KATHMANDU, August 25: The remittance flow to Nepal increased by about Rs 100 billion in the last fiscal year 2020/21, compared to the previous year. Although the number of people going for foreign employment decreased due to the COVID pandemic, the inflow of remittance increased.
According to Nepal Rastra Bank (NRB), Nepalis who went abroad for employment sent a total remittance of Rs 961.05 billion in the fiscal year 2020/21. In the previous fiscal year, a remittance of Rs 875 billion was received. Compared to the previous year, remittance increased by 9.8 percent last fiscal year.
Experts had predicted that remittance would decline as the number of people going for foreign employment fell during the pandemic and even destination countries were affected by it. The reason for this estimate was that there was a slight decline in remittance inflow in FY 2019/20 as compared to FY 2018/19. According to NRB, remittance had declined by about Rs 4 billion in FY 2019/20 as compared to FY 2018/19. As soon as Nepal started getting affected by the COVID-19 pandemic, destination countries where Nepalis usually go for employment were also affected.
Remittances worth Rs 521.63 billion flow into the country
Remittance collected in the FY 2020/21 is the highest in history. Experts believe that the main reason for the increase in remittance is the ban on the ‘Hundi’ business. Apart from the ban on Hundi, Nepalis working abroad significantly controlled their spendings and reduction in the purchase of luxury goods has also been considered as the basis for the increase in remittance.
Experts have stressed that the government should take special initiatives to stop the hundi business even in the future. NRB, through the monetary policy, has announced one percent more interest on remittance deposits on banks. Remittance in Nepal is helping reduce poverty, expand urbanization and also in operation of private schools and banks and financial institutions.
Last year, most of the remittance to Nepal came from countries including Qatar, Malaysia, the United Arab Emirates and Saudi Arabia. Experts claim that remittance would increase if Nepalis could go to South Korea, one of the countries from which Nepal receives most remittance.
According to a study conducted by the Central Bureau of Statistics a few years ago, remittance reaches 56 percent of households in the country directly.
Despite an increase in remittance in a single year, the number of people going for foreign employment has decreased. As of mid-June, the number of Nepalis seeking final labor approval (institutional and individual - new and legalized) for foreign employment decreased by 59.9 percent, according to NRB.
