KATHMANDU, Jan 7: Formation of Labor Bank, which is said to utilize remittances sent by migrant workers, is becoming uncertain due to government's apathy.
Foreign Employment Promotion Board (FEPB) had sent the required documents for formation of the bank to the Ministry of Labor and Employment two years ago. But the proposed bank is yet to get permission.
It had been expected that the bank would provide cheaper loans to youths heading to greener pastures abroad and utilize remittances sent by them.
Raghu Raj Kafle, executive director of FEPB, said that the concerned agencies of the government have not held any discussion about formation of the bank in the past 4-5 years. “Had the bank been established, laborers going abroad for employment would have got easy loans,” Kafle said, adding that they had prepared required documents with great difficulty.
Experts say that formation of labor bank is a must for countries like Nepal which is highly dependent on remittances.
People plying their trade in foreign countries have been sending their hand-earned money home from unofficial channel. Remittance companies, which are present in only a few countries, cannot serve huge number of employees. Experts say more than half of the amount sent by Nepali in South Korea comes through unofficial channels like hundi as remittance companies are yet to expand their service there.
They are more than 40,000 Nepali workers in South Korea.
Remittance companies operating in Gulf countries and Malaysia are failing to expand service as per the demand.
More than 4.4 million Nepalis have left for foreign land for employment since 1994 taking permission from the Department of Foreign Employment. More than two million of them are still employed in foreign lands. The census of 2011 also shows that more than 1.9 million people are in foreign land for employment.
According to Kafle, money send by Nepali workers would be properly utilized if labor bank is established. The data of Central Bureau of Statistics shows that only 2 percent of the remittances is spent on productive sector.
Around 500,000 Nepalese leave for foreign employment every year. According to the Nepal Rastra Bank (NRB), Nepal received around Rs 6.75 billion in remittances in the last fiscal year.