The joint DFID and WorldBank-hosted conference on remittances held on13-14 November in London focused on the links between remittances and financial inclusion and followed up the outcomes of the first DFID-World Bank International Conference on Remittances in October 2003.
The conference brought together over 150 participants, including central bank governors, Government officials from developed and developing countries, academics, money transfer operators, commercial banks, credit card companies, diaspora, and representatives of the international donor community, NGOs and international organisations. Feedback from the conference participants was extremely positive. 90 per cent. of participants rated the conference either ‘very good’ or ‘outstanding’ in terms of its agenda, quality of presentations and selection of speakers.
The conference highlighted that remittances offer the potential for enhancing poverty reduction and growth, not least through bringing many millions of people into the formal financial sector. It was clear that:
While the cost of sending remittances has been brought down, further reductions are needed,
Access to remittances for poorer and more rural people is being extended, but further improvements are needed, and
Those receiving remittances would benefit from better access to other financial services, such as savings accounts.
The General Principles for International Remittance Services were launched at this conference. These principles act as a guide for regulators, governments and remittance providers, and are designed to improve the market for remittance services in sending and receiving countries. They were formulated by an international taskforce led by the Bank for International Settlements and the World Bank, with DFID support. DFID will work with the World Bank and others to assist developing countries in implementing the general principles.
The conference highlighted the importance of harnessing technology and working with the private sector in order to improve the impact of remittances. DFID supports the expansion of mobile phone banking through a joint programme of work with the World Bank and the global system for mobile communication (GSM) association. This will include assessments of improvements that can be made to the regulatory framework for mobile banking in more than 10 countries. As regulatory issues can be a major constraint to the development of this technology, DFID has already worked together with regulators and mobile banking providers in Kenya and South Africa to identify and map out a positive and appropriate policy and legal framework for mobile banking.
DFID will continue to support the UK Remittances Task Force in helping speed up the private sector’s response to the remittances and financial inclusion challenges that this conference emphasised. The UK Remittances Task Force is a positive example of the private sector setting goals for improving remittance services to developing countries that are driven by both commercial and development objectives.
The conference confirmed the need for controls to prevent money laundering via remittances, but in a way that also promotes financial inclusion. DFID is funding a project through the Financial Reform and Strengthening (FIRST) Initiative that will provide tools for developing country regulators to better achieve this balance.