Effect on Remittance Post Pandemic | Remittance Evolve

In the wake of a pandemic, Covid-19 has crippled the economies of rich and poor countries alike. Let alone the health and population decline in many nations, there has been a huge hit to the financial aspect of economies as well. Yet for many low-income and fragile states, the economic shock will be magnified by the loss of remittances and money transfers. This is because remittance flows into low-income and fragile states represent a lifeline that supports households as well as provides much-needed tax revenue. With the pandemic and lockdowns affecting travels and crossing borders, it has been rather difficult for immigrant workers to send money back to their home country. Thus, making it worse for the sustainability of their family back home. The pandemic has affected many economies, moreover, money transfer and remittance services are to say in detail.

Primarily, there is a profound impact of the pandemic on the remittance industry. Remittances are a key source of finance for many developing countries. As Covid-19 devastated lives and livelihoods around the world, it continued to provide an essential lifeline for poor and vulnerable groups, helping to meet their increased need for livelihood support during the pandemic. Contrary to predictions, overall remittance flows remained resilient in 2020 rising in South Asia by 5.2%, Latin America and The Caribbean by 6.5 %, and falling in the East Asia and Pacific region by 7.9%, Europe and Central Asia by 9.7% (World Bank Blogs). Compared to the previous economic crisis, this pandemic poses an even greater threat to countries that rely heavily on remittance income. The global nature of this crisis means that not only will recipient countries see remittance flows dry up, but they also will simultaneously experience outflows of private capital and maybe a reduction in aid from struggling donors.

Moreover, there are actions that need to be taken, in order to improve the state of remittance post-pandemic. Ideally, there are several ways to keep remittance flowing post-pandemic. Firstly, remittances must be deemed as an essential financial service. We call on policymakers, regulators, and service providers to deem money transfer agents as an essential finance service, so they can continue operations amidst the pandemic. Secondly, it is important to foster a conducive remittance policy and regulatory environment. An effective regulatory remittance framework should balance innovation and risk during the transition. Providers tend to struggle to maintain operations and sustain business costs, governments could provide concessional lines of credit and consider temporary tax breaks or waivers on their operating expenses and fees. Additionally, it is important to invest in digital solutions. This is where the use of digital remittance channels comes into the picture. With the increasing growth in technology, digital remittance channels become more efficient and user-friendly. Here at Lotus Remit,we provide digital remittance services which are fast, secure, and easy to use. Always aiming to provide better and more efficient service for customers. It is also necessary to enable access to formal remittances channels. This could be made possible by partnering with Fintech hubs and so on. Remittance poses a lifeline for many countries, particularly in Africa and Asian countries. Finally, it is important to strengthen the digital capacity of users. Ensuring senders and receivers access to digital channels is critical to keeping remittances flowing during lockdowns and limited mobility (World Bank Blogs). These are ways that can keep remittance flowing without a decline in the industry that might affect economies further.

In conclusion, the pandemic has brought about a decline in many economies, and this has in turn affected the remittance and money transfer industry severely. Living in the post-pandemic era, it is important for us to realize certain things need more effort to get back to the way they were pre-pandemic or grow from thereon. In the case of remittance, there is a role that the government can play as well as the end-users to make the experience better for everyone. Following the ways above, is also why the Asia market did relatively well post-pandemic and this could help us improve the industry further. Here at Lotus Remit, we do our best to keep up with the current needs of the economy and serve our customers with the best service possible.