flat rate of $10 for low sums—suggesting that the real figure for remittances is far higher than cited in the latest report.
Moeun Tola, head of the labor program at the Community Legal Education Center, said many migrant workers, especially those working in Thailand, send money back through informal channels, which would not be included in the report.
“It is hard for us to know how much is really sent,” he said.
“Sometimes they use Western Union, but from what we learn, some of them use the illegal or informal money carriers.”
He said although they are based on trust, these informal brokers appeared to be reliable on most occasions, and were easier to access for poorly educated migrant workers who may not speak local languages.
National Bank of Cambodia Director-General Nguon Sokha said Cambodia received remittances from everywhere to which Cambodians had migrated, in particular the U.S.
“The cost is competitive, it’s relatively affordable compared to international rates,” she said. “It is on a fee basis and each bank has a different policy, and we ask them to publish the price of their services so customers can compare.”